Do you really need rescreening employees?

Written by
RMI Team (F)

Rescreening Employees ━ The role of an HR leader is far from easy and yet the principles seem surprisingly simple, get the right people into the right job. But we all know it’s much harder than it seems. If you’ve followed our blog you would have discovered CV fraud is on the rise, the importance of putting the human back in hiring, and the critical nature of background screening checksIn fact, we are pleased to see there has been a notable increase in the level of awareness of the importance of pre-employment background screeningOur blogs have also given more insight into the real cost of a bad hire and provided ways to identify signs that you’ve hired the wrong fitUnfortunately, the job doesn’t stop there. 

 The concept of rescreening employees, otherwise known as post-employment background screening, is severely lacking. Research from various reputable fraud associations indicates a refresher is critical. There’s barely an industry today that isn’t grappling with this issue. Companies are trying to balance privacy concerns and the need to support and trust good talent, with mounting pressure to avoid hiring employing workers who might steal, harass or even commit violent acts in the workplace. It’s not easy, but some of these high-profile incidents may get your management into gear to take action: 

  • Only last month, a private bank Pictet, in Finland, was dragged into the limelight after it discovered an employee siphoned millions. The employee was Head of Banking Operations and was employed for nearly 20-years until the alleged scam surfaced.  
  • Two months ago another situation unfolded closer to home in Singapore where a whistle-blower shed light on two Senior Finance Executives of Wirecard Asia, who were alleged to “cook the books.” 
  • Last year, in Singapore, a former UOB employee was jailed for committing a criminal breach of trust and conducting regulated activities without a license. The employee worked with UOB for almost 5-years and misappropriated about S$520,000 from money entrusted to him by clients.  
  • In yet another case, two former employees of SPRING Singapore were convicted in 2017 of cheating the statutory board of S$50,000 and another almost successful payout of S$145,000. The employee had been with the company for four years, he even assisted in investigations into potentially false claims during his tenure. 

The inconvenient truth is, existing employees are the greatest perpetrators of corporate fraud and yet an employee with multiple years of work experience is rarely, if ever, checked out as a potential security risk. It doesn’t make much sense to not invest in rescreening employees, especially when they can sometimes be up to 50% quicker and cheaper compared to initial pre-employment screening since some areas don’t need to be run again.   

So arm yourself with these figures next time you attend a Board Meeting, and someone asks, ‘is this cost, time, effort of rescreening employees really worth it?’   

  • In an article by Singapore Straits Times, it’s reported that more than a quarter of companies in Singapore have experienced fraud over the past two years – and employees are the main culprits.  
  • Findings from a Fraud Survey Report by KPMG-SMU shows an alarming 29% of organisations are reporting incidents, up from 22% in 2011 – a massive red flag. 
  • The same KPMG-SMU survey found 58% of fraudulent activity was committed by staff, and 17% by Board Members and Senior Management officers. 

The reality is, people, change. Although an employee may have a clean background check when hired, anything can happen over the coming years. Hence, rescreening employees allows your company to quantify the risk to which you are exposed, and then manage that risk. 

Interestingly, a 2002 report by KPMG showed that in 21 per cent of cases where existing employees were involved in fraud, their lifestyles changed to a point where it was noticeable, but the signs were ignored 

Here’s what you can look out for before rescreening employees take place: 

  • Research shows 7 out of 10 people who have drug and alcohol addictions are employed, this is an expensive addiction to manage and could raise the possibility of them committing some type of fraud
  • Many people also fall victim to dire financial situations. Sinking mortgages, high credit card debt and spouses losing jobs create desperate situations that can tempt even the best employees.  
  • New businesses registered since employees were first employed, or any arising trouble with law enforcement may also be a conflict of interest resulting in various risks  
  • Nowadays, something as simple as social media checks is also relevant to ensure that the employee is not spreading any reputational damage or sharing confidential information publicly.  

Companies are split when it comes to how often you should screen current personnel: it could be every-5-years, an annual policy, a bi-annual policy, or a continuous real-time monitoring policy. At RMI, our employees go through an annual screening practice to ensure everyone remains fit and proper to perform their duties. In any case, employees should know that what they do after they get hired is going to matter just as much as what they do before they get hired. 

To address the very real risk of fraud from existing employees, the mandate for rescreening employees must be set from the top. An organisation’s board of directors plays a critical role in the prevention and deterrence of fraudulent activity.  When employees become aware of the company policy for rescreening employees, there is a strong likelihood that they become vigilant of the risk they expose themselves to and thus rescreening employees as one of your HR strategy has a deterrent effect