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Office Risk Insights: Prevent Employee Theft in Your Office

Your organisation should always be alert to possible employee theft, but now more so than ever during this rough economic period. Many employees are financially burdened and normally honest individuals may be tempted to commit theft from their employer.

This is even more of a risk if your company is also struggling, particularly if you have had redundancies and employees are fearful for their jobs. It is important that you take preventive measures and institute extra safeguards to prevent employee fraud.

Theft comes in many shapes and sizes—depending on your business and employees. Typically, employees may embezzle money or take advantage of their access to sensitive customer information.

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.

Tips to Avoid Employee Fraud

To prevent theft 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 upper management and owners.
  • Reconcile bank statements immediately.
  • Consider using a payroll service to ensure accuracy.
  • Consider installing surveillance equipment. Be mindful that this may decrease employee morale if they feel that they are not trusted. You may also want to monitor computer activity more closely.
  • 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 thorough screening on all your new hires.
  • Train managers and supervisors to monitor employees and watch for suspicious behaviour. Any suspicious behaviour should be reported and further investigated.
  • Purchase employee dishonesty insurance.

To learn more about employee dishonesty insurance, contact Sirelark Risk Services today.

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The content of this publication is of general interest and is not intended to apply to specific circumstances or jurisdiction. It does not purport to be a comprehensive analysis of all matters relevant to its subject matter. The content should not, therefore, be regarded as constituting legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice from their own legal counsel. Further, the law may have changed since first publication and the reader is cautioned accordingly. © 2010, 2012-2013 Zywave, Inc. All rights reserved.

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