Home » Fraud and Investigations » Is Your Employee Just Stressed—or Dishonest? Four Subtle Signs to Watch Out for in Your Small Business

Is Your Employee Just Stressed—or Dishonest? Four Subtle Signs to Watch Out for in Your Small Business

by | Aug 16, 2023

Confused hr manager having bad first impression at interview.

While building trust with your team is fundamental for a small business owner, it’s important to be vigilant. Think, “Trust but verify.” Employee dishonesty isn’t just about obvious behavior, like stealing office supplies or embezzling money, it can include any number of deceitful actions. And ignoring the warning signs could do irreparable damage to your business.

In this blog post, we’ll dissect some of the subtle, yet crucial signs of employee dishonesty that tend to get overlooked.

Examples of Employee Dishonesty

1. Punctuality Issues

Everyone gets stuck in traffic from time to time or faces unforeseen personal circumstances. But if you notice a pattern with an employee who is frequently late or leaves early without a valid reason, this could signal a lack of respect for the company and their role within it.

Let’s say you have a project manager who has always been punctual and reliable. If they suddenly start arriving late to work, missing deadlines, and leaving early, it’s an indication that something is amiss—and that you should be on alert. When an employee deviates from their usual work ethic, it could be the first indication of disengagement and potential dishonesty.

2. Disregard for Review or Audit Processes

Audits are an integral part of maintaining transparency and control within a business, irrespective of its size. When an employee resists audit processes or any other form of a systematic review, alarm bells should start ringing. Employees who do not want their work subjected to scrutiny could be concealing everything from substandard performance of their assigned tasks to the theft of company resources, both tangible and intangible.

For instance, let us consider your inventory manager. They’ve always been supportive of transparency, yet they’re now pushing back against a new review process you implemented to keep track of inventory levels. The sudden resistance could signal an attempt to hide misconduct or the misappropriation of resources.

3. Major Shifts in Work Behavior

Significant changes in an employee’s work performance or habits may require your attention. Perhaps previously stellar work quality is slipping. Or maybe they’re putting in a surprising amount of overtime. While fluctuations in work behaviors can occur for many reasons—stress, burnout, personal issues—employers should always consider the possibility that dishonesty is at the root of the change.

Consider this: Your top-performing sales representative’s overtime has surged recently, even as his performance has dramatically declined. Is it a personal issue? Or could the changes reveal that the salesperson was previously inflating sales figures to meet targets? Instead of dismissing this as a slump in performance, a more in-depth review of past sales records and client interactions could uncover potential dishonesty.

4. Exhibiting Secretive or Defensive Behavior

Is one of your employees constantly looking over their shoulder, getting startled easily, or unusually secretive about their work? Are they snapping back defensively when questioned about their work or decisions? You could chalk this up to work pressure or personal stress. But if you did, you might be missing one of the most common signs of dishonesty in the workplace.

For instance, your long-time bookkeeper, usually dependable and transparent, has recently started to become quite protective of accounting records. Monthly reporting is coming in later and later each month. And the bookkeeper seems anxious whenever someone enters her workspace and is unusually secretive about her work. When asked about discrepancies in financial reports, instead of her usual detailed explanation, she counters defensively. Although it might seem like work stress, the bookkeeper’s sudden secretive and defensive behavior could be masking financial misconduct and dishonesty about an essential function in your business.

Don’t Be Afraid to Investigate

Observing these signs does not mean you should jump to conclusions immediately. Multiple explanations can account for every type of workplace behavior. Sometimes a defensive reaction really is just a matter of a stressed-out worker. The point, however, is that business leaders should be aware that employees who defraud businesses exhibit common behaviors. And if you notice one of the four behaviors listed above, it’s better to investigate early and ensure that nothing is amiss. The future of your business could depend on it.

Remember you don’t have to face these challenges alone. Resources and professional advisors like us at Forensic Strategic Solutions are available to guide you through these complexities. Contact us for a consultation.

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