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"StrategicRISK" | May 2009

Employees Retaliate

The recession's effect of significantly increased economic pressures on most European companies is increasing the likelihood of some risks materialising. One of those quite widely reported is that of employee fraud.

You need to pay particular attention to the likely increase in claims, working with your human resources professionals to monitor sickness levels, rates of absenteeism, and what people are actually doing during company time and how they are using company vehicles.But the risks do not stop there - and it is not a one way movement. Employees' actions may be coming under scrutiny, but so too are those of their employers. With as many as 3000 people a day becoming unemployed, more disgruntled former workers are becoming whistleblowers against their former employers. Continued redundancies and the emergence of high profile whistleblowers have put even greater pressure on the risk management functions of organisations across a number of sectors. Companies must put rigorous processes in place to prevent acts such as fraud, but must also develop a more open style of corporate management to enable employees to voice concerns without jeopardising their careers.

Nearly one third of employees have witnessed improper or illegal conduct in their workplace and subsequently turned a blind eye to it. Over half of all fraud cases are uncovered as a result of information received through third parties, including whistleblowers, or by accident.