Covid-19 is the Perfect Storm for Employee Theft

 

By Ben Sapet

Risk management operates on the principle that 10% of employees will always steal, another 10% will never steal, and the rest will steal under the right circumstances. Unfortunately for many companies, the Covid-19 pandemic has created the circumstances to push that hesitant 80% of employees to commit employee theft.

Putting on the Pressure

The pandemic and the corresponding economic downturn have put many U.S. households in precarious positions. Between hefty medical bills, inflated prices, and widespread layoffs, workers are facing financial tension. In a sense, the pandemic has created a need for money and enough uncertainty to overcome an employee’s reluctance about stealing.

Increased strain at home and in the workplace is another major factor pushing employees to theft. Employees dealing with reduced income, demands of reduced staffing, and risk of exposure to the virus, experience higher rates of anxiety and depression. Mental strain and changing work conditions can become rationalization for theft in even the most trusted employees. With a sense of financial need and justification, companies operating during the Covid-19 crisis must prepare for a workforce primed to steal.

Limiting Opportunities for Theft

Most employee theft occurs when an employee with a need and justification is given an opportunity to steal. With reduced staff, decentralized workflow, and pandemic-related concerns, opportunities for theft are abundant and companies are left vulnerable. With these vulnerabilities, companies should consider taking steps to mitigate the increased risk and deter theft.

Companies can reduce risk by dividing accounting duties to ensure nobody has full control of a transaction. Additionally companies should implement degrees of oversight, such as random account reconciliations and review of bank statements and documents received directly from the bank. In addition, random inventory counts can catch theft and deter thieves in advance. Beyond changes to workflow, companies can use education, changes to company culture, and confidential reporting options to make their employees allies against fraud.

In a time of change and transition, the increased risk factors and vulnerabilities make fraud one of many areas for companies to review and rethink during the Covid-19 crisis.

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