Employment Screening as a Business Risk Management Strategy

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Employment Screening as a Business Risk Management Strategy

Information is key to minimising risk in a hospitality business and there is no greater internal vulnerability than human capital risk.

The economic rebound from COVID-19 has created labour shortages across industries, with the WEF Global Risks Report 2022* showing that the hospitality sector, one of the most severely affected by the pandemic, is especially vulnerable to staff shortages. This is leaving businesses making desperate hiring and buying decisions without the necessary security checks.

More and more, the biggest fraud threat to hospitality and leisure businesses comes from within and owners and managers must ensure they have a tight grasp on their recruitment processes, proactively seeking to know who they are hiring in order to mitigate internal risk.

Employment screening protects a business from financial, reputational and security risk. It verifies candidate disclosures and provides information that might fall below the voluntary disclosure requirement, enabling a balanced, fully informed commercial decision to be made.

Adding to this, screening programmes can strengthen a business’ defence should a lawsuit arise, by demonstrating ‘duty of care’ in the employment process.

Pre-hiring background checks are therefore essential in ensuring that you are making the right employment decisions and protecting your hospitality business.

Working regularly with pubs, bars, hotels, restaurants, arenas, casinos, holiday parks, major events, travel companies and theatres, Capcon offers risk management and profit protection services to businesses across the hospitality sector – both in the UK and worldwide. Our tiered employment screening programmes range across the board from top level senior hires to entry level checks for temporary positions.

Some examples of how we have helped businesses in the hospitality sector include:

  1. Capcon screened a Manager for a leading hotel group who they had already hired. The screening revealed he had been fired by a previous hotel group for gross misconduct. The candidate was immediately dismissed and the business’ reputation was protected.
  2. The Financial Director of a travel business stole £3m over a five year period which almost sent the company into administration. Capcon was instructed to investigate financial ambiguities and quickly discovered that the FD had been secretly running a parallel travel company and creating a fictitious audit trail with separate bank accounts. He covered his tracks by fraudulently inflating profits and creating a false trail for the company’s Auditors. Capcon reported the matter to the Economic Crime Directorate. The FD was arrested, charged and prosecuted and subsequently found guilty of thief and false accounting. He received a five year custodial sentence. During Capcon’s investigation they discovered the FD had committed a similar offence when employed by a previous travel Company. Had Capcon carried out screening of the FD prior to his employment this whole unfortunate episode would have been avoided.
  3. A leading UK gaming company used Capcon to screen employees recruited into regulated positions. Whilst 80% of applicants passed the screening process and were hired, 20% failed. There were a range of reasons which included:
    • Personal addiction to gambling
    • Falsification of qualifications
    • Criminal convictions (not disclosed)
    • Adverse social media
    • High personal debt and default

Capcon’s screening process reduces the risk of taking on employees who could damage the business both financially and reputationally.

To find out more, contact Capcon on Tel. 01372 237 050 or Email. info@capcon-argen.com. Alternatively, please visit our website: https://www.capcon.co.uk/employment-screening-lp/

*Source: WEF_The_Global_Risks_Report_2022.pdf

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