When you offer someone a position at your company, you want to have 100% confidence that that person is going to be honest and loyal to you and your organization.
Unfortunately, company loyalty is now just a nice concept that was popular in the 1960s. It’s every person for oneself in the job market these days, which can make you doubt your hiring choices.
What are the most common areas that companies lose out to in terms of employee dishonesty? And how can you assure yourself and your shareholders that you are hiring the best of the best?
Here are the top four areas that companies suffer from financially because of dishonest employees:
1. Employee theft
According to a 2017 report, employee theft costs American businesses $50 billion a year. This number increases exponentially if you include the thefts committed by white collar criminals in the banking and finance sectors. Overall, employee theft is a huge problem for companies, one that most impacts their bottom line. Employee theft can be anything from stealing money from the cash register to lifting office supplies to embezzlement of company funds.
2. Workers’ Comp Claims
Workers’ compensation also costs employers money every year. While the workers’ comp program is beneficial to those who have legitimately been injured on the job, fraudulent workers’ comp claims cost companies thousands of dollars. To have an employee not be able to work means the cost of replacing that employee temporarily and retraining that person, as well as the monetary cost of paying out large sums of money to the injured employee. Company policies should be in place to make certain that all workers’ comp claims are verified and accurate so that your company is only paying on legitimate claims.
3. Violating non-Compete Agreements
Non-compete agreements are legal documents that employees sign when they are hired. These agreements keep intellectual property within that company by making sure an employee agrees not to work with a competing company or start a similar business for a certain period of time after leaving the company. By violating these non-compete agreements, ex-employees can cost you thousands of dollars in untold expenses.
4. Timecard Fraud/time theft
An astounding 45 percent of hourly workers have admitted to fudging the hours they work, or have clocked coworkers in or out fraudulently. Timecard theft is a huge problem, one that costs companies millions of dollars every year as well. This could come in the form of timecard fraud, “buddy punching,” faking illness, taking long lunches or breaks, or using company time for personal appointments or other business. Any time spent on personal business instead of company business is regarded as stealing from the company.
One of the best ways to ensure that you are hiring the best, most honest employee is to perform a background check on every potential candidate. A simple Social Security number trace may only cost you $2-4, or if you want a nationwide criminal and credit record check, it could be $75-100 per person. You may think this is a lot of money to invest in potential candidates, but it will give you the assurance of knowing that you’ve hired the most trustworthy employees available.
The money you spend upfront on background checks is priceless when you know that you’ve hired the most honest people. Companies such as Landlord Station, a cloud-based property management software company based in Dallas, Texas, perform background checks on potential tenants rather than potential job candidates, but the protocols are identical and the results are the same. Investing in a robust background check saves the company both money and headaches in the end.
If you’ve hired someone and you still feel uneasy about that person’s trustworthiness, or if you are beginning to suspect they are robbing the company, the next step may be to hire a private investigator to look into his or her activities. New York private investigator Darrin Giglio recommends hiring a trusted third party who can look into the employee and gather the needed evidence of wrongdoing. “A good private investigator can protect the integrity of your business,” Giglio says. “If you can get video surveillance of an employee cheating your company out of time or money or intellectual property, that’s far stronger evidence than just a hunch.”
Hiring a professional to uncover any wrongdoing at your place of business may make the most business sense. A PI can obtain any specific evidence you may need, including video evidence of a former employee coming and going at a competitor’s office, paperwork such as a purchase order or quote on a new company’s letterhead with the former employee’s name on it, or even a money trail that unequivocally implicates your employee in wrongdoing. Giglio advises: “The paper trail – and now the electronic paper trail – is a great way to gather the appropriate evidence.”