In our current landscape, there is ample opportunity for employees to turn to dishonest activities like fraud and become the insider threat.
War in Ukraine hiking up the cost of energy. The general hike in costs of living. Employees who are called back to the workplace feeling disgruntled and a general feeling of expectancy, in expecting the Government to bail them out of a financial difficulty without wishing to make their own personal sacrifices. Political turmoil with the public feeling cheated and lied to by Boris Johnson and politicians in general. Include other international factors not connected with the economy such as mass murders and climate disasters then the world is a different place to a decade ago.
In my opinion the ingredients are there for the change in behaviour for the rationale of an employee who may turn to dishonesty in the workplace.
The rationale behind an employee’s decision to be dishonest forms part of the 3 underlying points of the fraud triangle:
OPPORTUNITY | An employee will identify the opportunity around their normal working routine |
MOTIVATION | An employee is always dishonest for financial reward |
RATIONALISATION | The reason why an employee turns to dishonest activity |
Previous reasons for the rationalisation for a law abiding employee to turn to dishonesty include
Given the current state of the country, I believe that employee rationale will change. People are struggling financially and (at the time of writing) inflation is set to hit 18% in early 2023 according to Citi bank. There will be 3 or 4 pay packets before Christmas, fuel costs will increase as we will use more energy through the winter and there are a large proportion of employees who are resentful of being called back to the workplace.
That return to the workplace will incur costs for employees which will have increased from when they were last there. Petrol and general commuting costs are up as well as the ‘coffee and sandwiches’ they will consume. Employees are questioning ‘why’ they have to go back to the workplace at all.
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Speaking with employers in the manufacturing and service sector (by no means an accurate survey) in a ’dip poll’, I raised this potential for dishonesty. All agreed that that the potential was high and something which they had not considered although all stated they had ‘more pressing issues’ to deal with over the coming years. Issues included:
The 2018 Association of Certified Chartered Accountant ‘Report to the Nation’ showed that in 30% of cases there were insufficient controls in place to stop the employee committing fraud and in 19% controls that were in place were insufficient and overridden.
If these controls were inadequate and employers are aware of the risks as per my dip poll, then now the perfect storm has built for employee dishonesty and business leaders are not addressing them due to operationally more serious issues taking a precedent.
Jeremy Bentham, an 18th century philosopher defined fourteen pleasures that we all seek and which precipitate happiness. Number 2 was the pleasure of wealth. In the UK we live in a society where many have a degree of wealth which affords them car(s), holiday(s), the ability to socialise and have quality leisure activities whilst paying daily household and general living costs.
Most people will not have heard of the French sociologist Emile Durkheim’s theory of ‘anomie’, in his 1893 publication ‘The Division of Labour’.
The concept of anomie means the lack of normal ethical or social standards and how society and individuals behaviour with each other was dissolving. This he called ‘normlessness’. Durkheim believed that this ‘normlessness’ led to deviant behaviour.
Crime, and in this case specifically crime committed through employee dishonesty may manifest itself in an employee feeling unworthy, alienated, neglected and overlooked, given the huge societal change that the country is in at this time.
Durkheim states that this may force a person, who sees no other option to engage in criminal activity. I believe this could be criminal activity in the workplace.
Durkheim contends that ‘early societies’ such as a family, village and tradition had more constraint over deviance and the norm, whereas in modern societies individual constraints have weakened. Durkheim published his works in 1893 and he spoke of a ‘modern society’.
In the 21st century business environment employee dishonesty means more than just the expected theft and fraud. Dishonesty is criminal offences, civil offences, and employment breaches.
Prepare and an expect that employee dishonesty could happen in your business. There is a need for leaders to be realistic, responsible and mature and I advise a 3 tiered approach:
In 2022 with a damaged society, I ask, “How much more of society has fallen under the amonie principle and how many employees rationale will change and they turn to employee dishonesty”.