As the world tries to recoup from the ongoing Coronavirus pandemic and try to get back to some form of normality, there’s one endemic that isn’t letting up: employee fraud. It’s real and it can cost businesses a fortune.
Employee fraud famously rises in times of financial uncertainty so it should come at no surprise that over the past few months, cases of employee fraud and malpractice are high. clyeco.com check that address is it clydeco.com reported an increasing number of cases involving fraudulent insurance claims, abuse of COVID-19 relief schemes, and corporate fraud driven by employees. They also report that incidents include theft of intellectual property and corporate information assets, abuse of procurement or expense procedures.
When we think fraud, we typically think of infamous large-scale cases such as Bernie Madoff. When in reality, all businesses are at risk from employee fraud. No matter how big the crime or who commits it, there are three elements that are always present in every fraud, known as the ‘fraud triangle’:
Opportunity. The employee or employees identify the opportunity around their normal work routine.
Rationalization. The employee will rationalize their actions to justify their actions.
Motivation. The financial reward is always the motivation.
Due to the nature of the covid-19 pandemic, measures taken to combat obstacles are established the more time goes on. It’s new territory and everyone is doing the best they can. There is no doubt that the pandemic has brought economic hardship to many. These unique hardships have been adding pressure to some and that’s why employee fraud is on the rise. foxwilliams.com states “plainly, employees may feel the need to ‘borrow’ from their employer if presented with the opportunity to do so’. Fortunately, there are things that can be done to try combat this and get on top of things.
Like anything relating to business, change starts from the top. It’s no different for fraud prevention. Your organisation’s leadership must understand the risk to the business and be mature, realistic and responsible to that risk the business face and set the standards of conduct for everyone working for them. Raising awareness and educating colleagues is a practical first step. Once everyone is clued up on what employee fraud is and what the warning signs are, the next logical step is to assess your own vulnerability. Lastly, put a plan in place for dealing with such situations and make sure your HR team are confident and competent in dealing with this.
Contact Dave Kearns
Dave Kearns is one of the UK’s leading experts on employee dishonesty. You can follow him on Facebook or Instagram. For more information on how to combat employee dishonesty and conducting commercial investigations, reach out to Dave Kearns today.
It’s time to act.