THE FALLOUT FROM WHEN AN EMPLOYEE STEALS

 

fallout

 

Many of us have been through the discovery of an employee who steals.  Sometimes, it is really difficult because it is someone we know and work with.  If you read the latest version of  The Global Report on Fraud you will discover that few businesses have escaped this problem.  Why is employee theft so rampant?  Many studies have estimated that one in four employees steal on some level from their employers.

I’ve devoted other columns to prevention techniques, strengthening of Internal Controls and especially segregation of duties.  However, today I want to discuss the ‘aftermath’.  When confronted with the facts, what are you going to do with a key employee, for instance, your only staff payroll person?  What about the Accounts Payable person falsifying invoices and presenting them to the company for payment (to her).  And, she’s your only A/P person and has become much more knowledgeable about the system and its inner workings than you are.

So here is a little quiz for you…………………pick the right answer for your company:

  1. Move them out of their department and away from tasks that involve cash.
  2. Leave them in the department but demote them and hire someone to take their place.  They can train the new hire.
  3. Put them on probation for sixty days and monitor them very closely.
  4. Fire them immediately

Which answer did you pick?  1…..2…..3…..4….?

If you picked any number other than ‘4’……………..my question to you as a Management Consultant is:  ‘ARE YOU CRAZY?’

First, if you think that the other employees in your company are not watching every move you make, you are most likely mistaken.  News that an employee has been caught stealing can travel like wildfire even if you have tried to keep everything about it secret.

Second, anything other than firing the employee will be a signal to a lot of people that they can rationalize some very bad behavior.

Third, allowing the employee to remain in any capacity is like poisoning the well from which you drink the water.  I strongly advise against it.

Several years ago, a long time dedicated employee and single mother of three was caught taking a check, endorsing it and depositing it to her account which was discovered during a reconciliation process.  Her boss felt terribly sorry for her because he knew she was in rough financial shape.  You can agree not to prosecute.  You can agree to not challenge unemployment and you can even pay some severance (I advise against that) to help the employee while she finds another job.

However, before you write a glowing letter of recommendation or tell a caller checking her references that you regret she resigned and she was a great employee, please CONSULT YOUR ATTORNEY.

Finally, remember one thing, your leadership and management skills are on the line here.  Show decisiveness in dealing with incidences of fraud.  You will be respected for it.

 

 

 

 

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