Shrinkage is a funny word. In the retail world, it has nothing to do with laundry. Rather, it’s another way of referring to internal employee theft, a huge concern for any retailer — and with good reason. Workplace theft costs retailers about $15 billion per year according to the National Retail Federation. They estimate that 44 percent of missing merchandise is due to employee theft. It’s not surprising that employers are taking the lead to protect themselves at a time when margins are thin and the economic recovery is still sluggish.
The New York Times recently reportedon a little known source used by some retailers—an extensive database that keeps track of employees who have confessed to or have been accused of stealing from their employers. The database called out by the New York Times is unique. It is not used in a traditional background check. It is a proprietary tool called Esteem that is owned by a private company and was built by contributions from the retailers themselves. It does not contain information from the public record; it is made up of self-reported incidents that are usually collected by a store’s loss prevention team. It does not replace a traditional employee background check, and most background screening companies do not have access to the database. Even if they could access it, I would guess that many companies would be reluctant to use it.
While I have not viewed an Esteem report, to the casual observer it sounds like something hatched from a Hollywood crime drama, where investigators type in a name, and up pops a photo with pages of information. While that image is not realistic, it has more than a few consumers, attorneys, and advocacy groups concerned. [...]