Undercover
Undercover investigators working as an employee in the
workplace are one of the most expensive types of investigations. And, one of
the most productive when used in conjunction with an experienced support team of
a case handler and, if necessary, surveillance personnel.
Undercover investigators are the ‘eyes and ears’ of
management and are able to provide management with a microscopic view of the
internal workings of their company. One that is usually hidden from management.
We worked a case recently where the Plant Manager assured
upper management, who were based out of the country, that the employees loved
him. In fact, the employees despised him and committed acts of minor disruption
in the production line almost daily, as acts of spite.
Three of the most common reasons we are called in to
conduct undercover investigations are: employee theft of goods and/or services,
employee time theft and employee drug abuse and sales. Undercover
investigations are also productive in discovering sexual harassment issues, a
hostile work environment, gambling/drinking on the job and safety issues. Here
are some statistics:
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The FBI calls
employee theft “the fastest growing crime in America!”
-
The U.S.
Chamber of Commerce estimates that 75% of employees steal from the workplace
and that most do so repeatedly.
-
One third of
all U.S. corporate bankruptcies are directly caused by employee theft.
-
The American
Society of Employers estimates that 20% of every dollar earned by a U.S.
company is lost to employee theft.
The U.S. Chamber of Commerce
estimates that theft by employees costs American companies $20 billion to $40
billion a year. To pay for it, every man and woman working in America today
contributes more than $400 per year.
The chamber also reports that an employee is 15 times more
likely than a non-employee to steal from an employer. Unfortunately, 75% of
employee‑related crimes go unnoticed.
No one is immune from employee theft. People from all walks
of life commit white‑collar crimes
The most important
way to deter employee theft is to be aware and prepared for the fact that it
happens. Dishonest employees avoid prosecution when managers refuse to accept
the idea that trusted employees are targeting them.
Misconceptions
Management
doesn’t need to tell employees about policies on employee theft because they
already know.
Well‑paid
employees are less likely to steal.
Honest and loyal
employees will report other employees who steal.
Losses from shoplifting are higher than losses from
employee theft.
Newer employees commit employee theft, while senior
employees can be trusted.
Employee theft is detected in its early stages.
In the Real
World
To some, the opportunity to steal is more important than
the need for money.
A majority of employee theft goes undetected by management.
Less than 10% of the employee population is responsible for
more than 95% of the total losses from employee theft.
Nearly every business experiences some degree of employee
theft.
Nearly one‑third of all bankruptcies is caused by employee
theft.
There have been thefts as high as $4.7 million dollars
(prosecuted by Kings County DA, Washington State)
Businesses are bankrupted by the thefts of a single
employee
Innocent employees have been fired or laid off because of
the thefts of a fellow employee
Employee
Time Theft
The Boston Globe and Denver Post newspapers recently
reported that U.S. companies lose nearly $400 Billion per year in lost
productivity due to “time theft” or loafing.
Besides fraudulent workers' compensation claims,
employees steal time by taking unauthorized leave or having others punch
time cards. The best way employers can deter employee theft of all kinds is
to do thorough pre-employment screening, the best way to uncover, document
and prosecute, is with undercover investigations.
Employee time theft costs as a result of buddy
punching, early or late arrivals, and long breaks or meals are estimated to
be $98 billion in the U.S. alone. A recovery of five minutes in a workday
from each employee for a company of 50 people, paying their employees $10
per hour, will result in an annual savings of $10,625.
Time theft costs American
businesses billions of dollars each year. This results from employees who
"steal" from their employers by willfully wasting the time for which they
are paid. A leading authority on employment issues has conducted numerous
surveys relative to time theft and concluded that the average employee
"steals" approximately 4.5 hours per week from his employer or nearly six
full work weeks per year.
You could be losing more than 10% of your payroll
through the following forms of time theft:
· Late arrivals or early departures
· Taking long lunch hours and breaks
· Requesting paid sick days for inappropriate reasons
· Slowing down the work pace to create overtime
· Excessive socializing and personal telephone calls
· Handling personal business while at work
· Using Company time and facilities to operate other
business
Time theft is not confined to any one type of person or
industry. It applies to both white collar and blue collar employees in every
type of business, institution, profession, and governmental agency.
