Presentation is loading. Please wait.

Presentation is loading. Please wait.

MITIGATING HUMAN RESOURCES RISKS. Human Assets Can Make Your Business Fly – Or Sink  The “human factor” is the common element in most risk and crisis.

Similar presentations


Presentation on theme: "MITIGATING HUMAN RESOURCES RISKS. Human Assets Can Make Your Business Fly – Or Sink  The “human factor” is the common element in most risk and crisis."— Presentation transcript:

1 MITIGATING HUMAN RESOURCES RISKS

2 Human Assets Can Make Your Business Fly – Or Sink  The “human factor” is the common element in most risk and crisis scenarios  9 out of 10 risks or security problems are caused by people inside your organisation

3 Business Risks on HR Side  Fraud  Distribution scams  Legal disputes  Industrial espionage  Intellectual property theft  Workplace theft  Harassment & discrimination claims  Corruption  Backlash vs. workouts  Sabotage  Kidnapping  Extortion  Unsecure data & communications  Workplace violence (including violence against executives and facilities)  Organised crime  Confidentiality breaches  Accidents  Mismanagement  Service deterioration  Contractual risk

4 Asian Labor Environment  Asia is a growth area representing a major source of new professionals…  …Yet it is also a major center of labour ethics violations  Unethical sources include: child labour, sweatshop labour, forced labour, prison labour  Cultural differences – “us vs. them” – make multinational corporations vulnerable

5 HR-related Crime Scenarios  Fraud, industrial espionage, intellectual property theft and piracy, corruption, sabotage: staff are often involved  Data & communications are at risk from employees, not just from external enemies  Organised crime may recruit your staff, or plant stooges

6 HR-related Crime Scenarios  Workouts & downsizings can spark backlashes, violence, asset stripping, hostage taking  Product tampering extortionists are often insiders  Kidnappers rely on insider information

7 Common Traits of Companies That Get Into Trouble  Frequently rotating managers  Poor public and corporate records  Migration of cliques – “tribal loyalty”  Corporate culture not instilled  Neglect of due diligence practices  Internal controls not firmly enforced  No corporate HQ connection with key staff

8 Ongoing HR Risk Mitigation Employee Integrity Program (EIP)

9 Employee Integrity Program (EIP) – Why Have One?  Your organisation needs:  Honest employees  Effective internal controls  Strong & visible deterrents

10 Employee Integrity Program (EIP) — Why Have One?  An effective EIP will help you:  Reduce risks to your reputation  Protect your resources  Improve your bottom line  Build your company’s value

11 Employee Integrity Program (EIP) — Why Have One?  An effective EIP will also help minimise losses relating to:  Internal fraud & theft  Negligent hiring  Workplace violence  Workers’ compensation claims  Non-performance of duties  Non-compliance

12 What Goes Into An Employee Integrity Program (EIP)  Background checks on senior or sensitive employees  Professional pre-employment screening  Monitoring and surveillance  Spot checks on ethics compliance  Substance abuse testing (USA)

13 What Goes Into An Employee Integrity Program (EIP)  Risk analysis of your organisation  Whistle-blowing & complaint mechanisms  Structured exit interviews  Strict standard operational procedures to maintain control over your organisation

14 Pre-Employment Risk Mitigation

15 What is the most common type of fraud in the world? Answer: Résumé fraud

16 Pre-Employment Screening  LEVEL 1: Light Screening  LEVEL 2: Medium Screening  LEVEL 3: Full Screening All companies should conduct thorough background checks before hiring. Three different levels of pre- employment screening are available to fit your needs.

