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Post employment screening is just as important as pre-employment screening

New contributor: Jenny Reid of Griffiths and Associates who can be contacted at mailto:reid@icon.co.za
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While pre-employment screening plays a critical role in helping to protect companies from dishonest employees, too few realise that post employment screening, conducted at regular intervals throughout an employee's term of tenure, is equally as important in protecting company assets.

"The KPMG survey for 2002 showed that in 21 percent of all cases where existing employees were involved in fraud, their lifestyles changed to a point where it was noticeable, but that these signs were ignored" says Jenny Reid, a director of Griffiths and Associates, this country's oldest private investigations company which also specialises in employee screening.

"This KPMG figure only relates to the blatantly obvious signs - such as for example, the acquisition of consumer items out of proportion to the employee's salary level- and does not include changes in lifestyle which the employee might be able to hide from direct view of the employer," Reid says.

An employer might start his or her life with a company with a clean criminal record and the correct qualifications - although pre-employment screening shows a shocking 25 percent fraud rate in qualifications submitted - but then what guarantee does a company have that this will always remain the case?

"An employee with ten years' work experience is rarely, if ever, checked out as a potential security risk, yet the empirical evidence is overwhelming that serious fraud is committed by people in important positions which they have held over long periods of time," says Reid.

There are legal issues at play as well: the Labour Relations Act makes it illegal to dismiss someone just because the have acquired a criminal record, unless it is directly specific to the job they hold.

However, post employment screening allows employees to quantify the risk to which they are exposed, and then to manage that risk. "Regular credit checks, sudden judgments, criminal convictions - these are all developments which a responsible employer should be aware of in their workforce," continues Reid.

The detail of post employment screening is applied differently according to job level status - or put more bluntly, at what potential of risk the employee carries for the company. "A cleaner, for example, will be less of a risk than a buyer, and a cashier more of a risk than a switchboard operator. A company carrying out post employment screening must prioritise how far they wish to take such checking," Reid says. This is where using an outside third party, whose specialist skills and core function it is to asses such potential risk, can be of great benefit.

A recent post employment screening carried out by Griffiths and Associates for a major retail group showed that seven percent of all employees who had started work with a clean record, had, since commencement of employment, acquired criminal records for serious offenses, ranging from robbery to drugs - all without the employer's knowledge.

"Drugs are a particularly important sign for which to watch, as substance abuse is always an expensive business which often forces abusers to increasingly desperate and more extreme methods to fund their habit," Reid says.

Once problem areas are identified - and they can range from criminal convictions to credit judgments to domestic crises, all of which can affect an individual's behaviour or raise the possibility of them committing some type of fraud - the issue then arises as to what can be done about the situation.

Despite the constrictions of the Labour Relations Act, if an issue is identified, there are ways of dealing with it in a perfectly legal manner. "A first good course of action is to speak to the individual concerned, and ask them how they can be helped before the situation reaches a point where dishonesty becomes the only way out," Reid says.

"Then there are ways to handle the problem according to the severity of the issue uncovered," she continues. "It is possible to move staff away from areas of risk where their exposure to opportunity is not as high, for example, away from cash handling functions."

The KPMG 2002 survey revealed that fraud perpetrated by employees had increased 13 percent between 1999 and 2002, and that in more of a quarter of the cases reported, such fraud had cost companies in excess of R1 million.

"The first sign to watch out for -as confirmed by the KMPG survey - is a change in lifestyle of the employee concerned." This can be either in an upgrade in lifestyle such as the acquisition of material goods - a new flashy car for example; but also in a downgrade in lifestyle. Such signs can be in terms of physical appearance, punctuality, work levels and productivity declines, which are often the surest signs of either substance abuse or domestic crises of one sort or another," Reid says.

It is not only permanent staff who need regular screening - outsourced staff, or sub-contracted companies, also need to agree to independent third part screening. "Cleaners, guarding companies and all personnel who come onto a company's premises, in the same way that permanent staff do, are subject to the same opportunities, stresses and social issues, and therefore need to be treated accordingly," Reid says.

Post employment screening therefore takes on a wider ambit than pre-employment screening. It will deliver to the employer vital information on lifestyles and social issues, apart from the more conventional driver's license, educational qualification, credit and criminal record checks.

