Do you really know who you are employing?

Fidelity Guarantee cover can provide an indemnity should you suffer a theft of money or goods by your employees subject to the terms and limits of your individual policy. With the economic downturn we have seen the number of Fidelity Guarantee claims submitted increase sharply.  In 2011 we received a total of 2 claims for theft by employees.  We are now taking notification of these claims at the rate of at least one a week.

Unfortunately these thefts are usually carried out by long standing, trusted employees and it is therefore vital that you and your colleagues are vigilant.   Many of the losses are ongoing for a period of time, often years and can be very substantial amounts of money.

We have included below our top tips to protect your business:

  1. Obtain references for all new members of staff.  Such references should be obtained directly from former employers for the three years immediately preceding engagement and before the employee is entrusted without supervision. Communicate with referees via email where possible and authenticate the company they work for by two methods i.e.. Check for a website /phone the landline given/look up referee on Linkedin/Facebook, record how authentication is carried out and by whom
  1. A written record of any verbal reference should be made at the time it is obtained.  This should be signed and dated by the person obtaining the reference and confirm who at the former employers you have spoken to and their position, again authenticate the identity of the referee
  1. In respect of employees joining directly from school or government sponsored youth training schemes one character reference should be obtained, and one reference from the educational institute and again authenticate
  1. Money should be banked regularly and receipts should be reconciled with bank statements.  Ideally the reconciliation and banking should be done by two different people. Have a process of reconciliation before putting money in the safe and ideally have this checked off by a more senior member of staff. Reconcile safe contents at either the end of the night or the next morning. Have the safe/counting room covered by  CCTV
  1. Cheques over a certain limit should be signed by more than one person. (You should check you policy wording as this will indicate the relevant limit).
  1. An independent stock take should take place regularly. (You should check you policy wording as this will indicate the required frequency).
  1. Some policies even insist that all employees who have any responsibility for money or stock take two weeks uninterrupted holiday each year.   It is very easy for an employee to cover their tracks if nobody else is ever involved in the banking, stocktaking or reconciling.

Quick tips

  1. Obtain criminal record checks for staff handling cash, this can be obtained by the employee before they start at their own cost of £12
  2. Performing a credit check is quick and easy
  3. Complete right to work in the UK checks and authenticate documents
  4. Record physical and  identifying features on application forms or personnel records i.e. birthmarks/tattoos – this helps during CCTV footage investigations