Narcissistic Behaviors

Employee theft is probably one of the hardest forms of theft to detect and resolve. The problem is that these employees have an advantage over you. They know your systems, they know who is observant, and they know when the best times to steal are. Employees also have access to different processes and assets that shoplifters do not have.

An employee who is embezzling money, instead of stealing merchandise, typically will not show indicators that would make you initially suspicious. What we have found over years of investigations and interviews is that these employees do show other behavioral patterns. When combined with certain access to accounts, billing, and cash processing, the behavior should be a red flag to their employers.

The first warning sign is the employee displaying any overtly narcissistic behaviors. The textbook definition is that a narcissistic personality is a person who is excessively preoccupied with personal adequacy, power, prestige and vanity, mentally unable to see the destructive damage they are causing to themselves and to others in the process.

Typically these employees will build themselves, their position and their responsibilities up. They withdraw other employee access to their jobs, saying the other employees simply cannot perform the job functions satisfactorily. The other employees are under qualified, and the employee is the only one who can do the job right.

They will then validate and secure their positions by saying they are the only ones who can do their job. What would you do if I left? No one else can do this, I have to be here. They will often change the way processes are done, or have their own filing system. They will do anything they can to simultaneously confuse anyone who attempts to look in on what they are doing, and validate how complicated their job is; in essence creating their own job security.

What they are actually doing is finding ways to keep everyone else out of their paperwork. If they are embezzling, they are siphoning money by creating false invoices or payments, they can be creating write offs, even when a customer pays in full. They can be floating money from one account to another to cover up the cash they are taking.

The solution is to be wary of any employee who is displaying these narcissistic behaviors. They are building themselves up, while pushing blame onto those around them in an attempt to derail you from becoming suspicious of them. Next, make sure you have a check and balance system in place. There should be a standard way to handle all accounting practices. No one should create their own system. This system should also have a periodic audit to ensure compliance and integrity of your books.

Even though it makes more sense financially to hire only one person to do all of your paperwork and accounting, have a second person split the responsibilities. Accounts payable and accounts receivable (sales, receiving, cash management) functions should be split to lessen the likely hood of an employee embezzling money from you.