Employee misconduct is a big problem that is too often ignored. Counterproductive work behavior costs U.S. companies $200 billion per year, and the Association of Certified Fraud Examiners estimates that fraud alone costs a company 5% of its revenue per year.

Bring this up in front of a CEO, Human Resources (HR) director or loss prevention executive, and they will certainly acknowledge the damage misconduct can do (i.e., to people, assets, reputation and culture), yet the company may continue to use the same broken process over again expecting better results when it comes to insider theft detection, loss prevention and employee screenings.

There are two main reasons for this:

• The tools most frequently used to screen candidates for counterproductive work behavior are mostly based on a broken process.
• The employee screening process is often owned by the HR department, which is not evaluated on metrics related to reducing counterproductive behavior.

Instituting a Proactive Employee Screening Process

When evaluating insider threats, employee misconduct, or even counterproductive work behaviors of employees, it’s essential for organizations to take a step back and evaluate the employee screening process. Screening candidates before the hiring process is an overlooked part of a solid insider threat program.

Let’s take a look at a few of the tools that can be used as a part of an employee screening process:

• Criminal background checks: These checks are useful because they provide documented information about convictions. One weakness is the huge gap between what occurs and what is reported. Some companies, based on their own policies and procedures, may make a conditional offer of employment before performing a background check, which can waste an employer’s and candidate’s time. 
• Reference checks: Reference checks are certainly a tool employers can use to sift through candidates, though online reference checking may provide a higher level of relevant information than a phone call method.. While fictional references may be difficult to detect or confirm, many background screening firms do have techniques in place to identify fraudulent references.
• Interviews: Interviews can be quite useful for employers. For inexperienced or untrained interviewers, however, results may be inconsistent among a candidate pool. If executed properly though, interviews can be a particularly valuable path for organizations when it comes to screening.

Is the Vetting Process Owned by the Correct Team

In theory, it makes sense that the candidate screening process be owned by the Human Resources department as HR deals with all aspects of human capital within businesses.

So, what is wrong with HR managing the process for screening candidates for counterproductive behavior? HR screening processes are rarely, if ever, measured on metrics related to counterproductive work behavior. That responsibility is typically owned by the security or loss prevention department, which end up investigating cases of employee misconduct — but, of course, those investigations occur after an employee has been hired and the behavior warrants investigation.

Keep in mind this simple fact: every person in your company who is fired for criminal misconduct was hired using your screening process. There is no way around it.

With this in mind, I would make the case that it makes more sense for the security or loss prevention team to own the employee screening process, since their key performance indicators are directly related to detecting, preventing and investigating counterproductive work behavior.

Solutions to Boost Employee Screening Efficiency

Taking a look at organizational ownership over employee screening and vetting is an important consideration for all organizations. The next step is evaluating the processes and solutions being used for employee vetting and screening. In many cases, employers continue to use the same process for decades without reevaluation.

In a recent conversation with the head of talent assessment at a Fortune 100 telecommunications company, I was informed that they are stopping criminal background checks entirely for their retail stores. Their reason is that they analyzed the results of hiring candidates without a background check and found that there was no meaningful rise in theft. Therefore, the organization decided that they could save money by stopping the background checks and writing off the same amount of theft they had before. But, I would argue that this does not address the real problem.

There are a number of processes, technologies and procedures that organizations can implement during the hiring process and after to, not only mitigate theft, but also workplace violence and other potential insider threats. Organizations can implement targeted and specialized interview training for hiring managers to learn to conduct structured interviews that can arm an organization with intelligence it may not have garnered previously to help aid in hiring decisions. There are also technologies that can automate interviews to detect counterproductive work behaviors and gather information directly from the employee or potential employee.

In addition to traditional background checks before a candidate is hired, companies can implement technologies that continually check criminal databases after someone is hired, providing security leaders with a level of intelligence they may not have had previously.

Prevention Begins with Culture

While screening and continual vetting are important tools for organizations when it comes to preventing insider threats and misconduct, a proactive approach to risk mitigation begins with evaluating who owns the role, as well as evaluating the organization’s culture and understanding that culture can have a significant impact on preventing counterproductive behaviors in the future.

*Editor's note: This article has been edited since it was first published.