by Jenny Reid
South Africa is grappling with a significant surge in white-collar crime, underscoring the urgent need for robust employee screening practices. The recently released second-quarter crime statistics for July to September 2024 revealed an 18.5% spike in commercial crime incidents compared to the same period in 2023. This alarming increase, from 30,630 to 36,300 cases, highlights the highest surge recorded this year.
While crimes such as murder, sexual offences, and robberies have seen a decrease, white-collar crime continues to escalate. Experts like David Loxton, CEO of Loxton Forensics, caution that the actual numbers are likely much higher due to widespread underreporting. Many organisations hesitate to report such crimes, fearing reputational damage or doubting the effectiveness of law enforcement in addressing these issues.
For HR industry leaders, these statistics are a stark reminder of employee screening checks' critical role in safeguarding organisations. The rise in white-collar crime stems from a broader increase in lawlessness, exacerbated by systemic challenges such as South Africa’s skills crisis and a shortage of adequately resourced detectives within the South African Police Service (SAPS).
Underfunding critical institutions and a mass exodus of skilled professionals to the private sector has left law enforcement ill-equipped to effectively combat commercial crimes. Consequently, organisations must proactively protect themselves by adopting rigorous screening processes during recruitment to mitigate potential risks.
Several factors contribute to the escalating levels of commercial crime:
Lawlessness Across Society: The increase in minor offences has translated into a permissive environment for high-profile white-collar crimes.
Underreporting: Fear of reputational harm and distrust in law enforcement’s ability to act discourage companies from reporting crimes.
Whistle-blower Risks: The lack of protection for whistle-blowers, who are essential in exposing corruption, further undermines efforts to address commercial crime.
Ethics in Auditing: Concerns about long-term relationships between external auditors and companies highlight potential conflicts of interest.
Technological Gaps: The slow adoption of artificial intelligence (AI) in auditing leaves room for errors and inefficiencies.
Employee screening is an essential first line of defence for organisations seeking to prevent fraud, embezzlement, and other white-collar crimes. By thoroughly vetting potential hires, HR leaders can identify red flags such as falsified credentials, criminal histories, or unethical behaviour in previous roles.
Sonya Skipp, CEO of the leading employee screening company, iFacts, says that implementing a robust screening process can include:
Criminal Background Checks: Ensure candidates have not been convicted of fraud or theft. She cautions that with the low rate of conviction, this is no guarantee that the individual does not have criminal intentions.
Verification of Qualifications: Confirm the authenticity of academic and professional credentials.
Reference Checks: Gather insights from past employers regarding a candidate’s integrity and work ethic.
Credit Checks: Identify financial distress, which can be a motivator for fraudulent behaviour.
The rise in white-collar crime is not just a legal issue; it is a business imperative that demands immediate attention from HR leaders. By prioritising employee screening checks, organisations can:
Protect their assets and reputation.
Build a trustworthy and reliable workforce.
Contribute to a broader culture of integrity in South Africa’s business landscape.
In a challenging economic and social environment, proactive measures like employee screening are not optional but essential. HR leaders have a pivotal role in safeguarding their organizations and contributing to the fight against white-collar crime. Together, through vigilance and innovation, South Africa’s business community can turn the tide against this growing threat.
Jenny Reid is a Human Risk Expert and Professional Speaker, and the owner of iFacts based in South Africa, a specialist employee screening and vetting service. She is constantly assessing new and innovative ways to remove the people risk in any organisation. Since 2009 when she took over iFacts completely, she has seen the company double in size and hopes to continue this growth. iFacts specializes in employee Screening, risk assessments, employee wellness, investigations, and truth verification. Jenny is a past President of the Security Association of South Africa. Contact Jenni via email jenny@ifacts.co.za
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