New figures on theft in the construction industry

41 % of Danish Construction Association members have experienced theft from construction sites in the last year. 59 % of companies east of the Great Belt have experienced theft from construction vehicles, while 32 % west of the belt have experienced the same. This is according to new figures from the Danish Construction Association, which document massive problems with theft in the construction industry. It is unknown how much it costs the construction industry, but CEO Christian Pejtersen from security company yourCompany estimates that the losses amount to several billion Danish kroner.

”The very large amounts could have been used to optimize companies and create better business,” says Christian Pejtersen, a specialist in combating fraud in the construction industry, among others. ”Yet, in general, far too little is being done to limit the problem - and what is being done is often insufficient. Effective fraud prevention is good business, but it requires a strategy and a wholehearted effort. In general, many companies are stuck in a culture of sporadic and haphazard action.”

As an example of the potential of an initiative, Christian Pejtersen highlights a DIY chain where yourCompany has helped reduce shrinkage due to theft by DKK 10 million annually. Another customer has reduced shrinkage by DKK 2.5 million annually. Both locations have also implemented other value-creating initiatives that are not directly measurable in terms of shrinkage figures.

Geographical differences

The Danish Construction Association's survey shows that the problem of theft from construction sites is roughly the same across the country, but burglary in construction vehicles is more prevalent east of the Great Belt. With 59 % in the east and 32 % in the west, there is a significant difference, but the study does not explain the geographical difference.

According to the study, it is primarily smaller companies with 1-10 employees that are affected by break-ins in cars and on construction sites. However, according to yourCompany's experience, this is not necessarily true. ”It's often the smaller companies that notice and react to the thefts because they feel the consequences right away. The large construction companies don't keep track of the pieces to the same extent. Therefore, they tend to overlook or ignore thefts due to high deductibles or directly choose not to spend time on fraud prevention,” says Christian Pejtersen.

Internal shrinkage

Internal theft is also a challenge for construction companies. Here, 9% of companies say they have experienced theft by their own employees within the last year. "Here, too, it's important to protect yourself, but at YourCompany you often only encounter the problem when things have gone wrong," explains Christian Pejtersen:

“We typically find that construction companies approach us for help organizing an internal investigation when they suspect financial fraud committed by their own employees. And it certainly makes sense to seek objective help to investigate the matter. Often this is done in collaboration with the company's lawyer, with yourCompany investigators carrying out the practical part of the investigation. Many people are surprised when they realize that it's not about three buckets of paint or a few power tools, but about cases where financial managers such as foremen, construction managers or project managers have embezzled millions of dollars. But of course, it would be even wiser to take the preventive measures that prevent waste and fraud, emphasizes Christian Pejtersen.

The surveys were conducted between March 23 and April 4, 2019. The Danish Construction Association surveyed 704 of its members, of which 142 responded to the survey. This is a response rate of approximately 20 %. The interested reader can see the survey here. Danish Construction Association_Theft from the construction industry

Thank you to the Danish Construction Association for the legwork around the survey.