Employee fraud higher in tough timesDate posted: 29.02.2016 | Author: Harry Bovensmann
Companies could expect more theft, fraud and corruption as cash strapped or even heavily indebted employees resorted easier to dishonesty. An unethical workforce could also undermine productivity and erode competitive advantage whilst compromising earnings. Therefore, companies should not cut back on fraud and corruption reporting mechanisms during tough economic times.
Whistleblowing has come of age and is being utilised more and more by employees who do not condone unethical behaviour being regarded as an efficient and effective means of detecting fraud and corruption in the workplace. The 2014 ACFE Report to the Nations on Occupational Fraud and Abuse, for instance, found that employees accounted for nearly 50% of all tips. It also showed that organisations with hotlines were not only much more likely to detect fraud through a tip off, but experienced fraud that was 41% less costly and detected it 50% more quickly, resulting in significant savings.
Interaction with whistleblowers is key, as the whistleblower needs to feel confident in order to make full disclosure of sensitive information. Employees don’t only make use of a toll free facility, but sometimes feel more comfortable using alternative reporting mechanisms, such as online reporting, fax, email, post or an SMS “callback” facility. Priorities should be protecting a whistleblower’s identity and ensuring that a client received accurate information.