Fraud is growing with the recession
The recession’s effect of significantly increased economic pressures on most European companies is increasing the likelihood of some risks materialising. One of those quite widely reported is that of employee fraud.
As Gavin Robertson, principal of Robertson & Co, explained in a recent online debate organised by UK risk management association AIRMIC, you need to pay particular attention to the likely increase in claims, working with your human resources professionals to monitor sickness levels, rates of absenteeism, and what people are actually doing during company time and how they are using company vehicles.
But the risks do not stop there – and it is not a one way movement. Employees’ actions may be coming under scrutiny, but so too are those of their employers.
“Employeesâ€™ actions may be coming under scrutiny, but so too are those of their employers.
With as many as 3,000 people a day becoming unemployed, risk consultancy Protiviti warns that more disgruntled former workers are becoming whistleblowers against their former employers. The consultancy says that it has already seen a significant increase in clients asking for help to investigate and mitigate allegations of misconduct, malpractice and negligent omissions. Continued redundancies and the emergence of high profile whistleblowers have put even greater pressure on the risk management functions of organisations across a number of sectors. Protiviti believes that companies must put rigorous processes in place to prevent acts such as fraud, but must also develop a more open style of corporate management to enable employees to voice concerns without jeopardising their careers.
It claims that nearly one-third of employees have witnessed improper or illegal conduct in their workplace and subsequently turned a blind eye to it. Over half of all fraud cases are uncovered as a result of information received through third parties, including whistleblowers, or by accident.
In today’s tough world with widespread redundancies and cutbacks on pay and bonuses, employees are not going to be forgiving. If companies have not been squeaky clean in their practices, they risk the whistle being blown in a big way. And, says Protiviti’s John Cassey, whistleblowers need to be reassured that they will not face harassment, intimidation, retaliation, job losses or blacklisting from management and fellow workers. Confidentiality is an essential factor.