Preventing employee theft
The Arizona Republic has a great article titled Facing the issue of employee theft. The paper zeros in on the need for small businesses to be aware that it’s not just the Wal-Marts of the world who suffer from fraud losses. Here’s a quote:
The 2006 report by the Association of Certified Fraud Examiners showed that businesses with fewer than 100 employees suffered a median of $190,000 in fraud losses. Without safeguards, any business is susceptible to fraud, especially common forms like check tampering, fraudulent billing and stealing money before it’s recorded.
Look at that figure. For Wal-Mart, $190,000 is a rounding error. For a small business, it could be a killing blow. In addition to careful, due-diligence hiring including a background check, here are some things you can do to prevent insider fraud and limit its potential impact.
- Sign your own checks
- Have an way that employees can report fraud anonymously
- Get to know your company financial records (you should do this anyway)
- Conduct surprise audits
Here’s the most important thing: implement a system of checks and balances. In most small business fraud cases, one employee was allowed to work essentially unchecked.
Keeping up with immigration reform
You would think that as a self-proclaimed “Nation of Immigrants” we would have figured out an immigration policy by now. That’s not the case.
In the last few weeks, immigration bills dripping with amendments have seemed certain of passage. Then they were “killed.” Then, like creatures in those old horror movies, they’ve come back.
If you’re puzzled about what’s going on, join the club. Unless you’re really passionate about this issue yourself, the odds are good that you only see news stories on this every few days.
If you want a quick overview of where we are now, check out the Sunday, June 18, edition of the Washington Post column, A weekly roundup of the buzz from the Sunday talk shows.
You’ll find out where things stand now, but remember it will all change. Expect immigration reform to come and go, borne on the winds and tidal currents of politics.
When immigration reform is done it will be sure to have an impact on how you do business. There will certainly be changes in how you hire and what records you keep. There will be changes in the penalties for hiring illegals. And there will be new tools to help you do what you have to do.
In the meantime, sit back and watch as the politicians do their thing.
House moves on instant gun background check legislation
Last week the House passed legislation designed to shore up the gaps in the instant background check system that allowed Seung-Hui Cho to purchase the guns he used to kill 32 people at Virginia Tech. From the Associated Press:
The measure would require states to automate their lists of convicted criminals and the mentally ill who are prohibited under a 1968 law from buying firearms, and report those lists to the FBI’s National Instant Criminal Background Check System, or NICS.
The most important fact about this action is that the measure had the support of the National Rifle Association. That means the bill is likely to become law. For that to happen, the Senate has to approve it as well. That’s the next step.
Trust, but verify
President Ronald Reagan described his policy on dealing with the Soviet Union on arms treaties this way: “Trust, but verify.” That’s not a bad position to take when you’re considering hiring someone to provide elder care for your parents.
The American Association of Retired Persons (AARP), the largest senior advocacy organization in the United States, has gone on record supporting a bill sponsored by Senators Herb Kohl (D-WI) and Pete Domenici (R-NM) that would establish a national criminal background check system for employees whose jobs involve one-on-one contact with patients in long-term care.
Normally, I get my back up a bit when the government has got yet one more idea of how to tell people or businesses what to do, but I’m in favor of this idea. That’s because the world has changed.
When society and communities were more closely knit, the people we picked to help us care for our older parents or young children were people we knew. We either knew them personally or we knew people who knew them. And we may have known them for their whole life.
So, when we admitted them to a position of trust, we had a basis for it. No more.
Today the people who may wind up caring for our fragile parents or vulnerable children are people we’ve just met. And those care positions are positions of great trust. We trust those people with the lives and well-being of those we love.
That’s why I’m in favor of mandatory background checks for anyone that […]
The inside threat
American Surveyor just published an article titled Surveying Equipment Theft. The author, Bryan Baker, discusses theft by outsiders, but he points out that: “It is a sad fact that some equipment is stolen by company employees.”
That’s not just true for surveyors. It’s true for you, too. Here are four reasons why untrustworthy employees are especially potent theft risks.
They have access. If you’ve got an office, they’re already inside. If you’ve got a job site, they’re already there. They don’t have to break in or sneak through a gap in the fence.
They’re familiar. If a stranger wanders into your office or on to your job site, people notice. They stop what they’re doing to see what the stranger wants. People who work for you can wander about freely.
They know the value of what they steal. Mr. Baker makes that point about special surveying equipment, but it’s true for most office and construction equipment, too.
They have your trust. When you hire someone, you start treating them like part of the team. Most of the time that’s just fine, but someone who’s got mischief on his or her mind is going to use that trust for their own ends.
You can’t hire security guards to watch everyone all the time. But you can screen everyone well and investigate thefts rigorously.
Screen well. A criminal background check can highlight applicants who may have a criminal past. A pre-employment credit check can help you spot applicants living beyond their apparent means.
Screen everyone. Don’t just screen the […]
Red flags for new employees
There’s an interesting discussion going on at the EvilHR Lady Blog about “Red Flags” and hiring. It got me thinking about some basic things you should do when you receive an employment application that looks good enough for you to consider the person.
A “red flag” is any indicator that you may want to find out more. You may want to clarify an issue. You may want to get more information. You may want to ask about why your applicant did something.
Before the background check
Start with the basic documents. You should have an application and a copy of the applicant’s unaltered, government-issued photo ID. You may have a resume or other documents that the applicant has shared with you.
Gaps are red flags. Go over the application. Make sure everything is filled in. If it isn’t, find out why. If there are gaps in the employment history, get an explanation. Clarify reasons for leaving previous jobs.
Inconsistencies are red flags. This sounds simple, but you’d be surprised how often employers don’t check to make sure that the names and signatures are the same everywhere. Make sure the picture on the ID looks like the applicant.
If everything still looks good, it’s time for a background check. With a criminal check in hand, you can look for another set of red flags.
Using the pre-employment credit check
If the position involves access to cash or significant financial responsibility, a pre-employment credit report may be called for as well. Look for inconsistencies again. Start by comparing […]