As an employer, you always want to ensure that your employees are not defrauding your company while performing their different roles.
Whether it’s a case of back-door deals or simply padding up procurement figures, it is disheartening to experience employee fraud.
However, employee fraud is a very present risk in any business. According to a 2020 PwC survey, 47% of companies have experienced fraud in the past 24 months, and half the time, these fraud cases are usually carried out by employees.
What then can be done to lower the risk of fraud in your business? Here are some tips to help.
- Perform Background Checks
Performing a background check is not an option, it’s a necessity.
A background check can easily reveal character flaws or past indiscretions. It will also provide information on the potential employee’s criminal records, referees, work history, etc.
An interviewee with a forged degree or with a record of integrity issues in past work history is bound to have such issues if hired. This underscores the importance of carrying out background checks.
- Have an Airtight Employment Contract
Your employment contract should detail what is expected from your employees. It should also contain clauses that speak to consequences in the event of certain misconducts such as fraud.
This ensures that every new recruit is aware of the repercussions of such actions and would be less likely to venture into it. A good employee contract will do this justice
- Have an Ethics Policy.
A written ethics policy sets the tone for employees and helps communicate the acceptable culture in any organization, as well as those that are discouraged. Companies frequently have an ethics policy, which sets forth in detail what the ethical and moral code of the company is. An ethics policy should among other things spell out actions that constitute fraud and how such actions will be dealt with.
Beyond informing and orienting a new employee about their role in the business, it is equally important to emphasize the values and culture of your company to the employee.
- Protect your Business’ Intellectual Property
It is possible for an employee to commit fraud by stealing intellectual property from one company to another. One way to avoid this is to ensure that your employees understand the confidentiality obligations that they owe your company by signing a Confidentiality and Intellectual Property Assignment Agreement. Usually, if an employee creates any work whilst being employed by the employer unless specifically stated, that employee owns such work. Therefore, protecting your intellectual property is key.
These tips are sure to help you prevent the risk of employee fraud while creating a more structured environment for your organization to thrive