What causes an otherwise trustworthy person to steal? Why might an employee with no history of dishonesty suddenly commit theft? And what can an employer do to reduce the risk?
These questions often arise when an employee considered to be trustworthy is caught stealing. The natural reaction is, How could they do this? We trusted them.
Employee theft is rarely explained by a single factor. Our experience and research indicate that dishonest behavior is influenced by three factors commonly associated with the Fraud Triangle:
- Personal Integrity
- Situational Pressure
- Convenient Opportunity
For employers, these factors represent three areas of risk management. Organizations can evaluate integrity during hiring, have limited control over personal pressures, and have significant control over opportunities through effective policies, procedures, supervision, and internal controls.
Personal Integrity
Personal integrity concerns an individual’s attitudes toward honesty, their values, their past behavior, and the extent to which ethical conduct is genuinely internalized.
Employers should consider whether an applicant’s past behavior demonstrates honesty and whether their decisions reflect consistent ethical standards. Interviews alone may provide limited insight because applicants naturally present themselves favorably. Depending on the position and applicable laws, employers may use employment verification, reference checks, background screening, and validated integrity assessments.
No screening process can guarantee that someone will never steal. Strong integrity reduces the risk, but it does not make a person immune to dishonest behavior. Even good people can encounter circumstances that test their judgment.
Situational Pressure
Situational pressure refers to financial, emotional, social, or other circumstances that can affect decision-making. Employers generally have limited control over these pressures because many originate outside the workplace. For example, an employee may experience:
- A spouse or partner losing a job
- Unexpected medical or family expenses
- Significant debt or financial hardship
- A vehicle breakdown or other emergency expense
- Peer pressure from friends or coworkers
Circumstances can also change. An employee who presented no apparent risk during hiring may experience serious personal problems years later.
You cannot always control an employee’s circumstances, but you can control the environment in which they make their decisions.
Convenient Opportunity
Opportunity is the factor over which employers often have the greatest control.
The key questions are: How easy is it to steal, and how likely is the theft to be detected? An employee who never intended to steal may be influenced by an opportunity that is valuable, accessible, and unlikely to be discovered.
Organizations can reduce opportunity through controls such as:
- Separation of duties
- Authorization requirements
- Cash-handling procedures
- Regular audits
- Access controls
- Adequate supervision
- Consistent policy enforcement
Risk increases when one employee controls several parts of the same transaction. For example, authorizing, executing, recording, and reconciling an activity without a second person review. These multiple-task opportunities can make theft easier while reducing the likelihood of detection. Organizations can redesign processes and strengthen controls to reduce these vulnerabilities.
The Three Factors Work Together
Employee theft should not be viewed simply as a matter of “good people” versus “bad people.” A more useful approach to consider is: Personal Integrity + Situational Pressure + Convenient Opportunity
An employee with strong integrity may experience financial pressure but choose not to steal. Another employee may encounter an opportunity but decide the risk of detection is too high. However, when significant pressure combines with weak integrity and an easy opportunity, the risk of theft can increase substantially. This is why no single loss-prevention strategy is sufficient. Hiring and screening matter, but so do workplace culture, internal controls, supervision, and detection.
What Employers Can Do
While organizations cannot eliminate employee theft, they can reduce the risk by:
1. Hiring thoughtfully: Use lawful, job-related screening to evaluate qualifications, employment history, references, past history and other relevant information.
2. Building a culture of integrity: Make honesty an organizational expectation and ensure leaders model the behavior they expect.
3. Reducing unnecessary opportunities: Regularly review processes and identify situations where theft could occur without adequate oversight or detection.
4. Strengthening checks and balances: Separate responsibilities where practical so one person does not control an entire transaction.
5. Monitoring risk continuously: Recognize that an employee’s circumstances, responsibilities, and opportunities can change over time.
6. Emphasizing prevention and detection: Controls should make theft more difficult while increasing the likelihood that irregularities will be promptly identified.
So, whether a person will steal in any given situation depends on more than just their personal integrity, it also involves their situational pressures at the time, and how convenient or difficult the employer makes the theft opportunity. $
