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How to Prevent Employee Fraud and Theft - Part 2: Hotline and Effective Screening

In the second post of this series, Kathryn Carlson discussed two methods to address employee theft once it has taken place. This segment of the series advocates two preventative methods:

This is the one thing that the Association of Certified Fraud Examiners endorses above all other prevention methods to decrease your losses by half. There are programs that you can sign-up for that allow employees to actually talk to someone, there are others where an employee can leave a recording. Built into the KPA Human Resources Management system is a program that allows employees to answer a series of online prompts that results in actionable information.


The program also has options for employees to report things anonymously. If your reporting system allows for confidentiality, people are much more likely to bring issues forward. If an employee shares in the benefit of solving the problem in the form of a reward, they are also more likely to report an issue that is costing you money.

Effective Screening
Your background checking provider who does applicant screening can also screen your current employees and vendors. While it is illegal to have a blanket strategy that states ?We will not hire felons,? you can make sure the type of background check that you perform has relevance to the position that you are hiring for. A good hiring manager uses the background check, and also takes into account time since crime, type of crime (someone with a history of embezzlement is not your best choice for a controller), and restitution. Check references, do a Google search. Don?t discriminate, but watch for red flags such as a history of worker?s compensation reports.


For example, if a candidate has a history of back injuries, and all candidates being equal, that individual may not be the best choice for a position that involves heavy lifting. Due diligence in this area goes a long way to prevent workers compensation fraud. If you are concerned about a current employee, perform a background check. You should notify the employee that you are performing the background check, and reasons of retention or promotion are acceptable. Check your vendors and 1099 contractors or contingent workforces. Ask staffing firms to provide you with a copy of their comprehensive reports.



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Tags: Effective, Employee, Employee Screening, Employee Theft, Fraud, Hotline, How to, Part 2, Prevent, Screening, More…Theft


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Comment by Ralph Paglia on October 16, 2012 at 2:59pm

Hiring any employee for any department in a dealership without a background check or some kind of pre-employment screening, testing or evaluation is about the stupidest and most recklessly irresponsible decision i can imagine any dealership manager making.  I am certain that the vast majority of dealer principals want this management function executed properly, but this is an example of management malpractice.

Unfortunately, when this type of management incompetency is exposed, the manager only gets fired while the dealer is stuck with negligence based liabilities that could put him out of business, or worse.

Comment by Kathryn Carlson on October 16, 2012 at 1:11pm

With a background check costing less than $30 and the rise in negilient hiring lawsuits and employee theft it just makes sense to always do a background check on any potential employee.  As Ralph mentioned assessments are also an excellent tool to make good hiring decisions.  In addition to Hire the Winners many KPA clients are using  Management By Strengths .  The bottom line is that knowledge is power - when hiring the more you know about an applicant the better your decision will be.

Comment by Patric Timmermans on October 16, 2012 at 12:13pm

Thanks Ralph for the feedback and additional suggestions. It's crazy how many dealerships don't do any background checking at all. Worse, we've heard the comment "We don't do background checking because we don't want to know". That's just asking for trouble.

Comment by Ralph Paglia on October 12, 2012 at 11:25pm

Patric, thank you for a post that all dealers should read... I especially like the emphasis on pre-employment screening and would like to recommend that all dealers consider using "Hire The Winners" and their"Car Sales Simulator" which is an online, video scenario based employee evaluation that is specific to the auto industry.  Hire The Winners provides a complete personality and sales skills analysis that has been scientifically designed, proven accurate and accepted by the Federal Government's EOE commission and the National Labor Relations Board (NLRB).  By having prospective employees, including managers take the Car Sales Simulator evaluation BEFORE the interview, Hire The Winners provides the dealer or manager with a complete assessment and recommended questions to ask during the interview.  The Kelly Auto Group in Eastern PA and Florida has found it to be so effective that no sales department employees are allowed to be interviewed or hired before they have completed the Car Sales Simulator. 

Along with the steps that Patric recommends, I recommend the Car Sales Simulator from Hire The Winners, which I have personally been using to find and hire the right people for car dealers since 2005.  Because the ADM Community has been such a staunch supporter of dealers implementing new hire pre-employment screening systems such as Hire The Winners, the company offers a 30 day trial use of the Car Sales Simulator for ADM Members by using the following URL:

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