Preventing Employee Fraud

Preventing Employee FraudThe ease with which expense reports can be manipulated, confidential company information can be accessed or merchandise can be stolen, means employee fraud is an increasingly serious issue. While you want to make sure you have the best MI Employment Practices Insurance to keep you covered in the event of employee fraud, there are some steps to take to help lower your company’s risks.

  • Background Checks- Prior to hiring, it is a great practice to conduct thorough background checks on all potential employees. You want to know if they have anything on their record that may be of concern. You should also contact references and make sure that they did not have any worrisome issues with former employers or supervisors.
  • Code of Conduct- Once a new employee is hired you want to make sure that they are aware of the company’s codes of ethics and conduct. This code of conduct should outline what is expected of employees as they handle confidential company information, and even what penalties will be enforced should they break these rules. It is a good idea to have all new and existing employees sign a document stating that they have been made aware of this code of conduct on an annual basis. This allows for any alterations and additions to be made as needed.
  • Proper Management Tone- One of the best things you can do for your company’s protection against employee fraud is to set a proper management tone. Things like: having an open door policy for employee concerns, offering assistance to employees that may be having a hard time, reconciling any issues that arise, and treating unusual behavior with suspicion can help to prevent employee theft.
  • Trust Your Instincts- Studies have shown that employees that feel under-appreciated, feel management is not being fair or are under pressure both within the company and outside of the company, are most likely to be the ones to feel they are owed something and commit thefts and fraud. Recognizing some of the signs of these employees can help secure your company. Things like, behavior changes, preferring to work after hours or from home, or being overly protective about their workspace are a few red flags to look for.
  • Audit- Do not hesitate to regularly audit high-risk areas of your company including expense reports, vacation reports, sales reconciliation, and web use. Conducting audits every 6-12 months can catch theft and fraud within the company.

At Capital Insurance Group, we know how workplace fraud can affect your business. Call us today for more information on how we can help you find the right Employee Practices Insurance plan. 888.296.0418