Continuous Workforce Screening

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Financial Impact of Risk Management Issues: Data Privacy and PII

Business success in any industry requires some risk. Managing that risk effectively is a continuing challenge, one that is constantly evolving. With each remedial measure company leaders take to minimize or control one potential threat, another one arises with a newly developed capacity to penetrate corporate defenses. Businesses lose billions each year due to undetected or unmanaged threats.  

What’s the single greatest threat to every organization posing the costliest potential damage? The answer is the threat from insiders who have credentialed access to internal or confidential data, clients’ identification information, business or client account assets, and valuable intellectual property. 

Quantifying the Extent of Insider Employee Fraud 

Statistics reveal that a disturbing 95% of businesses reported experiencing employee theft, and over 75% of employees admit to stealing from their workplace. Data shows that the average perpetrator works at their company for 8 years, and that 35% of millennials justify stealing from their employer. And 79% of cases involved more than one person committing the workplace theft.  

While intentional malicious insider theft constitutes 23% of employee security incidents, substance-use-related negligence is an additional source of corporate financial losses. Compromised workers collaborating with outside criminals are still another type of insider risk that often targets confidential client information and intellectual property.  

The financial services and banking industries are those most targeted by insider occupational fraud, followed by manufacturing, and public administration sectors. It is finance and accounting employees who constitute almost 40% of employee theft by various forms of embezzlement.  

Costs of the Insider Threat to Business  

According to two recent security industry reports, the average annual cost of insider risk incidents in 2023 is $16.2 million per organization. Malicious insider incidents cost an average of $755,760 each, and credential theft committed by or assisted by insiders cost an average of $871,686 per incident.  

When insiders use authorized credentials to access clients’ confidential information or accounts with nefarious intent during the scope of their employment, the company bears financial liability for damages suffered by other parties. 

Effective Responses to Mitigate Risk of Insider Theft and Fraud 

Leading corporate organizations in the financial services and banking industries have relied on a variety of systematic practices to detect incidents of insider theft, fraud, and other costly misconduct by members of their workforce of full-time employees, contractors, and consultants.   

The first routine security measure occurs during the pre-hiring stage when the candidate’s background is screened for any criminal history. This is often the last such screening most organizations conduct. The more frequently used anti-fraud controls employed by most companies include relying on a ‘self-reporting” policy for any type of criminal activities one might incur, an internal audit department and periodic external audits, training, and enforcement of codes of conduct, and certified management statements.   Effective measures but seem to fall short, based on the cost referenced above. 

An Essential Method of Limiting Financial Liability – Continuous Workforce Screening 

What is often overlooked, however, is the fact that a workforce is comprised of people, each of whom face daily challenges in their personal lives like financial pressures, family problems, physical and mental illness, substance use disorders, or perhaps a gambling addiction.  

When an employee’s private life becomes too pressurized for that individual to cope with, many act out in ways that lead to criminal conduct, police arrests, and formal court appearances. 

These are momentous events in that person’s life, yet employers might not learn of the criminal case unless it receives public media attention, a rarity in large communities. Additionally, security executives cannot perform optimal risk management without being notified of a worker’s non-work-related arrest, whether felony or misdemeanor.  

Continual workforce screening provides an ongoing assessment of your employee population 24 hours a day. PostHire’s continual screening services deliver accurate, reliable notification of every worker’s criminal arrest and prosecution in near-real-time, wherever it occurs in the United States.  

Statistics show that 25% of workers involved in employee theft or fraud had financial problems, and 11% were experiencing divorce-related problems.   

Criminal arrests and prosecutions are usually tell-tale signs of such crises. Armed with the knowledge that a member of the organization’s workforce is facing criminal prosecution in their private life, security officers can respond appropriately to control the employee’s ability to harm the company or its clients.  

Each organization’s own personnel policies and procedures determine what response is appropriate considering the individual case, but no responsive actions are possible unless notice of the criminal charge reaches those entrusted with managing the company’s risk exposure.  

PostHire uses a unique, proprietary research protocol to source the most up-to-date official court filings enabling PostHire to communicate near-real-time notice to company leaders whenever an employee, contractor, or consultant faces a criminal charge, 24-hours a day, anywhere in the country.  

For a full customized population assessment for your organization, contact PostHire today. 



Continuous Criminal Monitoring​

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