Working with truth and question of insight into the integrity along with risk potential of candidates’ employment …
The economic downturn is changing the nature and scale of fraud, plus the integrity risks faced by organisations. The speed of change is so fast that the opportunities of committing fraud have also become more prevalent. Following others, more people feel real pressure to ‘cross the line’ or to look the other way to do so. In addition, the falling economic tide may expose more previous frauds. The recent collapse of certain investment schemes illustrates how allegations of previously undetected fraud emerge from the shadows.
Corporate frauds, a global phenomenon is emerging as one of the major threats to corporate India. According to an estimate, over INR 40 billion revenue is lost by corporate India every year in frauds. IT, real estate and financial services have emerged as the major affected sectors, with over 53 per cent of total frauds, during year 2006 to year 2008.
Corporate India unanimously agrees that the maximum potential of committing fraud exists within the organisation, including the senior management and other employees. Job fraud is an integral part of corporate frauds, which is often committed by those, who are appointed at high positions, manage business and at times, manipulate the business of the corporate. C M Kharbanda, Vice President Finance & Accounts, LANCO Group India states, “People fail in jobs not because they cannot do the job rather, because they do not match the job. Employment screening should be formed as a part of the organisation’s risk management strategy.”
Job fraud refers to fraudulent or deceptive activity or representation on the part of an employee or prospective employee toward an employer. Employee frauds are a serious concern for any organisation. There are three important factors connected with committing fraud – motive, opportunity and rationalisation, collectively known as the ‘Fraud Triangle’.
Personal pressures, individual performance targets and infiltration by organised crime are some of the common factors motivating employees to commit fraud. The employees have emerged as the biggest perpetrators of frauds in the survey. “Everyone is hiring at breakneck speed, which has compounded the problem,” acknowledges Phillip K. Mammen, Group Head of HR at IT-giant, Middeck India. The demand for talent is high, as today’s companies are going all out to recruit experienced people. In this eagerness to get into the dream company or dream job, fraudulent resumes (without requisite experience) are rampant in the Indian industry.
According to Thomas Jefferson, third president of the United States of America, “No duty the Executive had to perform was so trying as to put the right man in the right place,” and this remains a continuous challenge in human resource management. Sunil Gautam, Vice President – HR, Medley Pharmaceuticals Ltd opines, “Pre-employment screening and selection is the main function in the protection of susceptible applicants from developing an occupational disease. Employees attrition, security concerns, corporate scandals and workplace violence have made pre-employment screening essential to avoid costly hiring mistakes for each organisation, be it commercial or non commercial.”
Selecting qualified job applicants, conducting periodic integrity and honesty tests are therefore critical steps in building a talented and committed workforce, supporting an effective organisational culture and enhancing the overall performance of the company. The effective fraud risk management more than pays for itself. Companies across industry sectors are desperate to find apposite ways to reduce cost. Attacking fraud, waste and abuse offer a huge cost savings opportunity to a relatively low investment.
Valid assessments not only allow for hiring better performers but they also prevent hiring poor performers. A poor selection can cost a company as much as five times the employee’s monthly salary. Personnel assessment and pre-employment testing remain essential to any method of collecting information about individuals for the purpose of making a selection decision. These selection decisions include unlimited hiring, placement, promotion, referral, retention and entry into programmes, leading to career advancement. Ashok Chawla, Vice President, Accounts and Finance, Frankfinn Institute of Airhostess Training elucidates, Mumbai, “Today’s organisations face a completely different set of challenges- globalisation, rapidly evolving technology, rapid development in industry and business, risks and complexity of information and data management- the list is endless. Coupled with this, the loss of ethical values among employees have led to corporate frauds thereby, adversely affecting the organisations at financial and reputation loss. Pre-employment checks, if conducted properly with latest technological advancements such as LVA, will help not only to combat employee risks but would also prompt for an ethical and healthy culture in the organisation.”
Generally speaking, an assessment tool is any test given to individuals to evaluate their job related competencies, interests, values or fitness for employment. Psychometric testing, assessing the personality of the applicants, is one of the most common practices along with other aptitude tests being followed around the world.
Layered Voice Analysis (LVA) is a unique and patented state-of-the-art voice analysis technology (invented by Nemesysco Ltd., Israel) uses a series of complex signal processing algorithms to identify different emotional levels and make determinations regarding an individual’s veracity, criminal intention and general credibility. In the field of Human Resource Management, using a unique combination of advanced questionnaire methodology and voice analysis liedetection technology, LVA provides an unprecedented level of insight into the integrity and risk potential of employment candidates, which is being used by HR Managers for
“Pre-employment screening and selection is the main function in the protection of susceptible applicants from developing an occupational disease. Employees attrition, security concerns, corporate scandals and workplace violence have made preemployment screening essential to avoid costly hiring mistakes for each organisation, be it commercial or non commercial.”
“People fail in jobs not because they cannot do the job rather, because they do not match the job. Employment screening should be formed as a part of the organisation’s risk management strategy.”
The LVA technology is being widely used within investigative, intelligence and law agencies. It is now available in India. The technology is also found useful in the fields of psychology and medicine. Applications include treatment aids for mental health, effecting biofeedback with clients, assisting with emotional therapy, identifying stress levels for high risk cardiovascular patients, and general stress management. The technology can be used in three different analytical modes - Online, Offline and Interrogative.
“Valid assessments not only allow hiring better performers but they also prevent hiring poor performers. A poor selection can cost a company as much as three times the employee's annual salary. Reliability and validity are conditions, essential for a pre-employment tool to be effective. LVA provides an unprecedented level of insight into the integrity and risk potential of employment candidates, which is being used by HR Managers.
According to Rakesh Arora, Chief Executive Career Consultants, “Valid assessments not only allow hiring better performers but they also prevent hiring poor performers. A poor selection can cost a company as much as three times the employee’s annual salary. Reliability and validity are conditions, essential for a pre-employment tool to be effective. LVA estimates a candidate’s liability potential by analysing the emotional content of his or her voice, when responding to specifically designed questions. Used as an assessment tool in recruitment and selection process, it provides insights into a candidate’s ethical inclinations, identifies what portion of her or his responses is uncertain, what questions require more of her or his mental attention, and what topic areas appear to be sensitive issues for the candidate. In an era, where the employee fraud is consistently on an increase, tools like LVA can be helpful as an assessment tool in recruitment, selection and post employment assessments.”
Improvement in existing recruitment process with pre-hire assessments is inevitable. With the use of unique LVA technology, corporate India can combat or rather control the perceived threats of frauds. It can also check the mental stress levels to increase the productivity from the most valuable asset, the employees, and can begin the journey with truth.
“Today’s organisations face a completely different set of challenges- globalisation, rapidly evolving technology, rapid development in industry and business, risks and complexity of information and data management- the list is endless. Coupled with this, the loss of ethical values among employees have led to corporate frauds thereby, adversely affecting the organisations at financial and reputation loss. Pre-employment checks, if conducted properly with latest technological advancements such as LVA, will help not only to combat employee risks but would also prompt for an ethical and healthy culture in the organisation.”
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