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Pre Employment Criminal Background Checks is the Only Way to Prevent Employee Theft!

25th July 2011
By Muhammad Saad in Business Law
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The fraud by Tyco and Enron executives made news headlines around the world. But beneath these extreme cases lie a number of smaller incidents that amount to a very large problem for organizations. The billions of dollars lost each year due to employee theft and fraud affecting both small and large organizations alike.

Many of the other entries have indirectly touched on this problem and suggested solutions to it. But this piece of writing will not only discuss about different aspects of employee theft but also give a solution to a problem through pre employment criminal background checks in a way that the problem cannot head-up again.

Recent surveys indicate that employee theft is the fastest growing crime in the United Stated. Companies have lost over 50 billion dollars annually as their employees caught stealing Time, Money and Supplies as well.

A recent example quoted a by a newspaper, is about an English employer who have figured out an employee thieve and tries to punish him in his own way but his own sleeves caught fire when the same employee sued him for hell stake of a money. First, have a look at the story then I will let you know the reason behind it.

“A business owner/employer in England found that one of his trusted employees wrote a company check to himself for £845 ($1,375.66 US) and then cashed it.

The employer gets enraged and decided to practice a bit of street justice. So he placed a sign — which read “Thief. I stole £845. Am On My Way to Police Station” — around the thieving staffers’ neck and marched him through town before eventually handing him over to the police.

But police relieved the thief off with just a warning, and then he sued his boss for humiliation, false imprisonment and lost wages. In the end, the business owner was forced to settle the lawsuit for £13,000 ($21,164)”.

So the story tells us about, handling employee theft cases by you own way is just not the way to precede. Employee theft is a not a small issue, any employer needs to plan a proper program to overcome that problem and prevent themselves from a business/financial loss.

The only way out is to make correct and wise hiring decisions and bonding hiring process with strong pre employment criminal background checks, credit history checks, and past employment checks.

Although it can be tough to pin point an employee theft, but some telltale signs of thieve employees may include; unusual behavior, such as defensiveness, irritability and suspiciousness, missing documents, frequently used names and addresses for refunds, unbalanced ledgers, inventory shortages, and merchandise frequently shipped to P.O. Box numbers.

But the first and foremost line of defense against employee theft, fraud and embezzlement is to adopt strict pre employment criminal background checks and credit history background checks before hiring anyone into the organization.

8 Tips to prevent Employee Theft, Fraud and Embezzlement:

1. Pre employment Criminal background checks: Consider background checks as the first step of hiring the job applicants. Background checks should be performed and should include a check on criminal history, civil history, driver license violations, as well as verification of education, past employment (including reasons for leaving), and references. Third party background checks companies are very reliable in detecting a criminal.

2. Credit History Background Checks: Credit history background checks are considered a must now days. As many potential employees have bad credit histories and they can be identified on throat. Credit background check on prospective employees, as people with financial difficulties are more prone to fraud. In order to do this, you are legally required to notify the job applicant in writing that a credit report may be requested. You also need to receive the applicant's written consent.

3. Zero Tolerance: Let your employees know that your company has zero tolerance for employee theft. This includes not only outright stealing, but also things such as taking a long lunch break without approval, wrong usage of sick leave when not sick, working slow or sloppy, or coming late or leaving early.

4. Amplify Your Company Policy: Write and distribute a company policy that outlines exactly what constitutes stealing. Contact your local police department if you do discover an incident of employee theft so you send a message to your employees that stealing will not be tolerated.

5. Be a Role Model for Your Employees: Business owners and senior management must themselves be role models of honesty and integrity, or they may risk setting up a work environment that justifies illegal and criminal activity.

6. Separation of duties is important: Avoid at all costs allowing the finances of a business to be handled and controlled by a single individual. No employee should be responsible for both recording and processing a transaction.

7. Run surprise audits and criminal activity background checks: Third party investigations are essential once a year. Also insist that your bookkeeper or any employee who has access to monies take a yearly vacation so you can examine their records.

8. Use Customer Complaints identify Employee Theft: Personally look into customer complaints that they have not received credit for payments.

Concluding Remarks:

Pre employment criminal background checks are extremely helpful in reducing employee theft and embezzlement. Now that more and more employers have realized that theft, fraud and embezzlement can happen to them and it’s prevalent in all type of organizations and positions, background checks on prospective employees have become increasingly popular over the last few year.

Secondly, background checks may limit an employer’s liability arising from claims of negligent hiring. As an employer, you have legal duty to provide a safe working environment for all the employees. Accordingly, investigating the background of employees helps satisfy a legal duty also.

Finally, pre employment criminal background checks are the source of decreasing the likelihood of discipline-related problems at the office, as well as workplace violence.

The author of this researched article is a professional writer indulged in writing for growing businesses all around the world; his recent work is about background checks industry, its evolution and its development in the online world.
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