Background checks provide means to combat employee theft

Dec 1, 2000 12:00 PM, ACCESS CONTROL & SECURITY SYSTEMS INTEGRATION STAFF

           

Security departments across the country have their hands full. Not only do they have to combat breaches of security from non-employees, but also they have to fight security breaches from within.

Employee thefts account for more than half of the financial losses incurred by companies. According to the U.S. Chamber of Commerce, 30 percent of business failures result from employee theft with more than $120 billion lost annually to American companies.

Richard Gibbins, senior vice president of Swailes & Co., a Houston-based investigative and security consulting business, says more companies than ever are being targeted by their employees. Several factors have helped contribute to the criminal element, including a climate of mergers and acquisitions and cost-cutting that has caused workforce reductions and layoffs; a low unemployment rate which has narrowed the pool of qualified applicants; and lack of theft prevention policies, procedures, and education at many companies.

Swailes & Co. recommends that businesses take a proactive approach to combat employee theft. The use of pre-employment background checks can help winnow out potential trouble employees. According to Swailes & Co., recent industry surveys have found that companies that perform background checks on possible hires commonly discover applicants who lie about their background, educational history, prior work experience, and hide criminal records. Companies have also discovered individuals who give false names, misstate driving records, and misuse Social Security numbers.

Background checks can also help prevent hiring someone with a criminal record or someone who has a history of committing physical or verbal abuse. The courts have begun to hold more and more companies liable for incidents that happen in the workplace due to negligent hiring practices.

Liability for negligent hiring is based on the notion that if an employer hires an employee with a history of presenting danger to customers or other employees, the employer should bear the loss caused by its unfit employee.

Pre-employment background checks can cost between $25 and $75 for low-level potential hires. More extensive checks on higher-level hires can be more expensive.

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