"While pre-employment screening will help companies identify problem areas before they start, post employment screening will ensure that companies can minimise the risk to which they are exposed over the long term," concludes Reid.

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2. Checklist of pre-And post- employment screening tools
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Below are descriptions of various screening tools, including type of information, why the information is important, and their limitations:

>> Criminal record 

>> Driver's license 

>> Identity number

>> Credit report

>> Employment verification

>> Employment references

>> Education verification

>> Professional registrations

CRIMINAL RECORD

WHAT? Felony and misdemeanor convictions, and pending cases, usually including date and nature of offense, sentencing date, disposition, and current status. A search generally goes back seven years. Employers can also search court records. It is critical to search both for felonies and misdemeanors in state court, since many serious violations can be classified as misdemeanors.

WHY? Critical information to protect your business and employees. Protects employer from negligent hiring exposure and helps reduce threat of workplace violence, theft, disruption and other problems. Failure to honestly disclose a prior criminal conviction can also be the basis not to hire. Many employers check all jurisdictions where an applicant has lived, worked or studied in the past seven years.

LIMITS: Some restrictions on having certain information (such as arrests not resulting in convictions), or certain minor offenses. Employment cannot be automatically denied based upon a criminal record, but must show some sound business reason.

DRIVER'S LICENSE

WHAT? Driving history and whether the license has been legally obtained.

WHY? Gives insight into applicant's level of responsibility and/or truthfulness. Determine whether applicant keeps commitments to appear in court or pay fines, has a drug/alcohol problem, and license status. Also helps verify identity. "Driving for work" is very broadly defined and is not limited to driving positions.

LIMITS: An outside company on an employer's behalf can access this information. The alternative is having applicants personally obtain their own records, which is not practical and is subject to fraud.

IDENTITY DOCUMENT

WHAT? Provides names and addresses associated with the applicant, and may indicate any fraudulent use. May verify other applicant information.

WHY? Helps verify that applicants are who they say they are. Assists in determining where to conduct criminal searches. Critical to ensure employer is not the victim of a fraudulent application by someone with something to hide.
LIMITS: Where employer does not have a sound business reason to obtain a business credit report, the ID check gives information to help confirm identity and to uncover fraud.

CREDIT REPORT

WHAT? Credit history and public records such as judgements, and bankruptcies. May include previous employers, addresses and other names used. 

WHY? Helps determine whether an employee is suitable for a position involving handling cash or the exercise of financial discretion, as well as a possible way to gauge trustworthiness and reliability.

LIMITS: A credit report should only be requested when it is specifically relevant to a job function and the employer has appropriate policies and procedures in place to ensure that the use of credit reports are relevant and fair.

EMPLOYMENT VERIFICATION

WHAT? Basic verification includes dates of employment, job title and reason for leaving. Some employers will verify salary. Usually obtained from HR or Payroll.

WHY? This information confirms your applicant's resume, and verifies their previous job history. Helps eliminate any unexplained gaps in employment, which ensures that appropriate jurisdictions have been checked for criminal records. Critical to verify past employment even if past employers will not give a reference. 

LIMITS: Employers are often hesitant to give recommendations and may limit prior employment checks to the basic information. This service can be limited if not allowed to contact current employer, if past employer is out of business or cannot be located, or if employee was working through an agency.

EMPLOYMENT REFERENCES

WHAT? This is a more in-depth reference check that seeks job duties, performance, salary, strengths and weaknesses, eligibility for rehire, and other detailed information. 

WHY? Allows an employer to have a realistic assessment of a candidate from former employers. It promotes a better fit, confirms the hiring opinion and protects the expensive hiring investment.

LIMITS: Although most employers would like references, few will give them due to concerns over legal liability. However, an employer should still attempt to obtain references in order to demonstrate Due Diligence.

EDUCATION VERIFICATION

WHAT? Will confirm degrees, diplomas or certificates and dates attended.

WHY? Confirms education and ability to do the job.

LIMITS: Industry sources show that a fair percentage of all job applicants falsify information about their educational background.

PROFESSIONAL REGISTRATIONS

WHAT? The type of registration, whether currently valid, dates issued, complaints about professional misconduct, and any disciplinary measures taken

WHY? Confirms whether an applicant has the required credentials or registrations. There is a high incidence of job applicants making up or falsifying licenses or credentials.
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