Based on 250 working days a
year, the following chart shows what time theft could be costing a business each
year at the rate of 54 minutes per day or 4.5 hours per week.
Cost Based on Number of Employees Wasting 4.5 Hours per Week
| Hourly |
Cost Per |
2 |
5 |
10 |
25 |
50 |
100 |
| Rate |
Minute |
Emp |
Emp |
Emp |
Emp |
Emp |
Emp |
| $6.00 |
0.10 |
$600 |
$1,500 |
$3,000 |
$7,500 |
$15,000 |
$30,000 |
| $8.00 |
0.13 |
$800 |
$2,000 |
$4,000 |
$10,000 |
$20,000 |
$40,000 |
| $12.00 |
0.20 |
$1,200 |
$3,000 |
$6,000 |
$15,000 |
$30,000 |
$60,000 |
| $15.00 |
0.25 |
$1,500 |
$3,750 |
$7,500 |
$18,750 |
$37,500 |
$75,000 |
Drug Abuse
According to the
Department of Labor and Industrial Relations:
Alcohol abuse and the use of
illegal drugs are serious workplace problems. According to a study by the U.S.
Department of Labor, nearly three quarters of those who use illegal drugs also
work. Alcohol remains the leading drug of abuse as one (1) in every ten (10)
people in the United States has an alcohol problem. People do not check their
substance abuse problems when they enter the workplace. Workers who abuse drugs
affect everyone around them. Substance abuse can affect all segments of the
workforce, ranging from employees who perform routine tasks to managers under
stress.
Addiction is the irresistible
compulsion to use alcohol and other drugs despite adverse consequences. It is
characterized by repeated failures to control use, increased tolerance and
increased disruption in the family.
Detecting substance abuse in the
workplace requires an awareness of the most commonly used substances of abuse,
and their signs and symptoms of use. Abuse of any drug or substance is
dangerous.
The five most common substances
of abuse are Alcohol, Crystal Methamphetamine or Ice, Marijuana, Cocaine, and
Ecstasy.
Identifying
Potential Situations:
Early Phase
| Disease Progress |
Impact |
Visible Signs |
| Uses to relieve tension |
Drops to between 90%
and 75% efficiency |
Makes more mistakes |
| Tolerance increases |
Increased criticism from boss |
Misses deadlines |
| Memory black-outs |
|
Late or Absent |
| Lies about use |
|
Complaints from co-workers
Overreacts to criticism
Complains about being ill
Lies |
Middle Phase
| Disease Progress |
Impact |
Visible Signs |
| Sneaks use |
Loss of job advancement |
Spasmodic workplace |
| Guilty about abuse |
Family problems |
Difficulty concentrating |
| Tremors |
Financial problems |
More days off for vague
reasons |
Depression
Loss of interest in activities |
Wage garnishment |
Undependable Avoids associates
Exaggerates
Unreasonable resentments |
Late Middle
Phase
| Disease Progress |
Impact |
Visible Signs |
| Avoids discussion of problem |
Disciplinary action |
Job performance far below
expectations |
| Attempts to control fail |
Trouble with the law |
Frequent time off |
| Neglects food |
Drops to 30% efficiency |
Doesn't return after lunch |
| Isolates self from others |
Serious family problems |
Aggressive; belligerent
Domestic problems interfere
Loss of ethical values
Won't talk about problems |
Late Phase
| Disease Progress |
Impact |
Visible Signs |
Believes that other activities
interfere with use |
Final warning at work |
Formal discipline |
Blames people, places and things
for problems |
Termination |
No improvement in job
performance |
| |
Serious financial problems |
Prolonged unpredictable
absences |
| |
Problems |
Drug use on the job
Physical deterioration |
Employees who are using drugs
may also be selling them. To other employees, while on the job, not to while
mention driving for your business while they’re impaired. All of which have
legal and financial ramifications for the employer.
If you think you may have a
problem, or would like to find out if you do, call us. Maybe we can help.
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