Why Don’t Staff Come Forward With Concerns About Embezzlement?

We have noticed an interesting phenomenon in dentistry. When you look at all types of business in aggregate, “whistleblowers” are responsible for the detection of 43% of embezzlement. However, when you narrow the focus to just dentistry, the number drops dramatically, to under 10%.

One possibility is that other staff members are unaware that one of their colleagues is up to something. Our (admittedly non-scientific) experience suggests that this is often not the case, and that the more common reason that staff with concerns do not express those concerns is that they do not feel comfortable doing so.

Clearly there is a significant opportunity to catch embezzlement more quickly than you otherwise would if the barriers preventing concerned staff members from approaching the owner of their practice were removed.

What are these barriers? There are probably several risks that someone perceives about bringing concerns forward:

  • Compared with many of the businesses contributing to the global 43% number (this comes from studies done by the Association of Certified Fraud Examiners), dental practices are small workplaces. This creates the logical fear that the whistleblower will be easy for the thief to identify.
  • They often aren’t sure how receptive the practice owner will be to the possibility that something improper is happening. Particularly when the person suspected is the office manager, any prospective whistleblower must force the practice owner to choose between the whistleblower and a potentially long-term, valued employee.
  • What if I am wrong? Most people trying to decide whether to come forward in this situation are plagued with doubts and insecurity about the meaning of what they are seeing often produces hesitation.
  • Misplaced loyalty. Often staff members feel loyalty to each other, and that loyalty is often stronger than the allegiance that some staff have to the practice owner. We have also noticed that in many cases where embezzlement is taking place, the embezzler dribbles some largesse on other staff. This could include hours paid beyond what these employees actually work, or other benefits beyond what the practice owner is aware of. This kind of action tends to cement the staff member’s primary loyalty to his or her colleague.

What can be done to enhance the likelihood that a staff member with concerns will come forward? Many practice owners have given some thought to how they would respond if approached by a team member with concerns. Unfortunately, this thought process takes place inside the practice owner’s head and is not discernable to an employee who is agonizing about whether to bring their suspicions to the practice owner.

The way to influence someone wrestling with the decision of whether to become a whistleblower is to provide them assurance that their concerns will be handled properly. Since there is no way to identify someone who is facing this dilemma, this requires a standing policy on how someone bringing concerns forward will be handled. Normally this policy should be incorporated into a practice’s employee handbook and communicated with all employees.

What are the elements of a successful whistleblower policy? Here are some key commitments the policy should make:

  • To listen with an open mind.
  • To appreciate the risk someone took to come forward, and to not punish a whistleblower, even if their suspicions are not well-founded.
  • To vigorously protect their identity. In most cases, the fact that there even is a whistleblower should be kept secret, and if there is “discovery” it should be attributed to some other factor.
  • To investigate thoroughly and impartially. Committing to outside investigators is a great means of ensuring these things.
  • If the act of this person coming forward prevents financial loss to the practice, to pay a reward commensurate with the saving. (Offering such a reward is a great way to overcome misplaced loyalty.)

Creating a comfortable and secure environment where someone with information of tremendous value to you is motivated to deliver that information to you can have an immense payoff. We can help by providing our template whistleblower policy to any practice owner on request.

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