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He says “Hiring and firing are black arts for most people. Few people are trained for hiring –instead we are led to depend on our gut. Few people are trained for firing –instead we are led to believe that companies never make hiring mistakes and always develop their employees properly, so you’ll never have to fire anyone. The realty is that hiring and firing are difficult processes, and this section will make you better at both.”

In the chapter on “The Art of Recruiting” he gives a good tip on reference checking.

It goes something like this…most of us rely only on the references provided by the applicant. We like the person and our intuition tells us they are the one. So we only check the references provided by the applicant because “we don’t want to hear that we like a bozo.” What we should be doing is checking independent references–at least one person they worked for and one person who worked for them. Guy recommends using LinkedIn to find these independent references.

Great tip! There’s something in this book for everyone.

From “Why Smart Companies Do Dumb Things” to “How to Prevent a Bozo Explosion.”

Photo Credit: Mavis

4 Ways Employees Can Steal From You

September 29, 2008 By Chris Miller

money
According to the 2007 National Retail Federation survey, retailers lost 41.6 billion dollars to theft and fraud. The majority of retail shrinkage last year was due to employee theft, at $19.5 billion, which represented almost half of the losses (47%).

While large corporations can usually weather the financial impact of employee embezzlement, the problem hits smaller organizations much harder. In many cases, business owners have lost their life savings to a bad hire. Even medium-sized companies can falter under the impact. Below, I’ll describe 4 ways in which an employee can steal from you. Then, I’ll explain the best way to prevent it from happening to your business.

#1 – Inflated Expense Accounts

Expense accounts are important for a variety of businesses. However, left unchecked, an employee can easily fabricate expenses, claiming reimbursement for money that was never spent.

#2 – Tampered Payroll

Payroll fraud is more prevalent than many employers realize. A bad hire may add ghost employees to the payroll, claim wages that are unearned or unauthorized, or even steal and cash blank payroll checks.

#3 – Fraudulent Billing Schemes

A lot of organizations work with vendors, yet have no formal process by which purchase orders are reviewed and approved. Employees can easily establish fictitious vendor accounts, diverting payments to a P.O. box.

#4 – Register Theft

Businesses that operate in a retail setting can be victimized by an embezzling employee who steals directly from the register. In simple cases, the employee collects money from a legitimate customer for a purchase, but instead of ringing the sale, the employee pockets the cash. It can go much further, including falsifying refunds, voids and taking advantage of customers’ credit cards.

How To Prevent Employee Embezzlement

A major portion of employee embezzlement can be prevented. Employers must maintain a strict employee screening process and perform thorough background checks on job candidates. While uncovering past incidents of theft or misappropriation of funds can be difficult, the profiles of bad hires who are likely to commit fraud are often similar. The worst thing an organization can do is neglect the importance of screening applicants and doing comprehensive background checks.

Eliminating bad hires from the applicant pool can save your company the headache of dealing with theft, fraud and embezzlement.

3 Reasons You Need To Screen Employees

July 11, 2008 By Chris Miller

Job applicants often lie or hide information when they fill out an application or submit a resume. Unfortunately, many companies neglect to properly screen these applicants. Once they’re hired, that opens the door for potential theft, workplace violence, or any number of incidents that may lead to legal action. Screening your potential employees is a critical component of ensuring the safety and productivity of your workforce. Here are 3 reasons you need to thoroughly screen your employees…

Reason #1: Most People Lie

I’m not being cynical. I’m being realistic. Many studies have proven that job candidates routinely fabricate or suppress information on their applications and resumes. You need to validate the information by having an effective screening process in place.

Reason #2: Workplace Productivity Increases

Studies show a direct link between employee screening and workplace productivity. This is largely due to higher attendance, reduced turnover and overall stability of the workplace environment. Checking with past employers can help forewarn of potential employee issues.

Reason #3: Employee Quality Increases

Validating past employment and education are necessary, but both are merely scraping the surface. Screening an employee also means conducting a background check to uncover a possible criminal history. In many cases, hiring new employees with a hidden criminal past has led to theft and workplace violence. Effective employee screening helps to protect your workforce and increases the quality of your staff.

Using Routine Screening Procedures

Every company that hires new employees should be screening those employees prior to offering them a position. Not only will a background check expose a potential criminal past, but it can help ensure your staff’s safety and lead to an overall increase in workplace productivity. Remember, if you trust the information provided on an application or resume without validating it, you could be asking for a major employment headache in the future.