The Role of Due Diligence in Hiring and Vendor Selection
Every decision carries a potential consequence. This statement is true even for organizations, and they have to be cautious in every process that constitutes operations. In today’s dynamic business landscape, digital technology is advancing, and businesses must take care of the risk inherent to hiring and vendor selection. To embrace diversity, enterprises are appreciating the role of cultural amalgamation, attracting people of different characters, skills and qualifications. This is where due diligence acts as a shield against unforeseen risks.
Risk management is elemental for organizations that want to progress in the evolving market environment. As such, the best way to lessen risks is to start from the bottom- understanding the nature of employees and vendors before they become part of your organization. We unveil the power of due diligence and why a human resource director should embrace it.
Understanding Due Diligence
Due diligence involves in-depth research and investigation, usually conducted by an organization, before agreeing with an employee or vendor. This is the most crucial stage for every organization, as it determines the efficiency of the contract entered into. This process is detailed and entails gathering information, analyzing the data, interpreting it, and verifying the information presented. As lengthy as it may appear, this is a very instrumental chain, as it guides informed decision-making, mitigating the risks. By conducting due diligence, parties’ interests and any problem that can be experienced in the future are protected.
The Imperative of Due Diligence in Hiring
Why, then, is it essential to conduct due diligence in hiring? Statistics reveal that bad hires are a cost for any business. Society for Human Resource Management (SHRM) noted that bad hires constitute about five times the position’s annual salary. This is mind-blowing to any human resource director tasked with ensuring the workforce is skilled enough to benefit the company. Through due diligence, it would be easier to mitigate the risk of bad hires. This cost is incurred in recruitment, training, lost productivity, and legal fees.
Also, conducting due diligence in hiring ensures regulatory compliance. It is equally a requirement for human resource directors to ensure that they comply with the employment local laws, regulations, and standards when hiring. We are in an era marked with stringent local rules regarding the employment process, and due diligence has become mandatory. Failing to understand the actual qualifications and credentials of the candidate can expose the company to legal battles and tarnish its reputation. For instance, hiring a candidate with a history of fraud or ethical delinquency in highly regulated industries such as finance and health care attracts fines or license revocation. Lauth’s investigative team can unearth the questionable background of your new hires to cut on this cost.
Leveraging Due Diligence in Vendor Selection
Vendor services involve entrusting part of the business operations to an external entity, making the organization prone to fraud. One essential purpose of due diligence is to safeguard against these fraudulent activities. With a proper background check, an organization can avoid getting into the loop of deceptive vendors, which can compromise the supply chain’s integrity, and thus losing customer trust. A case in point is the Enron Scandal, where the failure of the company to conduct due diligence resulted in huge financial loss. Association with the fraudulent vendor contributed to financial loss and triggered corporate governance reforms globally. A simple step of ensuring you know your vendor can save your organization from such.
The primary duty of a vendor is to support an organization in running smoothly and ensuring efficiency. Due diligence evaluates the vendor’s financial stability and capability to take that role. We live when global economies are uncertain and market fluctuations are evident. Due diligence, therefore, gives an overview of the vendor’s financial health, risk exposure, and solvency to reduce the risk of disrupting the supply chain management.
Best Practices for Effective Due Diligence
Embracing technology is the best way to remain ahead regarding due diligence and get the desired results. It is elemental for your organization to invest in modern technologies, such as the use of artificial intelligence and data analytics, to uncover facts that manual operation cannot. Also, this should be coupled with collaboration and information sharing. Collaborating with peer industries, regulatory bodies, and professional bodies can allow access to databases to learn more about the candidates. One such valuable entity is Lauth, and we pride ourselves on using verified databases to secure a comprehensive background report on the relevant Subjects in the case.
That said, due diligence is not a one-time thing. An organization should implement systems for continuous monitoring. This is because information is not static, and the vendor’s details might change along the way. Thus, it is essential to keep track of records to adapt to evolving risks.
Conclusion
Risk prowls at every corner, and the beacon of assurance that organizations can rely upon is conducting due diligence. Whether during the hiring process or selecting a vendor, due diligence remains the pillar of hope, safeguarding the organization’s reputation and interest. Embracing these due diligence principles and integrating them into decision-making gives an organization the resilience and confidence to navigate turbulent waters. Don’t stress; our investigators have the necessary tool chest to conduct objective, covert undercover operations to unearth misconduct among the hires and vendors.
