Nova Scotia

A company's most costly thieves already have keys to the building

On average, employees steal $2,500 in cash or goods from their employers before they're caught, says the Retail Council of Canada.

'It's hard as a business owner to continue on ... and not to think that everybody is somewhat of a criminal'

The theft of goods and cash by employees is costing Canadian businesses $1.4 billion a year, according to the Retail Council of Canada. (Shutterstock / Robert Kneschke)

Mark Hatfield has a hard time trusting people these days. In the last 15 years, the small business owner said he's had employees steal from him three times.

Twice, he said workers stole more than $5,000 from his contracting company, Homestar Inc., in Quispamsis, N.B. The third time, he said an employee stole tools the business uses for landscaping and construction. 

Each theft hurt. 

"In a small business, the amount of trust that is given to individuals is tremendous and when that trust is broken, it's hard as a business owner to continue on ... and not to think that everybody is somewhat of a criminal or everybody is out to get you," said Hatfield, who employs 62 people.

On average, employees steal about $2,500 in cash or goods from their employer before they're caught, according to the Retail Council of Canada. On average, customers steal about $175.

Mark Hatfield is the owner of Homestar Inc. in New Brunswick. He says he's had three employees steal from him in the last 15 years. (Homestar Inc.)

The council is a non-profit association funded by the retail industry. It represents more than 45,000 retail stores across Canada. 

$1.4-billion loss 

Most times, employees don't steal the $2,500 at one time. It's usually accumulated over a longer period through numerous small thefts, said Stephen O'Keefe, a retail advisor with the council and a consultant.

Every year, employee theft costs Canadian businesses about $1.4 billion dollars, he said.

Hatfield said his business has suffered because of the thefts and his finances were restricted. 

"It affects the bottom line, but it also affects the rest of the company as employees ... what we're budgeting for next year in terms of raises and so forth to all the programs that we do," said Hatfield.

"We sponsor a lot of things in our community and this all affects that."   

Each time employees have allegedly stolen from Hatfield, he has taken them to court. He's won two cases while the third is set to go to trial at the end of this month.

More than half a million undetected thefts

The retail council believes there are 566,000 employee thefts that go undetected each year across the country, but that's only an estimate. There's no way to know for sure.

Companies calculate what they believe staff have stolen by looking at lost merchandise and money that can't be accounted for by outside theft or other means. They also consider how often they've caught employees stealing from them in the past and send that information to the council. 

O'Keefe believes employees manage to get away with theft for a number of reasons. 

Slipping under the radar

Some thieves know how to outwit the security system, while others are just lucky. 

"They're doing it right under the nose of the security camera," said O'Keefe. "But the security camera, the person may not be watching it right now. They're not necessarily watching for that employee."   

Security measures like cameras can help cut down on theft, but Stephen O'Keefe with the Retail Council of Canada says having a workforce that cares about the company is the best way to prevent theft. (Soeren Stache/Pool/Reuters)

At his business in New Brunswick, Hatfield has installed alarm systems, security cameras and new checks and balances for his company's financial transactions.

O'Keefe said having those security features in place is helpful, but the main way to prevent employee theft is by having an engaged workforce that cares about the company. 

"People don't steal from people they like," said O'Keefe. 

Despite the numbers, he said only a small percentage of employees steal from their employers and most people are putting in an honest day's work.   

'They don't bother doing anything about it'

The retail council doesn't break down employee thefts by region, so it's unclear how much of it is happening in the Atlantic provinces.

Many businesses are tight-lipped about employee theft. CBC News reached out to several businesses throughout the Atlantic region to discuss this topic and only Hatfield agreed to be interviewed. 

Michelle Black, an associate lawyer with Stewart McKelvey in Halifax, said she sees at least a dozen cases involving employee theft come across her desk a year.

But Hatfield said not every business comes forward after a theft.

On average, employees steal $2,500 from their employers before they're caught while customers steal about $175. (Shutterstock)

"I hear a lot of times that stuff gets covered up by other companies. They don't bother doing anything about it," said Hatfield.

"I think that's wrong. I think the more you hear about it, the more it educates the public."