Employee fraud is on the rise. According to Statista, nearly 6,000 workers were caught stealing from their employers in 2022. With the cost-of-living crisis putting more financial strain on employees, this number could climb even higher. As an employer, you need to take steps to prevent fraud and protect your bottom line.
So how can you stop employees from defrauding your business? Here are some practical tips:
Create an Anonymous Tip Line
Whistleblower reports are the most common way fraud gets discovered. Give employees a safe, anonymous way to report suspicious activity through a tip line. Make sure staff knows what fraud looks like and how to use the tip line properly. This will help you catch issues early before they balloon into major losses.
Conduct Scheduled and Surprise Audits
Regular internal audits are vital for spotting discrepancies in accounts and inventory. Unannounced audits, in particular, can catch fraudsters off guard before they have time to cover their tracks. Let employees know audits are a priority for your company as a deterrent to misconduct.
Vet New Hires Thoroughly
Do your due diligence on all new candidates with background checks, reference calls and CV fact checking. Fraudsters often falsify qualifications, so verifying education and skills is crucial. The hiring process is your first line of defense against deceitful employees.
Implement Internal Controls
Internal controls like system permissions, cash handling policies and bank reconciliations make fraud harder to accomplish and easier to spot. Give employees enough autonomy to work effectively while limiting the opportunity for theft. Consistent oversight and accountability are key.
Build a Culture of Integrity
Policies only go so far if the underlying work culture breeds misconduct. Foster an environment where staff take pride in honesty and playing by the rules. Lead by example and make it clear fraud will not be tolerated. Your culture is your strongest anti-fraud tool.
Insure Your Business
Even with preventive measures, fraud can still occur. Make sure you have comprehensive commercial crime insurance to cover any losses. An insurance partner can also provide risk management guidance as fraud trends evolve.
Stay a step ahead of fraud with proactive prevention and detection. With vigilance and care, your business can curb employee fraud.