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The pandemic, rising interest rates, and cost of living pressures – there are many reasons why people are feeling the pinch when it comes to money. And one tempting solution for employees is to become involved in fraudulent schemes at their workplace.
A recent survey we commissioned with 1,000 respondents in New Zealand even showed that 25% of employers have previously had employees steal from them and 8.3% had dealt with employees or contractors who misrepresented their identity.
What is employee fraud and what are the impacts?
Employee fraud, also known as internal fraud, is fraud or theft that is perpetrated by an employee on the organisation that they work for. It typically takes the form of stolen money or goods but may also be other benefits.
Employee fraud is often seen as a victimless crime – but this is definitely not the case. It causes flow-on effects for the employee themselves in the form of criminal prosecution; for colleagues who may lose motivation in their work and create mistrust in the workplace; and for the business itself, often resulting in the loss of significant amounts of money and even businesses being shut down.
In fact, the US Department of Commerce has reported that employee fraud is responsible for one-third of all business bankruptcies and that it results in a median loss of $200,000 per incident for small businesses.
How can background screening help?
One of the most important precautions that businesses can take is to conduct thorough background screening on prospective new employees and to ensure there is ongoing monitoring of staff during their tenure.
Background screening on candidates prior to employment helps organisations understand the integrity of the employees they hire. It also identifies any past criminal or financial issues that may be a red flag for potential misdeeds and fraud if hired. This information enables hiring teams to make more informed decisions when selecting a successful candidate.
Employees often don’t start out intending to commit fraud, rather, difficult financial situations may arise which prompt them into considering fraud. Ongoing monitoring therefore helps businesses understand whether employees continue to be suitable for the workplace and assess the chance that they’ll commit fraudulent behaviour during their time at the organisation.
Background screening and ongoing monitoring combine to help businesses hire the right people for their organisation and to mitigate and prevent cases of employee fraud. This saves businesses significant money, time, and reputational damage in the long-term, and is a foundational risk management activity for businesses to undertake.
How can National Crime Check help mitigate employee fraud?
National Crime Check is a leading provider of background checks in Australia and New Zealand. We offer market-leading technology to conduct thorough checks, which in turn enables businesses to have a full view of candidates prior to making an offer of employment and on an ongoing basis.
After decades in the industry, National Crime Check has integrations with the most authoritative Australian and New Zealand government data sources to ensure screening results are accurate and timely. Contact us today to discuss your background screening needs and protect your business from potential employee or internal fraud.