Amid the cost-of-living crisis, financial pressures may motivate otherwise loyal employees to commit fraud, making fraud prevention strategies a top priority for employers. 
 
Employee fraud—when an employee knowingly lies to, steals from or deceives their employer to make personal gains—is a pressing concern for businesses across multiple sectors. Almost 6,000 workers were caught stealing from their employer in 2022, according to database company Statista, and this statistic could rise further amid the cost-of-living crisis. Specifically, financial pressures may motivate otherwise loyal employees to commit fraud. Thus, it may be prudent for employers like you to seek ways to lessen this risk. Consider the following strategies to prevent employee fraud: 
 
 
Create a tip hotline. Whistleblower tips are the most common way employee fraud is discovered. As such, your organisation could set up a hotline to catch fraud earlier and minimise losses. To boost the tips received, educate employees on the warning signs of fraud and how to report it. 
 
Conduct internal audits. Regular audits can help businesses identify discrepancies. They also show employees that fraud prevention is a priority, which may act as a deterrent. Alongside scheduled audits, consider unannounced assessments to catch fraudsters off guard. 
 
Perform background checks. Employers should contact references, perform background checks and conduct online research to vet candidates before hiring. To weed out dishonest candidates, it’s especially important to check that the qualifications stated on curricula vitae are accurate. 
 
Implement internal controls. While employees need a certain level of trust and authority to do their jobs, internal controls can help detect and deter fraudulent activities. Such controls include controlling access to systems, limiting access to petty cash and performing monthly bank reconciliations. 
 
Create a culture of integrity. Employers should implement consistent controls and policies to create a culture that empowers staff to be accountable for their actions and minimise risk while driving compliance. 
 
Purchase insurance. Insurance, particularly commercial crime insurance, can help protect your organisation from business-related financial losses. 
 
Contact us today for further business insights and risk management guidance. 
 
Share this post:

Leave a comment: