Go to:

February 2019
< Jan Mar >
Leaguer Email Subscription

You are not currently subscribed. Click Subscribe below to receive the Leaguer email.

What's Motivating Your Employees?
Tuesday, June 21, 2016 6:35 AM

By Pamela Blevins, Remote Financial Services Manager, Credit Union Resources

Not knowing what's motivating your employees could land you in financial hot water. Did you know that the majority of employees who have committed internal fraud did so because they were in a financial bind and saw no other way out? According to the fraud triangle theory, those who commit fraud usually had all three of the following scenarios occur before they decided to cross that line.

  • The motivation to conduct fraud (usually due to a financial difficulty)
  • The opportunity to conduct fraud (weak internal controls in place to prevent the fraud)
  • The rationalization that they are owed the money (usually due to feelings of dissatisfaction or that they have been wronged in some way by their organization or management)

Reducing or eliminating even just one of these three risk categories will greatly reduce your risk for potential internal fraud. I recently wrote blogs on decreasing your risk exposure to covert opportunity and rationalization by increasing internal controls and boosting morale in your credit union. However, having the ability to identify red-flag employees who might be motivated to commit fraud is just as important.

Identifying Risky Motivation

After most cases of fraud when the credit union looked back on the situation, many could identify warning signs that an employee was going to commit the fraud. These warning signs usually come in the form of the employee displaying financial difficulties. There are many ways to identify the potential risk before the fraud occurs:

  • Review all employee statements. Look for employees who are constantly over-drafting their accounts or living on the edge. Pay close attention to waived fees. Many credit unions do this on a quarterly basis. This can be handled by an internal auditor or even an outside third party such as Credit Union Resources.
  • Review employee loan trends. Look for employees who have recently requested many personal loans, credit cards, or advances. This could be an indication they are not financially stable and need access to external cash.
  • Pay attention to credit scores, credit reports, and debt ratios. When reviewing new loans for employees, look for dramatic drops in credit scores or increases in debt ratios. Also look for new items in collections that were reported to the credit bureau. This could be an indication of problems with other creditors.
  • Keep an ear out. The credit union environment is much like a family. In many cases, employees discuss their financial difficulties in the open. Here are some key scenarios that could be cause for concern:
    • Employee’s spouse/significant other has lost his/her job
    • Employee has significant debt or credit problems and is struggling financially
    • Employee/spouse/child is involved in civil or criminal proceedings
    • Employee/spouse/child has a drug/alcohol/gambling problem
    • Employee made a lavish purchase (like a new home) that exceeds his/her means

Okay, so they have been identified. What now?

If any of these circumstances lead you to identify an employee as a red flag or high risk, knowing how to handle the situation with finesse is key.

First, once the employee has been identified, begin with opening the door for open dialog as a concerned party.

  • Maybe inform them that you have noticed that they seem to be having a difficult time financially and ask if they are okay or if there is anything you or the credit union can do.
  • Make sure when you start this dialog, you do not come across as accusatory; do not inform them they are a high risk or make them feel bad about their situation. We all experience ups and downs in life, but that does not necessarily mean we would commit fraud. By opening this dialog, your employee will know that you are aware of their financial difficulty. The employee will also know that they are on your radar and someone is taking notice.
  • Be transparent with your staff, and let them know that reviews of employee statements are performed on a random and regular basis. That might be just enough of a deterrent to make them think carefully about conducting fraudulent activities at your credit union.
  • If the employee is struggling financially, offer some solutions or resources to help. Many credit unions have financial advisors or financial counselors on staff. If your credit union offers that service, allow employees a certain number of sessions with them annually to discuss their financial issues for free. If your credit union does not offer this service, provide them with outside financial advisory information.

Some great credit counseling agencies have partnered with the Cornerstone Credit Union Foundation. They are:

  • Tranformance (formerly, Consumer Credit Counseling Service)  |  |  Phone: 800-249-2227
  • GreenPath  |  |  Phone: 800-550-1961

Both agencies have certified credit counselors there to help consumers know their options. The staff member could receive guidance on managing debt, housing, budgeting, credit, student loans, and bankruptcies. Although these services are not free, their costs are minimal and may reduce the employee’s expenses more than the cost of the sessions. If the employee decides to use the service, they will have a custom plan developed for them including a customized budget.

The agencies also work with the client’s creditors and are often able to help them obtain lower interest rates and payments to help the client get back on track. (They are not debt consolidation companies). It might be just what your employee needs to see the light at the end of the tunnel. 

In a lot of cases, if the employee had seen another way out of their financial problems, they would have taken that over committing fraudulent activities. Give them that other option. Make sure all staff members are aware of the resources available to help them, not just those staff members that have been identified as high risk.

When your credit union chooses to endorse either their own counseling service or an outside agency, put that information in the breakroom or send it to staff members annually as a reminder of their options and resources.

As another bonus for the credit union, staff members who are more financially stable show improved work performance. One of the major reasons is because instead of worrying and thinking about their own financial difficulties, a financially stable employee can put those thoughts aside and concentrate on the task at hand and their members.

Finally, help your employees stay financially strong and on track from the beginning by giving them the resources and training for handling their finances. It is a sad truth, but many people have not learned the proper skills for budgeting, the cost of credit, how to manage their finances, or what their options are when things occur that are out of their control.

To maintain an environment that advocates financial freedom and stability, create a financial literacy program in your credit union. Both Transformance and GreenPath offer free webinars and financial training courses your staff members could utilize.

The National Endowment for Financial Education (NEFE) also offers free financial/retirement training and toolkits to help your staff members manage their money and savings.

Another great resource is the National Credit Union Foundation They offer several resources to you and your staff to build a financial literacy program and motivate your staff to achieve financial freedom.

Finally, consider the Cornerstone Credit Union Foundation. They will help you get started and point you in the right direction. It all comes down to motivation. Are your employees motivated to commit fraud or motivated to be financially stable?

Can you think of other ways your credit union can help motivate employees to work toward financial freedom? Share those ideas at

For more information regarding Employee Statement Reviews or Employee Loan Trend Reviews, contact:

Pamela Blevins, Remote Financial Services Manager
Financial Technology Resources
Credit Union Resources