How well do you know the people you hire? In today’s competitive job market, it’s perhaps unsurprising that candidates are embellishing their CVs with ‘little white lies’ in order to stand out to recruiters.

A recent analysis by The Risk Advisory Group of over 5000 CVs found that 70% contained inaccuracies, ranging from minor exaggerations to outright lies.

“A growing number of people are applying for jobs with inaccurate CVs. Some discrepancies may be genuine slip-ups, but others are deliberate attempts by job seekers to deceive employers in order to get ahead,” said Michael Whittington, Head of Employee Screening at The Risk Advisory Group.

63% of the CVs analysed contained falsehoods pertaining to academic qualifications, with one claiming to have obtained an MBA from a university that doesn’t exist, while another cited attendance at a prestigious English university but failed to mention having been expelled long before graduation. Other inaccuracies related to employment history, skills and responsibilities, and criminal records – one even omitting fraud committed against a previous employer.

“Trust is very important in professional relationships, and by lying on your CV, you breach that trust from the very outset,” said Rosemary Haefner, vice-president of human resources at CareerBuilder. However, damaging a professional relationship could be the least of the employee’s problems. Candidates who lie during the recruitment process could be found to be in breach of contract resulting in immediate termination, and some CV falsehoods could even constitute “fraud by false representation,” which carries a maximum 10-year jail sentence.

From the employer’s point of view, hiring an employee based on false information could also have unpleasant consequences.

“The repercussions of making the wrong hire can be huge. It can cost a company time, money and, potentially, its reputation if things go awry. And with organised crime and insider fraud on the rise, it can also leave a business exposed to infiltration by rogue candidates, leading to data hacking and security breaches,” warns Michael Whittington.

Steve Girdler, managing director at HireRight, adds: “Organisations are disproportionately focused on external threats, such as cyber security, while paying scant attention to the greatest risk to their safety and reputation – properly qualified, professional employees. They should stop taking applicants at face value and give the same due diligence to employees as they do to other risks.” Research by Careerbuilder backs him up. It found that 51% of employers said they spent more than two minutes reviewing a CV, and one in four spent less than a minute. 12% admitted to spending only 30 seconds reading a candidate’s CVs, so it’s hardly surprising that so many inaccuracies are going undetected.

“We urge companies to validate the credentials of all potential hires in advance, thereby avoiding costly mistakes further down the line,” concluded Michael Whittington.

Fraud continues to be a high profile news story: in the last week, a former Ukip MEP has been jailed over £500k expenses fraud, the finance director of Bannatyne Group was in court over fraud amounting to £8m, and it was revealed that in 2014 insurance fraud was worth an incredible £1.32bn.

Fraud, or deception for personal gain or to cause loss to another party, comes in many forms, making protecting your organisation against fraud an ongoing challenge.

There are numerous risks to organisations: job applicants lying on CVs in order to get jobs, employees filing false expenses claims, and senior staff abusing their positions for financial gain are just a few examples.

As well as fraud within organisations, every individual working for an organisation is a potential target for fraudsters – and it could well be the organisation’s money and reputation which ends up lost.

Consequences

The consequences of fraud are extremely serious, including imprisonment, hefty fines and damage to reputation of both the individual and the organisation.

Fines, lost revenue and legal costs associated with fraud can lead to reduced wages, cancelled bonuses, decreased morale and even redundancies.

Our Online Fraud and Market Abuse training is designed to help protect organisations against the various threats posed by fraud by raising awareness among all staff.

Everyone in an organisation is responsible for detecting fraud and protecting the organisation from its consequences. This excerpt from the ‘Identifying and preventing fraud’ section of the course demonstrates 12 red flags to help individuals detect fraud in your organisation:

Behavioural red flags

• Employees who consistently work longer hours than their colleagues for no apparent reason and are reluctant to take time off.
• Employees with a sudden change of lifestyle and/or social circle.
• Employees under apparent stress without identifiable pressure.
• Employees who request significant detail about proposed internal audit scopes or inspections.

Financial red flags

• Employees known by others to be under external financial pressure.
• Employees who appear to make a greater than normal number of mistakes, especially where these lead to financial loss through cash or account transactions.
• Employees with unexplained sources of wealth, or at the highest level of performance (e.g. sales) where there might be a concern that they are achieving this through suspect activity.
• Employees with competing or undeclared external business interests.

Procedural red flags

• Employees making procedural or computer-system enquiries inconsistent or not related to their normal duties.
• Customers or suppliers insisting on dealing with just one individual.
• Managers who avoid using the purchasing department.
• Poor engagement with corporate governance philosophy.

These red flags are designed simply to raise awareness and help in the detection of fraud by giving employees an idea of what to look out for – they do not constitute evidence that fraud is taking place.

Our Online Fraud and Market Abuse training covers identifying and preventing fraud in much greater detail, including technology fraud, internal and external fraud, the Fraud Act 2006, the consequences, investigation and reporting of fraud.