In the first post of this series, we discussed two methods to address employee theft once it has taken place. This segment of the series advocates two preventative methods.
This is the one thing that the Association of Certified Fraud Examiners endorses above all other prevention methods to decrease your losses by half. There are programs that you can sign-up for that allow employees to actually talk to someone, there are others where an employee can leave a recording. Built into the KPA Human Resources Mangement system is a program that allows employees to answer a series of online prompts that results in actionable information. The program also has options for employees to report things anonymously. If your reporting system allows for confidentiality, people are much more likely to bring issues forward. If an employee shares in the benefit of solving the problem in the form of a reward, they are also more likely to report an issue that is costing you money.
Your background checking provider who does applicant screening can also screen your current employees and vendors. While it is illegal to have a blanket strategy that states “We will not hire felons,” you can make sure the type of background check that you perform has relevance to the position that you are hiring for. A good hiring manager uses the background check, and also takes into account time since crime, type of crime (someone with a history of embezzlement is not your best choice for a controller), and restitution.
Check references, do a Google search. Don’t discriminate, but watch for red flags such as a history of worker’s compensation reports. For example, if a candidate has a history of back injuries, and all candidates being equal, that individual may not be the best choice for a position that involves heavy lifting. Due diligence in this area goes a long way to prevent workers compensation fraud.
If you are concerned about a current employee, perform a background check. You should notify the employee that you are performing the background check, and reasons of retention or promotion are acceptable.
Check your vendors and 1099 contractors or contingent workforces. Ask staffing firms to provide you with a copy of their comprehensive reports.