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The good news is that most of the thefts are property thefts that average $1,000 or less per year. The bad news is that 5%-10% of China employees go for the big bucks – IP, trade secrets, and client database thefts. The really bad news is that primarily due to the language and culture barrier, less than 5% of employee thefts are ever detected – and usually, after the damage has already been done. Surprisingly, not all of the thieves are Chinese. In fact, almost a third are foreigners. Depending upon what is stolen and into whose hands it may fall, will determine if your loss is a minor tax deduction, or catastrophic. It only takes one theft to cause a company to fail and fold if that theft is proprietary.
Depending in what industry you ply your trade, employee theft losses can be calculated at 8% to 12% of your gross revenues. By any standard, this is way too much and more than double international loss rates. With little or no prosecution in China, there is almost no deterrence and as such competitors actively recruit data spies to infiltrate your company on their behalf. Thus “your” new employee is really collecting two paychecks, and they may be one of your hardest-working and most reliable workers. Hell, they will even offer to stay late and work incredible overtime hours, long after management goes home. The “Business Mole” is a dreadful reality in China where the ability to copy, cheat, and corrupt are all admired in Chinese society as part of being “clever”. This article will shed some insight into this growing and very expensive problem…China's Famous Business Moles
Finding the thieves is what we do best. We use non-traditional surveillance and electronic measures as well as covert undercover operations to test the integrity level of your employees. Sadly, 80% of employees will betray their employer for the right amount of money. In a nation where the median income is roughly $6,000 per annum, this is understandable. Chinese are burdened with many financial obligations of taking care of their elderly parents, expensive housing, and saving enough money to send junior abroad for university studies. It is not uncommon for both parents to be employed and even hold down a second job, or set up some internet-based business. In a way, they are almost compelled to steal by the necessities of daily life and the inflation monster. But we'd rather stop them than rationalize for them. This will explain... China's Employee Thieves
In the West, most fraud is detected, and reported by other employees as per the above chart. Not so in China. Due to the concept of "face", Chinese are taught from childhood, not to cause problems or embarrassment for others. Thus when they witness thefts or other crimes, they will merely look away and go about their own business. If asked, they saw nothing. Even if they themselves are wrongly accused, they will not let themselves be a witness. This is one reason why it is so difficult to prosecute criminals in China if witnesses are required. Hence this is why you will see surveillance cameras everywhere in China.
To catch a thief in China you must understand how they steal, and to do this you must first understand how Chinese think. Our investigators have lived, worked, and married into the Chinese culture for 5-20 years. They know that in China thieves are either very sophisticated or bold enough to use fake names and IDs. They almost always must be caught in the act. Working with your permission, our white hat hackers and investigators have a proprietary way of spotting the weak link in your staffing chain. It is not unusual for us to find more than one bad apple in your office, factory, or warehouse. Even 10 year employees and relatives have been caught skimming and stealing. Since 2010 CSS and our sister company China Scam Patrol have caught over 279 thieves for 310 clients. We are not always 100% successful, but at present, our success rate is 83%.
What do employees steal most? The above chart gives you the answers. Often they steal that which is easiest to swipe, hide, and sell, and has the lowest chance of detection - data. Inventory and office property is also a favorite, especially if it can be removed from a truck or warehouse unseen. Usually those tasked with taking inventory are either the thieves or in collusion with those who are. Executives are usually too busy running a business to go and take an actual inventory count themselves. Even using hi-tech inventory control software and bar coding, inventory manages to disappear in China. A favorite trick is substituting low quality replica items for high value genuine products - especially jewelry and electronics.
Of course we also check for external breaches from hackers as well. In the last five years alone, Chinese hackers have stolen over $7 Billion of IP theft and have duplicated over 120 technologies including complete fighter aircraft, computer codes, data transmission platforms, aerospace engineering data, and even accessed Google's servers, once thought to be the most secure in the world. If you have any valuable information stored on your network, you are probably a target already. Not only can we keep the hackers out, we can install software to tell who is behind the attempted thefts.
Our fees are reasonable and are based on results. If we do not find a breach in your employee's integrity, we forfeit 50% of our fees. We will not only find the source of the bleeding, but also help you design and implement cost-effective counter measures to make it extremely difficult for employees to pilfer anything from your office premises or networks. Usually within one day, we can identify and isolate all of your vulnerabilities with an OIC - Operational Integrity Check. Remember when it comes to loss prevention, the best defense is an aggressive but discreet offense. Our investigators may not be handsome and debonair, but they are damn good at what they do - catching thieves.
If you can afford to lose 8%-12% of your gross revenues, then read no further. You don't need us. If however, you want the assurance of knowing your employees are loyal, trustworthy, and honest, send us an email with you contact info, and we will schedule a 30 minute free telephone consultation with you. We operate discreetly and in strict confidence. Nobody in your office will suspect any investigation - unless you tell them. The decision is yours. Just remember the Interpol statistics... 43% of all foreign business operating in China are targeted for data and technology theft. 78% of all employees admit stealing from their employers.
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