Written by Gordon Webster, Jr.
When it comes to workplace fraud, the numbers are staggering.
Research from the Association of Certified Fraud Examiners finds that dishonest employees cost US businesses nearly $1 trillion annually.
The average business fraud case involves a loss of $150,000, and 25 percent of cases cost at least $1 million.
For organizations, occupational fraud costs 5 percent of annual revenues, and 30 percent of US business failures are tied to theft, embezzlement and use of company time for personal gain.
That should be enough to prompt every HR manager to take immediate notice. They can never be too careful about vetting potential hires, including verifying academic credentials, previous employment and personal references.
There’s even an industry devoted to checking out hires, including HireBox, which provides pre employment testing services and employee performance appraisals.
Patrick Valtin, president and CEO of HireBox, said businesses are hiring dishonest employees despite internal security measures.
“Honesty is going to be, more than ever, the major issue in preselecting applicants,” Valtin said in a statement. “In addition to an observable decreased level of morality in the society, mounting evidence of dishonest applicants lying while job hunting is quite alarming.”
A 2003 study of 2.6 million job applicants showed that 44 percent lied about prior work experience, 41 percent lied about their education, and 23 percent of applicants falsified their credentials or made false claims on their resumes.
It was President Ronald Reagan’s administration that brought the proverb “trust, but verify” into the American political lexicon during tensions with the Soviet Union. It has meaning beyond the Cold War. There’s a certain amount of trust that employers must have for their employees. While I believe the majority of workers are trustworthy, all it takes is one bad apple to bring a company to its knees.
Employers, here’s a piece of advice: When it comes to hiring candidates, trust but verify.