The cost of failing to undertake pre-employment background checks
For businesses, reputation is an intangible asset that influences customer confidence. A tainted image is a nightmare for any company, especially if it is the result of the activities of a deceitful employee, such as the fraud case that recently took place in Indonesia. This risk can actually be minimized by carrying out pre-employment background screening.
Fraud involves company attributes
The case became viral on social media when a prospective customer, who was the victim, declared that she was defrauded by a salesperson from a well-known car dealership company. The perpetrator committed fraud by requesting the victim to transfer the car booking fee money to his personal bank account. The victim was not apprehensive with the request since the individual looked legitimate by wearing a uniform and a corporate ID card while presenting a company name card. Following the transfer of funds, the perpetrator issued a vehicle order letter (SPK) and bogus receipts to the prospective client.
The company explained on social media that the person was on the job training. After that, the company compensated the victim and vowed to strengthen recruiting procedures.
However, the monetary compensation was insignificant in comparison to the risk of reputational damage. Unfortunately, this fraud case is just the tip of the iceberg; cases like these happen quite often to organizations with various backgrounds.
Screening safeguards reputation
The first step of a company’s investment is recruitment. There is a risk of loss with every investment. As in the preceding example, bad hiring decisions pose not just financial risks, but also reputational risks. These occurrences may be avoided by performing background checks on potential employees.
The information provided on candidate’s CVs do not always correspond to what is presented in real life. According to some research, more than half of the workers surveyed had ‘beautified’ their résumés. Companies must thus exercise caution by verifying every fact on the candidate’s CV, including identification cards, degrees, job experience, and so forth.
Following an inquiry by the authorities, it was discovered that the perpetrator of the fraud case had a criminal record. This occurrence may have been avoided if the candidate’s criminal records were verified during the hiring process. Even for certain companies and positions, pre-employment screening includes Politically Exposed Persons check, drug testing and credit check.
For more than two decades, our customers from various business backgrounds have trusted Integrity Asia to perform employment background screening and deliver detailed analytical results. By having all the facts at your disposal, your company will be more well-prepared in making hiring decisions and ensuring that your company is less susceptible to potential fraud risk. Contact us now for more information on employment background screening and other compliance services.