Safeguarding Your Workplace: Strategies to Prevent Theft and Fraud.
In today’s hyperconnected world, safeguarding your business from pervasive workplace theft and fraud is inevitable, and demands a multifaceted approach. Enterprises are increasingly grappling with the metamorphosis of criminal tactics and the advancement of technology. These trends are a danger to any surviving business and require well-thought-out approaches to mitigate losses. According to the Association of Certified Fraud Examiners (ACFE), organizations lose about 5% of their total revenue through fraud, which amounts to trillion dollars annually. This loss goes beyond financial, to damage of trust by customers, dented reputation, and legal ramifications.
To ensure your workplace is protected from these threats, it is paramount to institute solid strategies that address vulnerabilities across the business- policies, employee awareness, organization culture, and policies. Let’s delve into methods that you can employ to prevent theft and fraud in your industry.
Establishing a Culture of Integrity
It is essential to understand that a business is as good as its employees. This means that if the workforce is morally corrupted, this is reflected in your business, and the chances of making losses are high. Cultivating a culture of integrity is the foundation of dealing with fraud, and this has been supported by past research showing that institutions with high integrity culture experience less fraud. Does this resonate with you? Well, let’s look at the case of Wells Fargo, a financial institution embroiled in a scandal of fraudulent account openings. Due to the aggressive sales culture of the company, it incentivized employees to achieve unrealistic targets. This misconduct of wanting to achieve short-term gains damaged the company’s reputation.
A simple act of failing to act ethically can ruin your years of investment, a pitfall that businesses should avoid. This can happen by supporting workforce accountability, transparency, and honesty. As a human resource director, you are responsible for encouraging an open form of communication where employees can report any theft or fraudulent activities without fear. For you to effectively implement these, it is essential that you understand the nature of your corporate culture, and Lauth has seasoned experts in conducting corporate culture audits. We will ensure that the findings of the audit capture the weaknesses and provide workable recommendations.
Conducting Thorough Background Checks
“Trust but verify.” This adage should prevail when hiring new employees. Conducting a thorough background check is vital in identifying the red flags and mitigating the risk. The data released by the Society for Human Resource Management (SHRM) alludes that about one-third of job applicants provide false information on their resumes. This should scare you as a human resource director. Consider the Enron Energy Company case, deemed one of the heinous accounting frauds in history that led to its demise. If the company had conducted proper background checks on the executive, they might have uncovered the unethical behavior.
The rule of thumb is a background check is essential to prevent internal fraud and theft, which could potentially cripple your business. Most human resource directors need to pay more attention to this stage, as it is perceived to waste time. It’s understandable, but we must find a way to dispel the fact that such a process can be outsourced. Our private investigators are experienced in conducting comprehensive background checks and providing objective details that would save your company in the future.
Implementing Stringent Access Controls
We must uphold the importance of securing business’s information and critical data. Insider threats account for a high percentage of fraud incidents, emphasizing the significance of having strong access control. To avoid data breaches, it is imperative to implement pin codes, biometric scanners, and keycards since they are important tools for identifying and monitoring the activities of employees within the place of work.
Are all these stringent measures effective? The answer to this question might differ depending on whether your business has experienced a case of fraud or theft. However, it has been proven that establishing access control at the cash office prevents theft. This is because all log trails are left behind, and any theft can be traced to a specific employee. You need to know the source to mitigate. That’s why the fraud investigation service is elemental for your company.
Implementing Surveillance and Monitoring Systems
Deploying surveillance cameras and monitoring systems could be a step towards mitigating theft and fraud in the workplace. While it might intimidate the workers, it is a security awareness strategy. The study conducted by the University of North Carolina showed that cameras reduce theft and fraud by 51%. For example, in the retail sector, video analytics software can detect activities such as shoplifting and provide real-time information to security personnel to act. Now that our most excellent tool at Lauth is risk assessment, we can offer guidelines on where you could be missing regarding surveillance and monitoring. Secure your investment!
Conclusion
Safeguarding your business against theft and fraud needs a comprehensive approach, requiring you to examine your organization’s culture, existing policies, available technology, and employees’ awareness. Organizations can curb theft and fraud by implementing a culture of integrity, conducting background checks, implementing access control, and ensuring surveillance and monitoring systems. These protect your reputation and assets and uphold the culture of accountability. Lauth’s investigative services chip in to supplement your organization’s operational safety.
