Employee Theft and Fraud is on the Rise
Employee theft and fraud is something that has always been a problem for businesses. On average an organization can expect approximately a 5% revenue loss from both, although something that may leave you incredulous is that that percentile is expected to rise in the coming years.
You see, many organizations are looking to cut expenditures and the one area that receives the axe first is employment background screening. With these more lax restrictions many businesses are allowing individuals that already have a predisposition to fraud and theft into their job ranks.
This led to 71,095 dishonest employees being apprehended in 2012, which should be noted, is up 5.5% from 2011. In those cases $50 million was recovered, also up 7 percent from the year before. Although a vast majority of thefts go unresolved or undiscovered. An estimated $50 billion is lost annually, a much larger and telling number than the recovered amount listed above. Statistics also show that only around one out of 36 employees is actually caught stealing by their employers, but an estimated one out of every three commit some degree of employee theft.
With the reality of every new applicant potentially being a source of theft and fraud, how do employers ensure they don’t get a bad apple? Well it begins and ends with introducing and maintaining an effective, yet affordable background screening procedure. This procedure should be reflective of all position being filled; meaning an applicant for an administrative position and another for a janitorial position should receive different scrutiny. This is because an administrator will have access to financial records and private information that could allow for potential fraud coupled with heightened responsibility, while a janitor won’t have access to that same data or require expert decision making. Although, ensuring both are suitable for the positions with no past criminal issues that conflict with the required job duties is equally essential.
Understanding just how important of a position employment background screening plays in the success of an organization is the difference in securing a reliable, trustworthy workforce and a seedier one. Deciding not to spend money on background screening only lessens the ability to thrive, while amounting to willful ignorance and only marginally removing organizational expenses. If an employer wants to reduce the average 5% revenue loss from employee theft and fraud, the only solution is to use employment background screening.