There are inherent risks in the hiring process, including fraudulent claims by candidates. These include everything from relatively minor transgressions, like stretching employment dates, to severe and concerning deceptions, such as claiming unearned degrees or credentials or hiding one’s criminal record. Being aware of these risks is only the first step, and companies that don’t take steps to address them, such as thorough comprehensive background checks as part of their hiring policies, are putting themselves in peril. Several case studies have shown companies learning this lesson the hard way.
In one recent case, a semiconductor manufacturing company noticed that its finances weren’t adding up. Auditors traced the discrepancies to around the time when a new CFO had been hired – and so the investigation began. When contacted, the CFO’s previous employers reported that the individual had been terminated due to cash embezzlement, harassment and workplace violence. In the end, the case proved costly to the semiconductor company. The CFO was terminated and prosecuted, but nearly $200,000 had been embezzled, and most of it could not be recovered (it was already spent, as the fraud had been taking place over four years).
Proper background checks and a thorough vetting of references would have exposed the fraudster before he had ever set foot in his office as a CFO. The proactive approach would have saved the company in lost revenues, investment of manpower (extensive auditing and investigation) and damage to reputation.
When an organisation is ready to add a critical layer of security to its hiring process, the following should be considered:
- Evaluate the current process: What is the company’s existing, written policy for hiring new employees? How does it address background checks, due diligence, and other issues? Is the process followed in every case?
- Risk areas: Some positions are more sensitive than others. For example, the CFO at the semiconductor company was well-placed to commit fraud. What are some other job positions and responsibilities that have a heightened risk factor?
- Ownership of the process: Ultimately, who has the responsibility of vetting new hires? Is it ownership? Human resources? Individual managers? It might be a collaborative process. All of those who are involved in hiring should also be involved in the implementation of a due diligence solution that includes background checks.
- The current workforce: Proper due diligence doesn’t just apply to prospective new hires. It should also be used to periodically evaluate your current workforce. Examine the various roles and personnel at your organisation, and consider a policy that addresses risk areas with background checks to ensure that you don’t have any employees among your ranks that might have criminal backgrounds or other issues that your company is unaware of.
After performing a thorough evaluation of the organisation’s needs in terms of effective pre-and post-employment background checks, it’s time to consider whether to conduct such checks in-house or to use an outside expert firm.
Some larger corporations might already have access to dynamic resources for background checks, and a team of trained staff to conduct them. Most businesses, however, do not. In such cases, enlisting the services of a firm that conducts background checks as part of their main course of business makes sense. Investing in proper due diligence can save severe problems down the road.
Managing your people through COVID-19
The COVID-19 pandemic is undeniable affecting the world. And the situation is changing at an hourly rate as we go into a second global lockdown. Businesses are having to adapt quickly in order to survive, i.e. cutting steps in their hiring process, and no-one knows how this will play out. However, there are ways you can mitigate the impact, learn how with this FREE ebook. Taken as a whole, this ebook is the perfect primer for any HR professional, business leader and companies looking to avoid employee background screening risks. It provides the tools and knowledge needed to effectively stay ahead of COVID-19. Read the answers to the following questions:
- How to turn the tide’ on coronavirus crisis?;
- COVID-19 Action point checklist;
- Background Screening: Essential Checks;
- 6 steps for good practice in connection with COVID-19;
- 11 Steps to Reduce Personnel Costs;
- COVID-19 General advice;
- How to remove any danger to your business during COVID-19;
- … and more!
Frequently asked questions about background checks
Get answers to frequently asked questions about background checks/screening cost, guidelines, check references etc. This eBook is a compilation of all of the background screening related questions you ever needed answers to:
- Does a candidate have to give consent to process a background check/screening?
- How long does it take to conduct a background check?
- When should I conduct pre-employment checks?
- How often should I screen employees?
- How to collect references and what to ask?
- How much does it cost to conduct background checks?
- What is the difference between employment history verification and employment reference?
- How do I check on entitlement to work?
- How to conduct identity checks?
- What will a financial regulatory check show?
- Is it possible to identify a conflict of interest during checks?
- What is a bankruptcy check?
- What about directorships and shareholding search?
- Can I have access to a criminal watch list?
- Anti-money laundering check?
- Can we conduct FACIS (fraud and abuse control information system) searches?
- … and MORE!
> Taken as a whole, is the perfect primer for any HR professional, business leader and companies looking to avoid employee background screening risks. It provides the tools and knowledge needed to make the right decisions.