Workplace investigationsshould be conducted periodically to ensure that crimes are not going unnoticed within organizations. A thorough workplace investigation can help uncover many types of crimes, from harassment, discrimination, and forgery to theft. A workplace investigation is a process through which an organization uncovers and discovers facts about complaints related to misconduct, violence, harassment, theft, and other issues. Although the procedures and policies for workplace investigations vary from one organization to another, there are certain standard practices.
1.Ensure confidentiality during investigations.
You and your human resource team conducting workplace investigations must ensure the complete confidentiality of all the parties involved, including the complainant, suspect, and witnesses. When you assure these people that you won’t be sharing their side of the story with anyone except when necessary, they will be encouraged to reveal all they know about the case without fearing retribution or being judged. And, of course, this will be the perfect opportunity for you and your investigators to get the right story and evidence needed to make a final decision.
2.Review documentation
As an employer, you and your HR investigators will make a huge mistake in corporate investigations if you rely strictly on stories the parties involved recount. While it is a good idea to grant interviews to all involved to hear their sides of the story, it will be irrational of you to focus on just their words. Instead, you need to review all documented evidence, such as recordings, messages, pictures, or emails, for clarity.
3.Get an experienced investigator.
For a workplace investigation to be effective, you must work with an experienced investigator with a vast understanding of all the applicable laws associated with an internal inquiry. It’s up to you to choose an internal or private investigator for corporate investigations to help with the case. Whatever you decide, your goal should be to get someone who will use his comprehensive knowledge of laws and regulations to conduct thorough investigations while avoiding possible legal complications along the way. Rest assured that with an expert investigator on your team, you will be more confident in resolving the issue efficiently while adhering to your organization’s protocols and cultures.
There are, however, several ways through which you and your investigation team can determine if your employees have committed previous crimes;
1.Conduct interviews
During a workplace investigation, it is possible to discover the past criminal records of your employees through information obtained from interviews. This is why conducting as many interviews as possible with as many witnesses as possible, or people you believe can give you more details on the issue is crucial. Of course, you must ask follow-up questions during interviews to get more background information about the employees involved. However, remember to schedule interviews at the right times to maintain the day-to-day activities of your employees. In addition, ensure that all interviews are conducted privately, without bias.
2.Investigate previous criminal history.
It would also help if you and the investigation team investigated the previous criminal history of the suspect. To successfully do this, you must understand and familiarize yourself with the applicable laws of your state. Some of the best ways of carrying out previous investigations on criminal history involve searching online public records or requesting background information through court clerks. Nevertheless, to be safe, it is better to do all criminal checks even before hiring your employees. This will help you avoid recruiting people with criminal histories.
3.Collect the relevant documents.
It is of the utmost importance to collect documents and evidence that can help you point out the wrongdoings of your employees during a corporate investigation. Documents, including emails, text messages, and social media messages, can help you uncover many things. Similarly, pieces of evidence, including footage from security cameras, videos, photos, and other expense reports, can help you uncover other previous criminal activities of your employees. It will help if you collect all such evidence, even if you aren’t sure they will be helpful. You can always pass them to a private investigator who will use them with other materials at hand to create a complete picture of the situation.
Most organizations are increasingly experiencing violations from their employees, and when necessary, a workplace investigation must be conducted. Even though some violations are more severe than others, they can harm the employee and the organization. They can be broadly classified under three major categories;
1. Routine violation
A routine violation occurs when employees break the routines recommended for daily activities. Most employees indulge in routine violations to save energy and time. They often believe that following the designated safety rules will slow them down. Unfortunately, many employees do not know the risks associated with routine violations when it is the leading cause of accidents and injuries in most workplaces.
Situational violation
Most employees indulge in situational violations because of sudden pressures at particular times. The right equipment may sometimes prevent employees from violating safety procedures. For example, in the absence of a scaffold, an employee may use a ladder when working at heights. Some employees indulge in situational violations because their jobs are boring and require repetitive tasks. A poor working environment that is cluttered can also increase the prevalence of situational violations from employees.
3. Exceptional Violation
Exceptional violation often occurs when safety rules are broken to perform a new task or deal with an incidental event, like violations that occur during emergency procedures like explosions and fires. Nevertheless, anger, anxiety, and other emotions can also trigger exceptional violations. Examples of situations of exceptional violation triggered by emotions include sexual harassment, physical violence or threats to violence, spreading false rumors, using obscene language, cyberbullying, and destroying the belongings of a coworker or colleague.
