Monday, April 6, 2009

Five Steps to Avoid Hiring a Thief

Here are five steps you can take that will significantly reduce the chances of hiring someone who would steal from your company if given the opportunity.


Step 1.) Awareness is Key
You'll not be able to effectively address employee theft if you do not first recognize it as a serious problem worthy of your time, energy, and attention. When you begin the selection process (sorting rèsumès, interviewing candidates, etc.) theft risk should be among the critical criteria for selection.  Some positions have greater sensitivity to theft risk than others.  Most retail positions, all positions involving cash, most positions involving handling small items of appreciable value are all excellent examples of positions that should all have an extremely low threshold for theft risk.

Step 2.) Validate Education, Previous Employment, and Professional Credentials
This step is not immediately obvious but is very important. One might be tempted to ask what value validating someones education has on determining whether the candidate would steal from the company once hired. The answer is that the candidate is making a declaration about their trustworthiness when they submit a rèsumè.
If the candidate claims to have attended a certain college or trade school and received a diploma or degree, verify that they did in fact attend and obtain. Any candidate that knowingly misrepresents themself on the rèsumè is declaring themself to be untrustworthy. Do not hire this candidate. Skills and experience aside, this candidate is likely to be much more trouble than they are worth. Don't make the mistake of hiring on the basis of skills/experience alone. There are many other factors that will indicate whether a candidate will be a good employee. I am not suggesting that skills/experience are not important (they are essential), rather that they are not the only relevant criteria.

Step 3.) Review Credit Report
A credit report can provide meaningful insight into the theft risk of a candidate. Sadly, and all too often, the determination of whether or not an employee will steal from their employer boils down to essentially two things: motivation and opportunity. Their employment with your company will provide the opportunity (the company's goods, services, intellectual property, supplies, etc) for theft. Employees must have access to these items in order to perform their job functions so there are limits in what might be achieved in the arena of opportunity. Hiring warehouse clerks, cashiers, delivery drivers, and every other position that puts an employee in close contact with an asset of value creates inherent risk.

Motivation, on the other hand, is something that we can more effectively address. Whether an individual feels motivated to steal from your company profoundly affects whether or not they actually will steal from the company. A credit report can be very revealing as to the motivation of an individual. Some people steal just for the fun (thrill associated with risk of getting caught) of it, others do it as a way to get back at an employer or supervisor they feel has held them back from achieving an important goal. Many, however, steal because they need the extra income to pay their bills and live the lifestyle they want.
Look at how much the candidate would earn in the position compared to how much money they need just to keep up with their bills.  Also look for recent or chronic late payments or partial payments as they are also a good sign of financial distress.  That distress can be a powerful motivating force when deciding to steal from an employer.

Step 4.) Review Criminal History
This an obvious step but there are many different types of criminal histories out there.  Make sure that you know what you are getting (or not getting).  I recommend a criminal history report that includes:
  • Search of online databases (FBI most-wanted, terrorist watch list, sex offender, etc)
  • Address history (list of addresses associated with the candidate)
  • Conduct in-courthouse searches of the county courts in the counties where the candidate has lived

Don't fall victim to "free" criminal histories sometimes bundled with a credit report.  Likewise don't be fooled by a so called "nation-wide" or "federal" online search.  The quality of these reports is close to zero, stay away from them as they very often under-report the true criminal history of the individual.    Understand the not all states have online criminal convictions databases that can be used in an online search, and even fewer counties have there case information in an online database.  Most of the crime will be in a county court, next most frequent are the state courts, and least frequent is the federal court system.  Be sure the search you conduct covers where the crimes would be found.

Step 5.) Discover Attitude and Past Behavior
This last step, and arguably best step, is to have the candidate complete a behavioral survey which targets theft as one of its target behaviors.  Behavioral surveys are most insightful because they deal with the candidates attitudes and recent past actions (typically past 90 days or less) surrounding the target behavior.

The behavioral survey is a questionnaire in which the questions (designed by an industrial/organizational psychologist) probe a participants attitude (asking whether they agree, strongly agree, disagree, strongly disagree, neither agree nor disagree) on a particular subject as well as ask questions about their recent past behavior.

Candidates often disclose information about themselves on these specially designed surveys that would not be disclosed in an interview or in another setting.  That makes these surveys particularly valuable.  For example, if the candidate is a long time casual shoplifter (only occasionally shoplifts but no convictions and thus no criminal record) were to disclose their habit on the survey, a prospective employer (particularly retailers or other employers with valuable and salable goods) would likely find that very interesting and important in assessing the candidates theft risk.


Well, there they are; the five steps.  They're easy to remember and easy to execute.  What I like about them is that they are some of the most comprehensive things you can do to protect your company (short of requiring government security clearance) from the risk of employee theft.

Some might argue that these steps are very expensive.  To that I would counter that, while there is a cost when compared to the cost of employee theft, this is a bargain.

Some have argued that the process they now have of finding, selecting, and onboarding a candidate/employee is already a long and arduous process, and they don't want to lengthen it.  For these folks, they have not learned a simple lesson my father taught me when I was a teen; which is if you don't have enough time to do it right the first time, you must have enough time to do it again.  That's what happens when the hiring manager discovers what the true nature of the employee is and has to go through the termination process as well as a second pass through the hiring process.  It's not terribly efficient.

Follow these five steps and they will serve you well.


Greg Overgard said...

Excellent topic!

I read this post with enthusiasm. This is something I have been trying to get going at our company for the past year. Unfortunately, our budgets have been trimed to remove all of the fat, half of the muscle, and we are now trimming the bone as well. Not really, but you get the point.

I've watched a couple of people that I had questions about go through the hiring process and get rejected at the final stage (fortunuately we did not hire them). But we might have avoided taking them that far if we had done the kind of background screening you have proposed. As you said, not terribly efficient.

Thanks for the excellent post. I'll be sharing with our SVP of HR.

RazRobinette said...

Great post. I too enjoyed reading through your suggestions.

I heartily agree that the more homework we as recruiters to on the front end of the hiring process, the less time and effort gets wasted on back end with candidates who should never have moved forward in the process.

As a professional recruiter, I am responsible not only for filling the position with a candidate, but importantly to fill it with a candidate whose skills, experience, talents, and abilities will allow them to be successful and fulfill the needs of my employer.

My employer believes this as well. So much so that my professional scorecard not only tracks the number of positions filled and the time to fill them but also tracks the candidates placed and how they performed after 30, 90, and 180 days. Their successes were shared successes and their failures were shared failures. I mean to say that I am rewarded for placing successful candidates and I also feel the pain (in my compensation) when a placement doesn't go well.

Tying bonuses to the success of a placement has really had a profound effect on the attitude of all of the recruiters and really changed (for the better I think) the rigor we use in the vetting process of our candidates.

Theo884 said...

Aren't Dads wonderful? "If you don't have enough time to do it right the first time, you must have enough time to do it again".

JDean33 said...

That's actually very interesting. The first four steps are pretty straightforward and something that we do as a regular part of our process.

The fifth (Behavior Screening) is new and different. I'm curious to know how effective it is.