During times of economic insecurity, normally honest employees may resort to theft due to the increasing financial pressure they are feeling at home.
Employees may also be motivated to steal if they were given extra responsibilities after others were terminated without an increase in compensation. While they may not normally be inclined to take advantage of their employer, thieving employees may rationalise their behaviour because they are panicked about their current financial woes. As a result, companies are wise to look out for increased criminal acts by their employees, especially if redundancies have been commonplace recently within the organisation.
Theft comes in many shapes and sizes, depending on your business and employees. Typically, employees may embezzle money or steal products, such as food or electronics. In addition, employees may use company time to take care of personal obligations (known as time theft). They may use company time to look for a new job if they are in fear of losing their current one or may use work time to take care of personal business. Furthermore, if employees are under large amounts of pressure due to their uncertain job fate, they may be more inclined to take breaks to surf the Web as a way to reduce some of their stress.
To prevent thefts at your organisation, consider the following safeguards:
- Communicate with your employees about the economy and how it will affect your organisation. Be open and honest, but discourage them from panicking.
- Try to maintain a positive work environment even during tough times. Encourage open communication, listen to employees’ ideas and recognise employee achievement.
- Educate your employees about what is considered fraud and the consequences associated with it, and emphasise that the company has a zero tolerance policy.
- Conduct more internal audits.
- Increase company oversight by senior management and owners.
- Reconcile bank statements immediately.
- Consider using a payroll service to ensure accuracy.
- Purchase Employee Dishonesty Insurance or Fidelity Guarantee Insurance.
- Consider installing surveillance equipment. Be mindful that this may decrease employee morale if they feel that they are not trusted.
- Upper management may consider taking a pay decrease or not receiving bonuses, so that lower-level employees see that everyone in the organisation is affected by the economy.
- Regarding financial tasks, give different employees different jobs, such as one person handling transaction authorisations, one person collecting or paying cash and one person maintaining records. Do not allow one employee to have too much control.
- Encourage employees to use their holiday time. If someone is stealing, it may become more evident once they are away for a few days.
- Establish a fraud hotline for employees to report suspicious or fraudulent behaviour. Give them the option to call anonymously.
- Conduct a DBS (new name for CRB) check on all successful applicants for DBS eligible positions.
- Train managers and supervisors to monitor employees and watch for suspicious behaviour. Any suspicious behaviour should be reported and further investigated.
To learn more about Employee Dishonesty Insurance, contact ProAktive today.
By Sam Leeder