17 Pre-Employment Screening  When considering pre-employment screening, consider the following:  Find out not just where and when, but why the candidate left the previous job.  Explanations of employers and copies of resignation letters should not be taken at face value

18 Pre-Employment Screening — Three Levels of Scrutiny LEVEL 1: LIGHT SCREENING Level 1 checks include:  Criminality check  Verification of ID number (many forgeries)  Verification of last job  Verification of highest degree obtained  Verification of address

19 Employment Screening — Three Levels of Scrutiny LEVEL 2: MEDIUM SCREENING Level 2 checks include all of the checks in Level 1, plus:  Verification of past 5 years employment  Research into past financial behaviour

20 Pre-Employment Screening — Three Levels of Scrutiny LEVEL 3: FULL SCREENING Level 3 checks include all checks in Levels 1 & 2, plus:  Verification of 10 years of employment  Discreet in-depth reputational interviews  Litigation checks

21 Pre-Employment Screening — Three Levels of Scrutiny LEVEL 3: FULL SCREENING  Firms owned, licences held, discipline actions  Media research  Property asset research  Research into liens, bankruptcy records

22 Mitigating HR Risks in Downsizing Scenarios

23 “Getting Even” Downsizing, restructuring, liquidation, exit time, firings, non-payment of bonuses, and similar actions often lead to:  The “Getting Even” syndrome  “Tribal loyalties” that outweigh corporate loyalty  Hidden liabilities, pensions, redundancy pay, other issues

24 “Getting Even” Additional threats include:  Asset stripping, sabotage, theft, embezzlement  Poison letters, dirty tricks  Theft of trade secrets, intellectual property theft  Attacks on computer systems  Pre-departure “gifts” – including computer viruses  Physical violence, hostage taking

25 Mitigating HR Risks in Downsizing Scenarios  Have effective business controls in place  Control systems must be able to deter, detect & respond to internal threats  Have early warning systems to spot risks  Carry out risk & threat assessments before downsizings, firings or “bad news announcements”

26 Mitigating HR Risks in Downsizing Scenarios Other tactics to mitigate risks:  Enhance management-staff communications  Enhance crisis management planning  Have contingency plans to deal with hostile employees or ex-employees

27 Mitigating HR Risks in Downsizing Scenarios  Enhance security to protect people & premises  Prevent unauthorised electronic access  Protect & backup all operating, financial, and data processing systems & crucial assets

28 Mitigating HR Risks in Downsizing Scenarios  Monitor departing staff on the way out  Who are the staff most likely to stir trouble?  Check employee computers for hostile plans  Check ex-employees’ computers for erased files

29 And Upsizing Scenarios — They Also Pose HR Risks  Growth requires reviews of security & HR risks  The “feel good” environment of expansion & high turnover growth can blind a company toward its risks  Businesses outgrow existing controls — that’s when security gaps appear

30 And Upsizing Scenarios — They Also Pose HR Risks  Traditional organisational, financial & security controls may be inadequate protection against disaster  Business processes can break down, and organisational mismanagement ensues

31 Case Studies Background checks reveal alarming discrepancies. The following are based on true cases.

32 Case Studies CASE 1: Forgeries and Fakes  The applicant claimed to hold a university degree  The university named by the candidate reported that the applicant’s degree was ‘fake and forged’  A reference letter, apparently signed by the university’s Deputy Controller of Examination, was also ‘fake and forged’  A second degree (BBA) claimed by the applicant was never conferred, and the claim was false

33 Case Studies CASE 2: False Employment Record  A post-employment verification is conducted on a current employee  One of the employee’s previous employment records is revealed as fake — she had never been employed by the company, as claimed  For the rest of her employment details, there were conflicts in claimed job titles, duties and salaries

34 Case Studies CASE 3: Fraud Alleged by Former Employer  When contacted, an applicant’s previous employers reported that the applicant had been terminated due to cash embezzlement, harassment and workplace violence  A second employment verification revealed this termination, and the fact that the employee caused a financial loss to his employer

35 Case Studies CASE 4: Fake Reference Letter  Applicant provided a reference letter from her previous employer  This employer was contacted and shown the reference letter  The organization revealed that the applicant had never been employed by them, and the letter she had provided was a fake


Download ppt "MITIGATING HUMAN RESOURCES RISKS. Human Assets Can Make Your Business Fly – Or Sink  The “human factor” is the common element in most risk and crisis."

Similar presentations


Ads by Google