Workplace fraud: How employees’ silence is hurting your bottom-line

Most companies are in dire need of employees who aren’t afraid to speak up when it comes to financial improprieties at work.

Four in 10 workers have witnessed misconduct in the workplace. And nearly a quarter of those fail to speak up about it.

Those eye-opening stats come from several recent business ethics surveys highlighted in a new report by the Anti-Fraud Collaboration.

Here’s why you can’t afford to let anyone see something and say nothing – and how you can create an environment of Silence Breakers.

Because if it happens once …

The most compelling reason you need people to speak up: Odds are whatever the person did once – be it expense report padding or buddy punching – he or she is likely to do it again.

Nearly half (41%) of people said they saw the same behavior at least one additional time. And often it was a pattern repeated consistently.

So every time someone doesn’t speak up, it costs you more and more.

Why do people hesitate to call out funny business? Yes, fear of retaliation is the No. 1 reason. But there’s a whole host of other things you might not even realize could be suppressing employees’ willingness to come forward:

• Management doesn’t want to hear problems. You’ve heard it before; maybe you’ve even said it: “Don’t bring me problems, bring me solutions.” Some employees may take this to mean managers never want to hear negative news.
• Excessive team loyalty. Of course you want employees who are loyal to their department and the company as a whole. But that can be taken too far when folks choose to overlook bad behavior “for the good of the team.”
• A “results at all costs” culture. Again, you certainly want everyone to be focused on driving the numbers, but that too can be taken too far. For example: When someone doesn’t report overtime worked and a colleague doesn’t correct it or speak up because it will keep costs down.

4 strategies build right environment

So what can you do to foster an environment where everyone feels not only comfortable but compelled to raise a hand when something’s amiss?

1. Create – and push – a strong anti-retaliation policy. Everyone needs to understand that speaking up is not only expected but required. And as a result there’s no place for retaliation, whether a claim was founded or ultimately proven untrue.
2. Have an independent entity responsible for whistleblower mechanisms. Many people worry that something promised to be anonymous won’t stay that way. The individual or individuals in charge of this reporting tool must be free from other influences.
3. Watch your wording. The AFC recommends a subtle shift that can make a big difference: Change it from a “hotline” to a “helpline.” If you promote it as more of a tool and less of a mechanism to “tattle,” people will be more likely to use it. Offer it up as a resource to ask questions.
4. Get feedback on your process. Not sure if you have factors in your process that could be dissuading others from speaking up? Circle back with employees who have reported issues to ask about their experiences. Would they speak up again? Why or why not?

Info: To download the report “Encouraging the Reporting of Misconduct,” go to antifraudcollaboration.org