When Hiring New Employees…
One out of every 20 job applicants screened last year had a criminal record
When one company found $3 million dollars and their CFO missing, they called Ken Springer, the president of Corporate Resolutions, a business investigations concern.
Mr. Springer, a former white-collar crime specialist at the Federal Bureau of Investigation, started Corporate Resolutions in 1991 in New York, and has expanded it to 25 employees and offices in London, Boston and Miami, with a fifth planned for Hong Kong in October.
Most of his clients are private equity lenders and hedge funds that ask him to conduct management background checks at companies they are looking at, and to look into suspicions of wrongdoing at companies they hold stakes in. As layoffs increase, so does employee theft. And as loan defaults rise, so does the need for banks to track down the assets of borrowers.
There is plenty of wrongdoing out there. Employee theft alone exceeds $400 billion annually.
After spending nearly three decades investigating larceny in the workplace, Mr. Springer has some suggestions, especially for smaller companies, which are particularly vulnerable.
- Mr. Springer’s primary recommendation is to screen all potential employees, starting with their résumés. If you detect a single lie, he says, throw the résumé in the wastebasket. Be wary, too, of claims that are difficult to verify, gaps in applicants’ job histories and vague descriptions of what they did. If, for example, the computer hardware company tried to contact the three references listed by the candidate for chief financial officer, it would have learned that one was dead, one did not exist and the third had a low opinion of the candidate. Mr. Springer suggests that after authenticating the facts in a job candidate’s résumé, a background check should be done.
- Require job applicants to sign an agreement that allows you to do background checks and drug tests on them at any time during their employment. Make it clear that you plan to conduct such investigations. The troublemakers and other bad eggs will probably walk away.
- Make sure current employees know that everything on the company computer is company property, and that you have the right — and intention — to monitor their use and their e-mail messages.
- Never let the chief financial officer write checks or open mail.
- Buy fidelity insurance to cover theft by employees and vendors, which on average represents 5 percent of a company’s revenue.
- Look for red flags, for example, employees who never take a day off, a sign that they may be covering up a fraud.
