Can you screen integrity?

May 2017 Security Services & Risk Management

Screening or vetting employees before employment, and in some cases during their employment at a company, is nothing new in the fight against fraud and poor placements. There are a variety of companies offering these services, which include checking that people are who they say they are and so on.

In some instances, companies are looking for more than simply verification, however. This is where other screening methods, such as social media or behavioural screening come into the picture, as well as the increasing requirement for integrity testing.

Jennifer Barkhuizen from Managed Integrity Evaluation (MIE) explains that research done on top performing companies over many years shows that these companies have one thing in common: integrity. More specifically, the benefits they achieve include:

• Improved reputation: Companies viewed as having integrity are seen as more credible to investors, clients and employees. Credibility means more trust, productivity, sales, market share and promotional opportunities. Companies with a firm commitment to a code of ethical standards build trust with their shareholders and public.

• Enhanced customer loyalty: In 1999, DePaul University studied three hundred large companies. The study found that companies that made an explicit commitment to an ethics code provided more than twice the value to shareholders over companies that did not.

• Higher profitability: Companies that operated with serious codes of conduct performed better than those without, in a variety of financial measures (The Institute of Business Ethics Report 2003).

• Loyal and committed employees: Many studies indicate that employees will have greater loyalty when they work for a company they view as having good values and ethical practices

“Given the importance of integrity to companies, it then becomes important to have people with integrity,” Barkhuizen says. “Psychometric integrity tests measure integrity levels and propensity toward counterproductive behaviour in the workplace.”

There are various tools available to measure integrity, which are selected depending on the position and level of the candidate. She says integrity tests incorporate measures such as honesty, trustworthiness, credibility, violation of policies, rules and regulations, reliability, dependability, lying, denial, projection, justification, manipulation, attitudes, values, aggression, emotional stability, impulse control and work ethic amongst others.

When is vetting required?

Organisations should take the level and type of positions into consideration when doing background checks. Basic background checks include qualification checks (matric and/or tertiary qualification), credit record (whether the person will be working with cash or finances) and a criminal check.

A more comprehensive check can include employment reference, identity verification, driver’s license verification and competency assessments.

“With regards to MIE’s findings, our statistics for 2016 show that out of over 561 000 qualifications checked, 15.37% of the qualifications were found to be either misrepresented, fraudulent or cancelled,” adds Barkhuizen. “We also found that Africa and International qualifications checked in 2016 carried a higher risk of being fraudulent, as candidates believe their qualifications cannot or will not be checked. Our criminal statistics show that out of 741 560 criminal checks conducted, 10 % of candidates were found to have a criminal record.”

Organisations often face the risk of fraud and corruption when it comes to their procurement processes. Fraud scenarios can include:

• Conflicts of interest between employees and vendors,

• Collusion between vendors,

• Vendors or employees defrauding the company,

• Tender collusion and irregularities,

• Quid-pro-quo corruption,

• Vendor kick-backs and bribery,

• Bid-rigging,

• Financial mismanagement, and

• Price fixing and defective pricing.

Take ownership to reduce fraud

With widespread reports of corruption in South Africa, the onus lies with companies to make sure they follow the correct procedures to rid their companies of corruption. Barkhuizen says the first step is to conduct comprehensive background screening checks when taking on new staff or entering into new partnerships.

Vetting the procurement process within supply chains of organisations is very important. This is possible by using solutions to combat procurement fraud. One such solution is the use of technology to assist in identifying potentially corrupt relationships between vendors and employees.

“More companies are becoming aware of solutions available in the market to assist with identifying fraud and corruption,” notes Barkhuizen. “It is up to companies to ensure they have the necessary tools available to combat fraud as criminals will continue to find new and ‘innovative’ ways to commit fraud.”

MIE has found the demand for background screening has continued to grow the last year, showing a 14% increase in the uptake of vetting solutions by businesses. Conducting background checks gives companies peace of mind when taking on new staff members as well as assisting companies to break the cycle of corruption.

“Background screening provides a reasonable level of certainty to companies that the candidates they employ are who they say they are. Pro-active background screening also helps companies avoid increased recruitment costs and potential negative reputational and financial implications,” Barkhuizen adds.

“With ongoing development of various vetting solutions available to organisations, it is important to include candidate and supplier screening into your organisational strategic planning and partner with a reputable background screening company to assist with combating insider fraud.”

For more information contact Managed Integrity Evaluation (MIE), +27 (0)12 644 4000, [email protected],


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