1 of 4

Write now Article Tools

According to the U.S. Chamber of Commerce, employee theft costs companies between $20 and $40 billion per year and is responsible for 30% of all business failures. How can you reduce your company's chances of falling victim to the fraud epidemic? There are a number of steps you can take:

1. Stop fraud before it starts. Incorporate a written honesty test as part of your standard applicant training. While such tests are far from foolproof, they can be helpful in screening out applicants who are predisposed to fraudulent behavior. Once hired, each employee should be provided with a written company fraud policy that clearly specifies all theft will be legally prosecuted. Finally, create a clear system of checks and balances within your organization that is visible to all your employees. Individuals will be less likely to attempt theft if they know vulnerable areas are closely monitored.

2. Be on the lookout for signs an employee might be engaged in fraud. Turning one's computer screen away from office aisles or rearranging cubicle space to conceal certain areas of the desk may indicate an employee is trying to hide his or her actions. In retail, be aware of staff members who routinely bring gym bags or large handbags to work, as these can be easily used to smuggle out merchandise. If concerned about data or information theft, take note of any employee taking an unnecessary amount of work home, whether on paper or via flash drive.

3. If you suspect you are being defrauded but cannot identify a culprit, you need to take immediate steps to reduce the number of areas in your organization where you are susceptible to fraud. Stores should be opened and closed by a minimum of two employees, and financial reconciliation should be split to ensure that whoever balances receipts is not also handling cash. Require employees to stow purses, duffels and jackets in a locker area separate from the main workplace, making it more difficult to stash stolen inventory. Install software, like PC Anywhere, that will allow you to remotely audit work being performed on particular computers. These steps will not only help flush out current thieves, but they will also send a message to your entire staff that fraud will not be tolerated.

4. Finally, one of the best ways to prevent fraud is to create a close, supportive work environment where you or your managers get to know all members of staff well. Take particular care to establish frequent, unscheduled contact with staff members who work independently or may be isolated from other employees for extended periods of time. This will not only help you spot early warning signs that a particular employee may be engaged in fraudulent behavior, but also create a sense of workplace camaraderie that will discourage dishonesty in the first place.

No company can afford the heavy price of employee fraud. While implementing anti-fraud policies and procedures may cost your organization more in the short term, the benefits of increased profits and greater company security will more than pay off in the long run.

Learn more about this author, Jayden Harlow.
Click here to send this author comments or questions.

Add your voice

Know something about How to protect your business from fraud?
We want to hear your view. Write now!