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Who are you really?

As internal fraud continues to escalate, companies need to look at the source of the problem in a proactive manner. The million-dollar question is whether employee screening and verification is the solution. Hi-Tech Security Solutions got the lowdown on this controversial issue from three companies involved in human risk assessment and management.

According to Jenny Reid, founder of IFacts, employee verification forms one part of the equation. “However, no tool can provide all the answers and solutions. Upfront, it is important to define pre-employment screening, because it could be as simple as a quick criminal record check or as detailed as an extremely complex process entailing many elements. This is a very broad topic that demands unpacking and I would not recommend that companies employ a recruitment agency to undertake the process.”

Jenny Reid

Reid points out that the risk is not always only resident with permanent employees, but that contract employees also bring an element of risk to the table. “It is wise to tailor a pre-employment screening policy to incorporate all people employed by a company.

“Similarly, one should give cognisance to the risk that suppliers bring to a business entity, through their potential to collude with employees. Our fraud prevention triangle therefore incorporates permanent employees, contract employees and suppliers. We have built a database that searches for any telephone numbers or address details that are common to the various parties.”

Customise by position

Erna Penning, MD of iPAC, said that it is important to customise the screening and verification process according to the risk of the particular position and to ensure that the potential employee meets and exceeds all criteria, including competency.

Erna Penning

Nina de Winter-Peer, head of communications at Managed Integrity Evaluation (MIE), agreed and added a sentiment shared by all three interviewees. “While pre-employment screening forms the crux of the matter, one should not forget the importance of conducting regular screening tests after the person is employed by the company. Personal circumstances change and job responsibilities may mean increased risk exposure. Therefore, by implementing regular checks, one can avoid risks spiralling out of control.”

Nina de Winter-Peer

Reid added: “Employees are not always cognisant of the sensitivity of the data and information they handle on a daily basis. However, the well-organised syndicates are able to identify possible targets and systematically gain their confidence to acquire valuable data or gain access to the company’s systems and assets. Probability testing for integrity should be undertaken on a regular basis to mitigate against this.”

Reid cautioned that companies need to guard against assumptions regarding the risk potential inherent in employees. “For example, there is a common misconception that cleaning staff are a low-level risk. However, they are able to move freely around in every department and they have access to visual and auditory information, which could possibly be confidential. Risk levels need to be carefully defined and a checklist should be implemented.”

Establish the identity

According to De Winter-Peer, pre-screening employees will pre-empt any problems. The first step is establishing that the person is who they say they are through identification verification. It is also important to ensure that any claimed skills or qualifications are legitimate. Additionally, psychometric testing will pinpoint a number of areas including behavioural issues, character flaws, incompatibilities and suitability to the job.

“By determining the risks as well as the fit of the person within the organisation, one is able to eliminate any unnecessary future costs associated with dismissing an unsuitable employee and then retraining someone to replace them. In addition, by placing the right person in the right job, productivity and morale are increased, leading to increased job satisfaction, loyalty and longevity of service,” added Penning.

Checking for criminal records requires the applicant’s permission. “We advise clients to stipulate in the employment contract that regular re-testing, screening and verification for a number of factors, including criminal record, are permitted,” said Reid.

“MIE would like to emphasise that the only legal manner in which to conduct a criminal record check is by submitting electronic fingerprints to AFISwitch, which then searches the AFIS database of fingerprints,” said De Winter-Peer.

“In the past it was possible to check if someone had a criminal record by sending a name and ID number to the SAPS. However, searching through records with a name and ID number is not accurate because nothing prevents the person who is being arrested from giving a fake name and ID number to the police. Due to this not being a very accurate process, a new system was implemented and we are now required to capture candidate’s fingerprints with an electronic reader and submit this with the request. It is not always easy to verify the identity of the person but with fingerprints you always know that you have an accurate match,” De Winter-Peer added.

De Winter-Peer cited the results of the two different checks: Criminal by name and ID returned only 4% positive result. AFIS checks return an 11% positive result, and 6% case pending result.

Behavioural issues can be identified with customised psychometric testing. “Although not all people with a criminal record or with behavioural problems are high risk, it is important to carefully analyse the results of psychometric testing to determine whether their behaviour could negatively impact on fellow employees and the reputation of the company,” De Winter-Peer explained.

Psychometric and profiling tests also allow companies to identify an individual’s drivers. “It is advantageous to determine what motivates each person. For example, are they task-oriented, and will they be suitable as a team player in this particular organisation.”

Do it right

None of the interviewees recommended that companies undertake their own screening and verification. “This is best handled by a qualified human risk assessment and management company. Clients are simply not geared up with the resources to access the multitude of data involved in ascertaining the credibility of an employee. A number of benefits accrue to businesses when investing in the services of a risk assessment company and these are achieved by leveraging the experience, capabilities and capacity of specialist companies,” said Reid.

Reid cited the changes to both the Credit Act and criminal record resources. “In addition, companies of our ilk will investigate the CCMA records to determine whether an employee has a history of suing employers. We also extract valuable data from human resource climate surveys to plot employee trends. In a nutshell, bona fide risk assessment companies understand the rules of engagement and are able to negotiate volume-based discounts when undertaking checks.”

“There is no guarantee that the company will receive a result that they can trust. The HR practitioner may not be speaking to the correct person at the institution and they further have no way of knowing that the information that they receive is legitimate. This is where the relationships that background screening companies have with the sources of the information is so important. Benefits of using reliable agencies include direct integration with the sources (for example, AFISwitch, Credit Bureaux, Umalusi and NQR), long-standing relationships with trustworthy contact persons, as well as fully track-able audit-trails,” said De Winter-Peer.

“It is critical to build trust for the sustainability of long-term relationships. By carefully analysing the business philosophies and strategies of individual organisations, determining core goals and processes, one can customise a package that protects the company,” said Penning.

In addition to checking for technical and administrative skills, driver’s licences, vehicle registrations, creditworthiness and criminal records, some companies are now employing a ‘happiness scale’. “The wellbeing of employees is crucial to the sustainability of a company. Happy employees are more productive and less inclined to partake in criminal or fraudulent activities. The happiness scale clearly pinpoints dissatisfaction and can be made part of management appraisals, whereby a manager is penalised if their employees are unhappy,” said Reid.

In conclusion

The value of pre- and post-screening and verification cannot be overemphasised. “The return on investment is huge. We have documented evidence that clients have saved 10% of potential future losses by demanding that employees undergo testing,” said Reid.

Although many companies feel that they are restricted by budgets, the cost of not implementing suitable credible screening and verification checks could far outweigh the cost of doing so.

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