However, as an employer, it is your responsibility to conduct workplace investigations to uncover current or previous acts of violations by employees. There are many ways to conduct employee investigations on violations, but these steps will help you uncover both previous and current cases.
Have a complaint mechanism put in place.
One of the best ways to help uncover violations in your organization during a workplace investigation is to put a complaint mechanism in place. But, you must ensure this mechanism allows employees to give tips anonymously. The truth is that some cases of violation go unnoticed because employees who witnessed them are afraid to come in front and speak. Therefore, you must also sensitize your employees about the existence of such a mechanism and encourage them to send tips on past and current acts of violation they have experienced. By so doing, you would uncover old and recent violation cases.
2. Have corporate awareness of what constitutes violation.
Some employees in organizations are ignorant about some forms of violation. Therefore, it makes sense to include sensitization in your workplace investigation plan as an employer. For example, you could seize the opportunity of an existing case of violation to sensitize your employees about all the forms of violation. This will not only help them identify future instances of violation, but some may also remember all the previous instances that went unreported due to ignorance.
3. Gather evidence and analyze them.
Conducting employee investigations requires you and the investigation team to act promptly by gathering as much evidence as possible through interviews, emails, photos, videos, and records. Gathering these materials is one thing, and analyzing them correctly is another. You and the investigation team must ask follow-up questions to prove or disprove the complainant. In addition, the evidence gathered during the investigations may be a pointer toward previous acts of violation in your organization. If you get enough evidence that points to an earlier act of violation, you should investigate the matter and take the right actions.
4. Communicate effectively during the investigations.
Effective communication is crucial to a workplace investigation of violation. If you can communicate effectively with all the parties involved, you will likely extract valuable information that can be useful in uncovering previous and current acts of violation. However, a pro tip for effective communication is to listen carefully to your interviewees and ask them relevant follow-up questions to get as much information as possible.
5. Provide the complainant with a healthy working environment.
While workplace investigations are ongoing, it would help if you provided the complainant with a healthy working environment. In addition, keeping the complainant safe will encourage him to cooperate with the investigations team for the employees’ overall well-being. Of course, cooperation will include citing past instances of violation and giving suggestions on how to prevent them from recurring.
Every business owner knows the satisfaction that comes with smooth day-to-day operations and how sacred that kind of productivity truly is. But it only takes one individual—whether it’s a threatening employee or someone engaging in other types of serious misconduct—to turn everything upside down. This is why workplace investigations are an essential element to any thriving business model.
As a leader, if the buck stops with you in such a situation, it can be tricky to know what steps to take first. The choices you make in the coming hours and days will define how much disruption the rest of your team will endure and whether the situation is resolved quickly or starts to escalate.
But don’t panic. It’s time to take a deep breath and get practical about remedial action. As seasoned corporate investigators, we support businesses navigating this kind of workplace misconduct every day. So discover here key questions that we encourage you to ask yourself as well as our tips on how to steer the course from here. Plus, if you need extra support, we’re only a phone call away.
Taking Action is Everything
Far too many employers who see an employee threatening someone on their staff or get reports of workplace misconduct bury their heads. They don’t want to deal with the repercussions of taking on someone who might play an essential role, or they are intimidated by the prospect of associated mounting paperwork. But this strategy is highly flawed, because if what’s unfolding before you now should later lead to litigation, your delayed response could be considered negligent, drawing substantial legal costs or fines.
“Is remedial action required, such as calling law enforcement, seeking medical support, or making a dangerous condition safe?”
Instead, any complaint of a threatening employee or other serious misconduct allegation should be taken seriously, documented, and acted upon immediately. You need to think of your position as similar to that of a “first responder”. Your staff—and your customer base if this later gets out—need to see that you have a zero-tolerance policy when it comes to misconduct.
Safeguard Your Team
Unless you witnessed serious misconduct or threatening behavior yourself, you may not know the truth of any allegation just yet. However, there are steps you can take to safeguard your team until the facts come to light. Particularly if you’ve heard reports of an employee threatening, bullying, or harassing one of their colleagues, you’ll want to take steps to make the complainant feel secure.
“Should we suspend the accused individual for the duration of the investigation and does the complainant need further support?”
This may include moving their workstation, changing their working hours, or putting the accused employee on paid administrative leave. The latter becomes more relevant if it may be necessary to ensure the rest of your team also feel safe in the workplace. Taking temporary measures to ensure that all individuals involved are separated or removed from the premises where appropriate will mitigate the possibility of any further threat.
