We’re increasingly becoming a nation of criminals and our workplaces are paying the price, recent studies reveal. Given that fraud alone cost UK firms almost £1bn last year, is it an operational disaster to recruit candidates with a record of crimes against the employer? Sarah Fletcher asked members of HR Zone and sister site AccountingWEB how to successfully employ individuals with convictions for low level crime.

Crimes committed by staff against their employer are rapidly growing. The number of organisations reporting employee fraud leapt by more than 30 per cent in 2005 at a cost to UK business of almost £1bn, according to accountancy firm BDO Stoy Hayward. The TUC argues in its report Employment and ex-offenders that workers with a spent conviction are often more loyal and committed to the organisation than their colleagues; but given that employee crime is so expensive for business, what steps should firms take to minimise the risk of re-offending from employees with a history of such misconduct against the employer?

Risk assessment
As the business risk of employing an ex-offender depends on how the conviction may affect the operational needs of the organisation, the company must conduct a risk assessment based upon its own requirements and how likely it feels are the candidate’s chances of re-offending.

Training consultant Paul Abbott argues that a conviction does not necessarily mean the individual cannot become a model employee, but given that there are others “who cannot resist when temptation is put in their way [who] despite protestations to the contrary, will steal again if the situation arose” the employer must decide this at interview: “If you don’t trust the prospective employee in the first place don’t take them on. A working relationship must be one where trust can be given.”

Although the TUC claims any conviction should automatically bar an individual from employment, HR Zone and AccountingWEB members universally agreed that a fraud conviction should block the worker from handling any financial matters. HR director Rosemarie Loft argues:

“If someone has a recent history (as in they’ve just been released) of a crime, then it is normal to assume that you don’t put them in an area where there is a higher risk of repeating the offence. So, [in the case of] fraud, you don’t put them back in a position where fraud can be committed.”

According to Abbott, providing the temptation to re-offend is a practical form of risk assessment: “The judgement call is to either remove temptation or opportunity from their grasp, or place a little in front of them and let them earn the trust.”

David Winch, director of Accounting Evidence, forensic accountants specialising in crime and proceeds of crime, says financial crimes should not automatically block the individual from a related job (although as AccountingWEB member Abdul Qayyum notes, a qualified accountant would be automatically expelled from membership if convicted of a criminal offence) but risk management and proper supervision is crucial:

“A convicted person acting as an employee of an accountancy firm who was properly supervised and did not handle money would not appear to be a serious risk. Again, would a person who over-stated his own income to get a mortgage pose as much risk as a cashier who falsified records and stole cash through teeming and lading?”

Performance monitoring
Tim Edwards, managing director of Cahro consultancy, argues that regular performance monitoring is an essential business requirement for all employees and should not differ when dealing with an ex-offender. However, is it realistic to suggest the organisation “should be aware of the temptation of re-offending but not monitor it specifically”? If a fraud conviction means the employer must keep this individual away from aspects of the business where financial crime could be committed, this requires added resources, surveillance and the possible readjustment of roles of other employees to incorporate this.

However, Loft claims monitoring the ex-offender can damage the individual’s ability to integrate into the workforce, potentially creating added costs for recruiting a replacement if they resign. “[This] tends to be one of the most significant reasons for the employment relationship to fail and for the ex-offender to fail to successfully retain employment – You will hear it a lot from probation officers that their clients felt discriminated against and others treated them as though they were going to commit crimes all the time,” she says.

Do employees have a right to know?
Members are divided on whether other staff – and even the HR department – should be informed of an employee’s criminal record. Have ex-offenders forfeited their right to confidentiality due to their previous security risk to business? “If you hire an ex-offender then they have the same rights as any non-offending employee,” argues Edwards. “Maintain parity and fairness. You have the right to hire, therefore you are aware of their personal circumstances at this point.”

In an operational sense, the business will run more smoothly if employee relationships are strong, which can be harmed if a criminal record is publicised to other staff. Interim manager Iain Young says: “I have had ex-offender in the workforce before and the policy we operated was that only HR and senior manager was aware of the individual’s previous history. It was then down to the employee to build the confidence of his fellow employees. When they did find out he had a criminal record for car theft he had built up the trust of his fellow employees and they let things lie.”

Choosing a policy of confidentiality also protects the ex-offender from being exploited by other employees, argues Loft. “I did know of an instance where colleagues were told that a new employee had previously done time; two or three of the existing staff decided to steal items from stock and made sure that it was when he was on duty, so it would automatically look like he did it. He did end up getting suspended, but then another colleague informed as she had seen what had been going on (but not cut in on the deal!).”

However, keeping the information confidential can result in the rather unfortunate situation of poison in your tea (it doesn’t add much to the flavour). Loft adds: “Of course, the most notorious case was of a Graham Young, former poisoner and ex-Broadmoor prisoner, who was given a job as a tea boy as part of his job… Yes, he poisoned two of his colleagues for whom he made the tea…”