How to protect your staffing firm from fraud through better hiring practices

shutterstock_166988123Your reputation rests on the honesty of your talent. Your clients hold you responsible for the deeds or misdeeds of the talent you send them. You’re the gatekeeper, the bouncer at the door, and your staffing agency’s reputation depends on the behavior of the workers you send to your clients.

Here’s how to be confident that you’re providing only quality talent.

The 10-10-80 rule

When used to predict the trustworthiness of an employee, the 10-10-80 rule states that 10 percent of a workforce will never commit a dishonest act, 10 percent will take advantage of any opportunity to steal, embezzle or otherwise line their pockets and the other 80 percent — well, that depends on the situation, the degree of temptation, the rationalization and the likelihood of getting caught.

The chronically dishonest 10 percent are the easiest group to weed out of your talent pool. They often leave an electronic trail or significant tells such as:

  • Criminal records
  • Holes in resumes big enough to drive a truck through
  • Sounding vague or defensive in explaining work histories
  • Having previous employers who are hesitant to divulge details

That’s the easy part. It’s the generally honest 80 percent, however, who present your greatest challenge. These candidates exhibit few warning signs because they’re unlikely to have been problem workers in the past and will likely be problem-free in their new positions — unless something changes.

Look out for candidates with serious debt problems, as a drug or gambling addiction, or even a divorce or health concern can make a candidate desperate enough to change life patterns.

Screen for drugs and consider requesting authorization to generate a credit report, particularly if the candidate will be working in a position that gives that person the opportunity to steal. And it’s not always cashiers, bookkeepers and other obvious jobholders who pose the greatest risk. At one large manufacturing facility, an entrepreneurial dock worker found a way to document cases of hand sanitizer as being purchased, then opened an eBay account and sold the stolen merchandise in the plant parking lot.

Finally, get your clients involved. Encourage them to implement checks and balances that help employees resist temptation. Sensible separation of duties policies should be enacted for those working around cash or company finances. And ask that employers watch for low morale. Honest workers can go astray if they feel owed for forced overtime, missed raises or unpaid sick days.

Theft, embezzlement, fraud and other illicit activities can’t always be predicted or entirely screened out, but it’s critical to do all you can to reduce the risk to your clients — and to your agency’s reputation.


As a full-service payroll funding, invoicing, payroll taxes and credit monitoring resource, TemPay enables staffing agencies to focus on growing their businesses.