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Employee fraud 'must be approached carefully'
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Employers should adopt a risk-based approach to managing employee fraud and dishonesty, according to a leading HR body.
Mike Emmott, employee relations adviser at the Chartered Institute of Personnel and Development (CIPD), said policies should be appropriate to the organisation, industry sector and different job roles.
He claimed it is vital that counter-fraud teams engage with human resources departments as "a balanced approach" is required to manage the risks while maintaining the trust of the vast majority of honest employees.
"Organisations that seek to monitor their employees excessively are unlikely to create a work environment that encourages trust, loyalty and commitment," Mr Emmott claimed.
"So, it is important for employers to communicate clearly why policies are in place, so that employees know that there is a good reason behind the approach being taken and that it is not simply a 'Big Brother' encroachment on their privacy."
The CIPD expert was commenting after CIFAS reported a 14.5 per cent increase in cases of staff fraud during 2011 compared to the previous year.
The UK’s fraud prevention service warned that this can damage businesses reputation, brand and staff morale, as well as costing companies thousands of pounds.
"Employers must be on their guard when vetting prospective employees and ensuring that appropriate controls and a zero tolerance culture exists within their organisations to ensure that staff fraud cannot prosper," CIFAS argued.
Arjun Medhi, staff fraud adviser at the service, said the majority of staff within any organisation are trustworthy and honest.
"But businesses must understand the scale of the threat posed by the small proportion of staff who act dishonestly and defraud their employer and the numerous ways in which an organisation can be targeted," he stated.
“The way in which organisations approach the issue of staff fraud is changing to respond to the increased risk. Many organisations have historically been anxious to play down the threat from within and focus, instead, on the fraud risks presented by customers."
But the days when the majority of cases would be handled quietly with no publicity are "long gone", Mr Medhi added.
Customers and shareholders want to know that organisations are doing all that they can to safeguard against the threat, he stated.
Posted by Stephen Wilkinson
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