Experts claim that up to 10% of revenue related to human resources may be lost due to operational abuse. In many senses, ordinary employees present the biggest risk of fraud to business owners and leaders.

Without a doubt, many of us understand that this fraudulence can happen to any company, but not everyone can visualize to what extent. Every business must have policies in place and a strategic roadmap to protect its core assets. Such measures may include:

• Manual: Defining exact responsibilities for individuals or managers with sufficient intrusiveness to detect suspicious behavior.
• Automated: Providing and installing up-to-date and genuine automation programs and solutions that target fraud.

Data analytics is the most effective means for both detecting and preventing fraud because even subtle evidence can be uncovered. Early identification can help organizations track waste and abuse as well as fraud.

Employees may have some indicators that are correlated with fraud. The prevailing risk factors are financial pressures, addiction, lifestyle demands, or other significant personal problems.

Many CEOs and employers simply rely on audits after fraud has already occurred rather than trying to prevent it in the first place. It's far better to remain in prevention space and avoid becoming a reactive organization that only responds after damage has occurred.

This is an example of how we managed to investigate a case of fraudulent activity in Human Resources through our anti-fraud Evinent Analytics platform.

Case Study in HR

Our customer – a large company – asked us to explore a puzzling situation. In this instance, a group of HR managers were asked by the customer to find appropriate candidates for defined positions.

The bizarre result was that this task was suspended as HR managers could not find appropriate candidates. A few months later, they tried to close these positions, but no one was actually hired, which greatly confused our customer. This company asked us to help them analyze what was wrong with their workflow or if the error was due to a decision-making process.

By applying Machine Learning algorithms, we were able to see that some positions were closed much sooner than usual. When we started exploring deeper on these particular positions, we noticed that their lifetime, meaning the moment inquiries were published on any online headhunting resource to the moment they were closed, was much shorter than usual. We reported our findings to the customer. With the help of our report, their security investigated and found that these managers were not filling positions and closing them anyway to improve their performance ratings.

Employee assistance programs, internal training programs, and careful monitoring are crucial measures to manage the various external pressures facing employees.

However, even the best strategies won't succeed if you don't establish a long-lasting policy. Developing procedures ensures that processes are understood and implemented as a rule. Implementing fraud prevention standards in Human Resources improves economic outcomes by identifying signs of suspicious behavior or employees with personal risk factors.