Signs of Employee Fraud and How to Manage It
90% of theft losses sustained by a company are at the hands of their employees. While employee fraud is a topic that should be discussed openly and honestly, many leaders are scared to talk about it.
They worry that if they address the issue head-on, their employees might start questioning the company’s trustworthiness and make unfavorable comparisons between their own work experience and that of other employees.
But it’s important to talk about employee fraud to manage any potential risks and prevent it from happening in the future. In this blog post, we’ll explore the various types of employee fraud and share some of our best tips for preventing it from recurring in your organization.
Table of Contents
What is Employee Fraud?
Employee fraud is the act of a worker stealing money from the organization they’re employed with. In many cases, employees commit fraud with the intention of receiving a reward that isn’t rightfully theirs, such as a tip, bonus, or benefit.
Other times, they do it with the intention of harming the company. Regardless of the motivation, employee fraud is a serious offense that can result in significant financial penalties, including fines and the termination of your employment agreement.
Signs of Hidden Employee Fraud
Many of the employee fraud cases that happen in organizations are small and unnoticeable. This may be due to the fact that employees aren’t motivated enough to commit a crime or that they don’t want to risk getting caught.
If you suspect that your employees are committing a hidden form of fraud, there are a few red flags you should look out for. These signs of employee theft include:
- A sudden drop in productivity
- Unusual absences or persistent absences from work
- An increase in the number of complaints about a specific employee
- A drop in the employee’s overall performance
Preventing Recurring Types of Employee Fraud
Because employee theft often occurs in small, below-the-radar ways, it can be tricky to catch. But there are a few steps you can take to help prevent it from recurring in the future.
When hiring new employees, carefully review their resumes. This is to ensure that they don’t have any offenses related to fraud on their record. If you don’t have access to the applicant’s criminal history, you should still do some background research.
This is to see if there are any red flags on their resume or in their interview answers.
This can help you decide whether or not to extend employment offers to potential employees. Additionally, when hiring new employees, be sure to check their work history for signs of fraud.
Bento can be a strong asset to your company regarding employee fraud detection.
Should You Talk About Employee Fraud?
If you’re worried that employee fraud is happening in your organization and you’re too scared to talk about it, don’t be. Just remember that, as with most things, employee fraud can be managed by educating your team about the risks and taking precautions.
Stay educated on the subject by checking out some of the other posts we’ve created for our readers like you.