Gather and Preserve Evidence
Evidence gathering is key to all workplace investigations. This includes gathering documented evidence, CCTV footage, digital records, and—perhaps most crucially—complainant, suspect, and witness statements while memories are fresh.
“What evidence do we need to preserve and whose statements do we need to take? If we uncover a possible crime, what is our reporting obligation?”
All investigative steps taken and interviews conducted must be fully documented including times and dates. Be sure to follow practical and legal guidelines, for example informing the witness of the investigator’s identity, that there will be no retaliation or reward for participation, and how their testimony may be used. The individual charged with conducting this process must be impartial—so free from any relationship with the parties involved.
Drawing and Acting Upon Conclusions
When workplace investigations are launched in response to a complaint about a threatening employee or serious workplace misconduct, the diligence and integrity of their totality are what will ensure a solid conclusion. When every step has been taken by the book, the employer can feel confident to pursue disciplinary steps or enact a dismissal, however, it is important to remember that the story doesn’t always end there.
“Do we have a media response prepared if necessary and what are our policies on external communications?”
Particularly when a threatening employee is let go, it is always best to be prepared in case they bring a wrongful dismissal claim against your company. When prepared for worst case scenarios, any boat rocking can be minimized. You can preempt anything that may impact public perception and have your team ready if a legal issue is raised—all while hoping for the best, which is of course a return to smooth and satisfying productivity. Do you need impartial and expert support in mounting workplace investigations following serious misconduct or due to a threatening employee? The corporate team here at Lauth Investigations International specializes in conducting swift, discreet, and professional investigations and are ever-ready to guide you through the process. Reach out today to learn more about the various ways in which we can assist.
What’s the best way to get your team to thrive and drive profits? According to 94% of entrepreneurs, when it comes to achieving success, establishing a healthy culture at work is vital. Employees should feel comfortable, confident, and psychologically safe in order to do their best work. However, bullying and violence in the workplace are at epidemic proportions in America. Could it be happening among your employees too?
Back in 1998, the U.S. Office of Personnel Management acknowledged bullying as a form of workplace violence. So, whether we’re talking about attacks that are physical or purely psychological in nature, it is clear that preventing workplace bullying and violence is a core duty for every organization.
Despite this shift in perception, research reveals that 79% of working professionals have indirectly experienced or witnessed bullying or worse at work. The associated emotional and physical toll plays out across the lives of those involved and the bottom lines of the businesses dropping the ball. So, what can you do to stop violence and bullying in the workplace in its tracks? An expert corporate investigator is an ideal collaborator to stamp out these issues at their root and restore corporate culture to its destined strength and capability.
Leveraging Workplace Investigations to Prevent Bullying and Violence
The risk of workplace bullying, assault, and other forms of violence can be minimized when employers take precautions. One of the best places to start is in raising general awareness and establishing a zero-tolerance policy. Did you know that 55% of human resources professionals do not know if their organization has a workplace violence prevention program? If your HR department could be nestled within that statistic, then it’s time to take action.
For companies where corporate culture has eroded and unacceptable patterns of behavior have become ingrained, sometimes setting new policy and even scheduling team members for related training can be insufficient to fully course-correct. In these instances, enlisting the help of a specialized corporate investigator can provide just the jolt required to finally turn the page on workplace bullying and violence.
A corporate investigations company can offer an array of preventative and reactionary approaches, allowing you to not only win the battle on violence in the workplace, but win the war too. These include:
Together, these resources can be used to identify vulnerabilities and opportunities to shift the status quo onto permanently higher ground.
Why Invest In Workplace Bullying and Violence Prevention?
The cost to pursue these kinds of prevention tactics may seem prohibitive, but research indicates that for every dollar a company invests in safety, they save somewhere between $3 to $5. After all, the financial drain that all forms of workplace violence represent for companies like yours include not only the untold losses in team productivity and staff turnover but also the potential for legal fees and even fines if a portion of culpability should ever land on your doorstep.
In contrast, a safe and secure workplace with a synergistic team dynamic is one that will inevitably push profits to their potential while attracting the best future talent. These kinds of rewards are priceless. So there’s no reason to hesitate when it comes to designing a thoughtful workplace violence prevention program and drawing upon the resources required to implement it. If that means outside help is the best choice for your business, then the corporate team here at Lauth Investigations International is ready to provide the tailored support that you require. Reach out to us today to find out more.
