Know who you are Hiring!
People are often the greatest investment an organisation will make, yet many employers put their business at risk by not background checking or at least validating the accuracy of a candidate’s claims on their CV before making a hiring decision.
According to research in 2014 by career matching website OneShift, more than 56% of CVs contain false information, most commonly containing misrepresented dates of employment, job titles, skills and accomplishment, salary, qualification, responsibility and references!
Many employers rely on the good faith of their candidate and business associates, accepting copies of CVs, degree certificates and letters as sufficient proof in support of their claims, despite the risk that some or all of the documentation may be falsified.
PeopleCheck’s background checking service takes the guesswork out of important business decisions and minimises the risk of appointing unqualified applicants, ensuring that you can proceed with confidence.
Reduce the Risk of Employee Fraud
KPMG’s Fraud, Bribery and Corruption Survey (Australia & New Zealand) reported that the total value of fraud experienced across respondents was $372.7m, the average loss per organisiation a staggering $3.08m! Findings revealed that 75% of major frauds were committed by insiders, which was up 10% on the previous survey. There is also a growing incidence of fraud being committed by senior executives and directors, with figures doubling since 2006. Similarly, the PricewaterhouseCoopers Global Economic Crime Survey 2014 collected information from 5,128 respondents across 99 countries and reported that frauds committed by internal perpetrators accounted for as high as 71%, depending on the industry.
Financial loss to a business is only the starting point of a ripple-effect of impacts that can be felt by an organisation as a result of fraud. These can include:
- Damage to industry/community reputation
- Decreasing share price
- Statutory non-compliance resulting in litigation
- Negligent hiring litigation
- Embezzlement of company/client funds
- Misuse of confidential information
- Disruptive and dangerous staff
- Theft of goods and equipment
- Low employee morale/productivity/ workplace culture
- Terrorist threats
Background checking can assist an organisation minimise the risk of fraud by screening:
- Potential employees that may have a history of fraudulent or undesirable behaviour – From criminal convictions and bankruptcies to stealing company funds and being terminated from employment, background checks can highlight areas in a candidate’s past that potential employers should be aware of!
- Employees where a change of role or circumstance could present an increasing risk to a business – The PriceWaterhouseCoopers survey reported that the typical fraudster has been with the business between three and five years. Often these employees have the necessary opportunity to commit fraud, as they know internal controls well. A thorough background checking program that screens employees on a regular basis or on role change can assist in reducing the risk of long-term employees that suddenly cannot resist opportunity.
Comply with Regulatory Requirements
Many Australian industries are regulated by authorities such as ASIC, APRA and AUSTRAC (AML), where background checking is mandatory for licence applications and due diligence practices. Similar compliance requirements are enforced elsewhere, such as the health and aged care industry where National Police History Check are necessary for some roles and the ASX corporate governance principles which outline directors of listed entities must be adequately screened prior to appointment.
PeopleCheck assists many of our clients in meeting their regulatory obligations in order to avoid non-compliance and potential liability.
The effectiveness of background checking is evidenced by the growth of the industry, as more and more organisations realise how crucial it is to validate the background of their employees.