The high cost of workplace fraud
In a fiercely competitive job market, forgery in the workforce is on the rise due to the pressures people are facing and having to overcome, at seemingly any cost. False claims are made and spun on a daily basis to get an advantage, whether in recruitment or to satisfy shareholders, at times increasing in desperation. Getting the result is all that matters, the means are always justified by the end – means that are both big and small. The majority of lies told in the workplace are harmless white lies, but then there are those which over-step the mark.
A report published by First Advantage reveals over a quarter (27.2%) of all verification checks on CVs between Jan 2011 and June 2014 uncovered inaccuracies. A third of the inaccuracies can be considered ‘major’ discrepancies that would cause significant concern for an employer.
Many of the discrepancies found were considered minor, often relating to dates of employment, education and professional achievements. The highest level of minor inaccuracies were found in candidates education history – what and where candidate studies. It is also reported that around 81% of applicants lie during interviews.
On a much larger scale of workplace forgery is the recent news coming out of Tesco concerning the suspension of four executives after the revelation it had overstated profits by £250million. The general assumption is that the profits were inflated to keep shareholders happy and keep the share price buoyant. Yet as a result of falsifying the figures, not only have Tesco’s lost the phantom £250million, but its shares fell dramatically, wiping a massive £2.1 billion from company’s value. It’s a double whammy, with both reputation and finances taking a real battering.
Lies are costly. They can result in loss of finances: the Association of Certified Fraud Examiners reported that a typical business lost about 5% of its revenue to fraud each year – much more in the case of Tesco. Lies can also poison the workplace and create a toxic environment, particularly if they go unchecked.
Businesses can decide to discipline lying employees for negligence and reasons relating to the capabilities and qualifications of the employee. It is often better to nip lies in the bud before further conflict arises that may require further disciplinary action. Yet for those favouring prevention rather than reaction, it is advisable for employers to create a culture of honesty and integrity in the workplace, even if this mean dismantling existing cultural expectations and norms.
If any of the issues raised in this article affect your business, please give us a call to discuss your options. We are happy to advise and find a solution that works for you and your business: 0800 912 7152