Recession? What recession? It's certainly boom time for the two main species of recruitment fraudsters.
The recession has made agencies more vulnerable, permanent placements and temp billings have declined for nine and five consecutive months respectively. Unless they're exclusively focused on the few remaining buoyant sectors, such as medical care, many recruitment consultants are frantically trying to secure scarce vacancies. Even the most professional consultants are easier targets for determined fraudsters during a recession.
It's difficult not to be tempted to take on a vacancy and fill it quickly to secure what could be a job-saving commission without proper screening of the client and candidate alike; and with compliance and security measures facing the same resource pressures, it's harder still to check who we're dealing with.
Fraudsters quickly find out who are the easiest victims and return in greater numbers. Indeed, KPMG's Fraud Triangle tells us that fraudsters look for a lack of controls. Worse still, when agencies are not properly checking applicants' ID documents, do we even know who are getting the jobs? I'm especially worried about some of the large-scale projects such as the 2012 Olympic Games and other employers of large workforces.
Tenacious consultants won't fare better just by working harder to secure and fill vacancies. They're unwittingly exposing their agencies and clients to additional risk. A single act of fraud can wipe out a business as surely as a drop off in business, but far quicker.
Managing this risk is, thankfully, far cheaper than the cost of recruitment. It's certainly cheaper than losses that, as in the fraud perpetrated against agencies by the so-called 'Lying Dutchman', can easily top £100,000. As an agency, or indeed any employer, I'd always ask two key questions: firstly, who are we dealing with, be they client or candidate and secondly who should check who we're dealing with?
Simply looking up new clients on a reliable register, such as Companies House, and corroborating addresses and credit histories with the credit reference agencies will go a long way to screening out bogus employers.
Even better is to visit the client's office, contact their associates and search for their company or director names alongside terms like 'fraud', or 'scam' on Google. In the time it takes to issue a new client's first invoice and chase payment, an agency could have made several weekly payments to temps before realising a loss. And, because it's so easy to repeat this across numerous branches and other agencies concurrently, it's vital to forewarn others.
Screening employees has to start with checking ID. Although statutory (and usually contractual) compliance might only suggest the most basic 'reasonable steps' to checking ID, clearly any agency supplying staff into sensitive work, especially where they're relying on a candidate's ID to check a criminal record disclosure, needs to go further. Failure to properly check an ID document renders any further check of, for example, criminal records and employment history less than worthless.
Many employers grapple with the debate about who should undertake background screening.
Paying the same person to recruit and to screen a candidate introduces an intolerable conflict of interest unless they're rigorously monitored by a sufficient number of proficient compliance officers.
But screening and even auditing by non-fee earning staff obviously adds cost.
Agencies should certainly be itemising these costs to highlight screening activities on their clients' invoices. After all, employers such as those responsible for building and delivering the Olympic Games would otherwise be checking their own direct hires… wouldn't they? Major staffing companies often have the ability to undertake more reliable staff and temp screening than many direct recruiters and background screening is one area of differentiation during the recession.
The best staffing businesses are already beginning to offer comprehensive, reliable and quick background screening services either based on their in-house capabilities with advice from screening experts or, more likely, on behalf of professional background screening companies.
When someone loses their job through redundancy they're particularly vulnerable to scams, even more so if they're trying to maintain mortgage or rent payments, or servicing other loans.
Sadly, fraudsters know how desperate this job seeker is to find work and they also know that their former employer may have made a redundancy payment directly into the redundant employee's bank account.
It might seem obvious, but even the most astute can succumb to tempting employment offers during times of distress, that they'd otherwise consign to the too-good-to-be-true spam box.
The same rule applies to employers as to employees:
know who you're dealing with; candidates need to be more selective in choosing with whom to share their personal information, including bank details, even if the reason
sounds rational, for example to set up a payroll account.