5 Ways Candidate Fraud Can Carve Into Your Bottom Line


Warren Buffett famously quipped that all employees must embody energy, intelligence, and integrity. And the hands-down most important? For Buffett, it’s integrity—without which you’ll only wind up with a clever, fast-moving thief.

We couldn’t agree more. Job applications and interviews tend to focus on other candidate characteristics—without confirming that these will be put to use for the right reasons. But honesty plays a more significant role than most hiring managers might realize. 

Consider this: for modern businesses, nearly 75% of data breaches are created from within. In 2019 alone, the average data breach cost a company $3.9 million. Failing to evaluate integrity results in significant risk—and can impact your company with tragic and avoidable loss. 

Dishonesty Is Expensive: Five Surprising Impacts to Your Bottom Line

There’s more than one way a disingenuous employee can puncture your company coffers. For starters, here are five of the most common. 

  1. Stolen cash and inventory 
    An employee that lacks rock solid credentials might feel entitled to loot, skim, and outright steal. This could be as subtle as taking home excess inventory. It can be as overt as pocketing cash from the register. However it happens, a bad hire like this directly cuts into your revenue and reduces profits. 

  2. Regulatory disruption and penalties
    Data is leaked. False regulatory claims are filed. When the law is broken, government agencies get involved—and lately, they aren’t inclined to act leniently. Even beyond the obvious disruption to your business—with an ongoing, potentially protracted audit or investigation—you stand the risk of undergoing drawn-out litigation and incurring regulatory fines and other penalties, sometimes totaling in the millions. Don’t let it happen to you. 

  3. Company reputation
    On top of lost revenue, your company’s delicate reputation is also on the line. Imagine your loyal consumers turning on the evening news—and discovering that their favorite brand is now undergoing a criminal investigation. Even just a single bad actor employee can cast a shadow over an otherwise upstanding brand—and even if you clear your brand in the end, the dent on your reputation isn’t worthwhile, especially when it could have been avoided.

  4. Company morale
    Internally, think of what a criminal investigation and/or public scandal will do to employee morale. Word will spread, injecting shame, ridicule, and embarrassment into an otherwise positive environment. The media might start hounding innocent employees. Internal safety and trust will plummet. Keep your company culture happy and cohesive—and take the proper precautions to guard your code of ethics. 

  5. Leaked insider knowledge
    Finally, companies go to great lengths to defend proprietary information—and competitors pay a high price for insider knowledge. For immoral employees, access to these trade secrets can look like a bonus payday. Companies can try and defend against leaks with legal documents like NDAs, but that’s no barrier for a corrupt employee with the confidence they won’t get caught. And once secrets get out, no amount of legal process will put them back in the bag.


How to Evaluate Candidate Integrity

As these examples illustrate, integrity is the bedrock of company culture and customer confidence in your business. But a candidate’s past can be difficult to uncover using traditional job application methods. No candidate is going to admit to stealing, and because these events aren’t always on the record, they may not show up on background checks. 

Personal and professional references provide insight into employee histories, but these can be falsely inflated—or outright faked. And integrity testing—such as this—isn’t always foolproof. 

So how do you guard your team against a poor hiring decision? 

Luckily, Checkster has solid solutions. Our robust Reference Insights tool is your best bet for sifting through candidates—and making smart hires that won’t bite you in the long term.

Ready to start hiring for integrity? Checkster is here to help. Try out our automated reference check solution here for free.