Getting the Best Employees for Your Business

During my careers as both an FBI Agent and a Certified Fraud Examiner/Private Investigator, I’ve seen time and time again businesses and individuals lose money because someone they trusted stole from them.  The losses can run from the thousands up to multi-millions of dollars.  According to the Association of Certified Fraud Examiners (ACFE), on average small businesses lose 5% of their revenue to employee fraud each year.

Thousands of businesses are robbed by people who were entrusted to help the business grow and prosper.  Trust is a good thing.  Everybody’s personal and business life depends on the trust we’re given and the trust we’re willing to give out.  Unfortunately, there is an element of the world that takes advantage of peoples’ trusting nature.  The majority of people who have stolen from their employer or business partner has blamed the victim for trusting them and making it too easy for them to steal.  This undeserved trust often begins with the hiring process.

THE PROBLEM – People Lie on their Resumes.

Shocker!  Probably every hiring manager and small business owner has come across resumes where certain qualifications or experiences have been fudged.  Call it creative writing; call it historical editing; call it whatever you want.  People, knowing they are competing against potentially dozens of people for a single job, will typically take small liberties with the truth.   Most of us know that if a job candidate lists a reference, then that person is only going to say glowing things about the potential employee.  That’s why a lot of businesses don’t even bother to check references, and I don’t blame them.

The typical resume bolstering and fluff aren’t what I’m talking about.  Too often people will outright lie about the education, past work experiences, licenses, training, and qualifications.  The decision maker may get caught up in a candidate’s supposed qualifications and what they might bring to the company rather than verifying if the person really has those qualifications.

I had a corporate client bring me in because they suspected one of their executives was abusing the corporate credit card.  Our investigation determined he had spent more than $30,000 on the corporate credit card for personal expenses in a three-month period.  To explain away the very few charges that the company questioned, the executive created fake invoices and receipts to cover his fraud.

During our investigation, we conducted a background investigation of the executive.  We discovered that not only was he a three-time convicted felon and currently on probation, but he had been sentenced to prison for each one of those convictions.  One term of imprisonment was for over two years.  Each of those convictions was for fraud.  All of these convictions were prior to my client hiring this person.

What devious and elusive way did the executive hide his convictions (as well as several civil judgments) in order to dupe my client into hiring him?  He lied on his resume.  That’s it.  He not only failed to disclose his convictions, but he also hid his prison terms either at the beginning or the end of a previously claimed job position he held.

His resume looked great, and apparently, my client fell in love with his claimed qualifications and previous employment.  All my client could see was what a great asset this person was going to be for the company.  They didn’t bother to verify a single item on his resume, run a background check or even Google his name.

Of course, when they discovered the fraud, my client fired the executive.  I don’t know if they pressed charges or even reported it to his probation officer.  A few months after the investigation, I was looking at resumes on Indeed for another client.  I ran across the updated resume of the fired fraudulent executive.  Guess what?  Not only did it not list his convictions or his prison terms, but it also didn’t list the almost three years he spent employed with my client.   He just claimed that he worked for another company during that time.

THE SOLUTION – Proper Due Diligence

There is one simple thing the client could have done to protect themselves, and it is the same thing any business owner or hiring manager can do.  Spend the money up front to conduct a background investigation on your top candidates for the position you’re looking to fill.  That’s it.  Pure and simple.

The resume is the starting point, along with basic identifying information, in order to conduct a background investigation.  There are plenty of online or budget background services that can fill the bill some of the time.  None of them go as deep or as thorough as background investigation conducted by a licensed investigator.   A good investigator will also make sure the background check is compliant with the Fair Credit Reporting Act (FCRA).

The licensed investigator will use proprietary databases as a starting point to identify red flags regarding the candidate.  That is where most online and budget services end.  The licensed investigator will get the details of alleged criminal and civil activity.  They will verify past employment, education, licenses, and professional associations.  The licensed investigator will actually talk to people who know the candidate, not just their listed references.  The licensed investigator will conduct a social media investigation of the candidate and his family to make sure they won’t bring embarrassment or scrutiny to your business.  The licensed investigator can go as far and wide as you want in the background investigation.

But how much does that cost?  It sounds expensive.  A background check can run from just a few hundred of dollars to thousands of dollars, but the client controls how in depth of a check they want.

If my client had done even a low-level background check on the fired executive, they would have had all the information they needed to decide if they wanted a person like him at their company.  They probably could have found the information they needed from a licensed investigator for under $1,000.  But even if they had to spend $2,000 on a more in-depth investigation, its plain to see that amount pales in comparison with the known loss of $30,000 the executive stole from them.  It also pales to the amount they paid me to come in and investigate the theft after the fact.

We love our businesses.  We want them to thrive and be successful.  Let us help you achieve success.  Conducting due diligence on your employees is an investment to make sure your business continues to thrive and be successful.  Don’t skimp on the front end.  Remember, pay a little now or pay a lot later.