Resume Fraud and Employee Theft Rise as Economy Dips
Raise your skepticism a few notches. Résumé fudging is on the rise again. The percentage of applicants who falsify their educational credentials and job experience typically goes up when the economy heads south. Recent layoffs and the financial meltdown have applicants feeling desperate, and desperate applicants tend to add that extra punch to their résumés.
Investigators at Kroll, Inc., which does employee background checks, estimate that 20% of job applicants exaggerate their educational backgrounds. More than 60% of HR pros told the Society for Human Resource Management that they have uncovered inaccuracies when checking the veracity of résumés.
Applicants lie most about their education, followed by their reasons for leaving past jobs, salary, job titles, scope of duties and criminal records.
Here are six ways to spot résumé fraud:
• Check for inconsistencies. Résumé-writing software can make anyone look good. Look for slip-ups in dates (such as overlapping start and stop dates) and contradictions between job titles and duties.
• Require all interviewees to fill out applications. Then look for inconsistencies between the résumé and the handwritten application.
• Test skills. If an applicant claims to have proficiency in a particular computer program or that she can work with a certain factory machine, do a skills check. To avoid charges of bias, test all applicants and ensure your test is business related and without any bias.
• Check references, then ask for more. Demand that applicants provide phone numbers for all past employers, and make the call. Also, ask for names of former supervisors, key vendors, etc. Always call the college admissions office to verify degrees and other claims.
• Probe "self-owned business" claims. When applicants work for themselves, it's too easy for them to cook up experiences. Ask for details about their claims, including names and numbers of past clients.
• Don't confuse referrals with references. Do the same thorough check on candidates referred from co-workers or friends that you would on candidates from other sources.
The Wall Street Journal reports that 27% of respondents in a nationwide business survey said crime in the workplace has risen during the current economic crisis, and cited three key factors that generally lead to employee theft.
1. Motive - A floundering economy can contribute to or even be the primary motive influencer. Employees are feeling pinched at a time when employers may not be able to help out with a much-needed raise. Employees who have survived layoffs and are required to work longer hours still have to take care of the personal business they used to take care of on their off time. And the more pressure people feel, the more enticing an Internet break can become.
2. Rationalization – It b ecomes easier for employees who are feeling the squeeze to take home company-owned items such as office supplies, products they produce, electronic equipment and food items. Add reports of CEOs continuing to receive large salaries and bonuses while average salaries are being squeezed, and the rationalization factor increases exponentially.
3. Opportunity - Employers are hot targets for theft because workers know their systems, controls and weaknesses, and they can bide their time waiting for the right opportunity.
A struggling economy provides a growing incentive to steal. Employees may need more money than they're making to pay off debt or even put food on the table. And “ Tim e theft ,” can increase when employees fearful of layoffs play it safe by looking for their next job while at their current position.
Preventing Employee Theft
- Communicate with your employees about the issue
- Increase the frequency of internal audits
- Increase oversight by the owners
- Promptly reconcile bank statements
- Use a payroll service
- Obtain embezzlement insurance
- Add surveillance cameras. Be careful about this option, because it could have a detrimental effect on morale, and lead to liability issues as more states and localities are restricting such invasive surveillance.
- Remember, the perception of detection is a very good deterrent
In our opinion, it's also a good idea for you as the boss or CEO to make concessions in your own salary and/or bonuses if you know your employees are suffering. Letting your employees know that you're in a boat that's at least close to theirs will make it much harder for them to rationalize theft.
If your business needs our expertise help or advice, we are always there for you. You are always welcome to call our business consultants at (510) 235-1044. |
