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Business & Employee Background Checks – Know Your Partners, Employees & Vendors.

fingerprints

If you run a business, you have lots of worries.  Aside from the normal concerns like competition, pricing, R&D/marketing, location and customer service,  security issues  have become increasingly important.   Instinct can only take a business owner so far in assessing the work relationships in which he becomes involved.   A businessperson can run up against:

  • Employees with compromised criminal/civil litigation histories
  • Prospective partners who are less than truthful about their business (and related personal – divorce, child support, etc.) histories
  • Theft
  • Fraud
  • Embezzlement
  • Scams
  • Unscrupulous suppliers/subcontractors

In looking at the statistics of employee theft alone:

“In a recent [2014] survey of small businesses, a University of Cincinnati criminal justice researcher has found that only 16 percent of those that have experienced theft by employees actually reported that theft to the police.

That’s even though 64 percent of the small businesses surveyed reported experiencing employee theft.”

Increasingly, security tech companies pitch IT monitoring systems and control to business owners as the most effective means of controlling today’s work environment as it relates to corporate crime.  Now let’s look at the reality:

detection

The vast majority of business thefts, embezzlements and frauds are uncovered by tips, audits and by accident. Accepting these statistics as fact borne over time, what does the employer do proactively and reactively with workplace crimes?

Employee Background Checks Provide the Answer

Certainly there are many free online tools of which prospective employers can avail themselves to research their employees backgrounds, but such a search should just be a cursory check, pre-hire. Working with an experienced investigator will yield formerly-hidden information as the professional background checker knows what to look for and where to look for it  – often in databases that are not easily available to the general public and through a process of key data analysis that can only be borne of experience, inclination and talent.

Here are the types of things a business owner can and should be looking into for the protection of his business:

Criminal Background Checks

Any time your business is dealing with someone you don’t know, you should run a quick check to see if they have any history of criminal activity. It’s very simple to find out about criminal records, FBI records, prison records and sex offender status.  There is access to their entire criminal history if there is one. With violence in the workplace such a major issue, a simple criminal check can be a very effective way to avoid problems before they happen.

Background Check for Employment (Pre-Employment Screening)

If you’ve got a small business, you should be pre-screening each person you consider hiring. No matter how professional, or how harmless, they appear.

A small print shop franchise in Florida hired an especially friendly fellow as their bookkeeper after the owner got too busy to handle it himself. The new employee didn’t offer much in the way of references but he sounded like he knew what he was doing and – big plus – he agreed to work cheap. The owner figured he would save money hiring the guy. He figured wrong.

The bookkeeper drained more than a hundred thousand dollars out of the company before they found him out. Turned out he’d previously been charged with embezzlement.  This is something a criminal background check would have quickly turned up. (Tip: Your investigator should know the positions sought by would-be new hires.  If a crime is directly related to the employee’s duties, [e.g., previous theft charges/accounts payable job], that history would certainly be a direct factor in the hiring decision.)

Background Check Existing Employees – Make it a Condition of Employment

You shouldn’t check only new hires. Over time, employees can develop habits and get involved in activities you’d never suspect. So you should regularly check on existing employees. Note: this is something you should get legal advice for – but generally if it’s a condition of employment and you let them know in writing, it’s not invading privacy. You entrust employees with company funds or materials that can be stolen, or negotiating and purchasing power that can be abused. Keeping an eye on existing employees is just being prudent.

Run a Background Check on Each Company or Individual You Do Business With

You should investigate every supplier or contractor who serves your business. If the possibility of harm exists, then you need to know if someone you’re in business with is likely to harm you. You can check credit, check backgrounds of the owners and managers, check the company itself for any past criminal or questionable activity.

Run a Background Check on Each Partner With Which You Intend Do Business.

Here at BNI we’ve worked with numerous matters involving prospective and current business partners.  Our clients come to a realization during our investigations that either the partner is upstanding or s/he is seeking a working relationship that is covertly dishonest due to personal and professional issues, (i.e., expensive divorces, costly child support litigation, past debt, etc.)  Especially those who are very close to your business  – your means of support –  should be thoroughly vetted and, moreso after the partnership is active and red flags begin to appear.  Our intent and focus during partnership investigations are on collecting information that can be used in potential criminal and civil litigation.

I’m not relating anything in this post that you, as the business owner, have not already considered or experienced but I’ll add the important point that with today’s tech tools, conducting this type of business due diligence is cost-effective and results-effective and is easily set up on an as-needed scheduling basis.

Given the increasing transiency and mobility of our work relationships, it is smart to proactively protect your business, rather than the latter, often very expensive clean-up required in the aftermath of personnel failure.

BNI Operatives: Situationally aware.

As always, be safe.

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