Employer Beware!

16th April 2009

New research indicates that the credit crunch will cause a rise in workplace crime and employee dishonesty.

A research report commissioned by Vangent, a leading provider of results-oriented human capital and talent management solutions, provides insights into the deviant behaviour risks encountered by organisations as job candidates and employees deal with unprecedented economic hardships.

The report presents the Vangent Human Capital Ethics Quadrant model which identifies over 36 types of unethical and counterproductive behaviours that yield negative outcomes for organisations, including poor customer relations, unwarranted absenteeism, misuse of corporate funds and even theft of customers’ identities. It also quotes monetary theft has increased by almost a fifth during this current economic downturn.

Complementary theories cited in the report explore the origins and risks of workplace crime and counterproductive behaviours occurring in organisations The Employee Risk Triangle Theory stipulates that a combination of opportunity, need and attitude indicate the risk of employee theft and dishonesty. The poor economic conditions are causing many organisations to cut back on loss control and security services, leaving opportunities wide open for employees low in morale and motivation, and financial desperation to commit workplace crime.

Vangent worryingly predicts that up to one-third of employees are at risk of engaging in some degree of on-the-job theft and counter-productivity. This economic crisis is in many ways similar to the Great Depression of the 1930s, with people experiencing high levels of stress, fearing job losses, poor credit history and devalued homes. The Stress Facilitation Theory identifies that employees prone to high stress levels combined with dishonest attitudes have significantly higher rates of committing serious workplace theft than employees not under such stress.

“Unfortunately, many employers have the attitude that hiring people is easy in a recession. However, the likelihood and consequences of employing the wrong people have never been higher" said John W. Jones, Ph.D, Vice President and Chief Scientist with Vangent Human Capital Management.

Vangent is advocating the need for the UK to quickly bolster their methods of employee selection. The UK has long been fond of using personality tests as part of the recruitment process. These types of tests tend not to predict meaningful work-related outcomes as well as do attitude and behaviour assessments that identify candidates with high levels of job-related integrity who are likely to be reliable, productive, and trustworthy employees.

Interestingly, the Social Disorder Theory has shown that signs of disorderliness serve as a “trigger” mechanism that yields more disorderly conduct. That is, when people observe others violating specific social norms, they are also more likely to breach the same or even carry out another type of crime.

Through integrity testing Vangent identifies the risk of employee theft, also ensuring only honest and dependable candidates are recruited, reducing opportunities for workplace theft and ultimately assisting organisations to maximise return on their investments.

For a copy of the report Organisational Ethics and Counter Productivity Risks During an Economic Downturn visit www.vangent.co.uk/images/Vangent_Organizational_Ethics_Research_Paper.pdf

To find out more please visit www.vangent-hcm.com