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 serious 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 through 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 current, 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 using 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 serious problems down the road.
Who is CRI Group?
Based in London, CRI Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.
In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 19600:2014 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.