Friday Rant: Apple & Beyond – Hiring the Right People to Preclude Procurement Fraud

Procurement fraud is a topic that continues to gain increasing attention, albeit in a quiet sort of way. I am hearing about it more and more, from headline grabbing stories such as this one highlighting employee fraud and IP theft at Apple, to examples I can't share on these virtual pages. Many have been dealt with by quiet firings and dismissals at some very large global companies. All of which begs the question: Are we sufficiently vetting personal ethics in the hiring process when it comes to bringing the right types of people into procurement? Or has our recent emphasis on hard skill-sets and analytical rigor led to a Bill Bennet-style moral decline in values within our staff and teams? Politics and hypocrites aside, I'm not entirely sure. While I know procurement fraud has always existed, I can't help but wonder if we're not looking for the right types of people in the first place.

How can we screen for potential employee's ethics and values when one's past record appears clean? I've outlined a couple of ideas below and am sure they will be controversial. But they're far better than doing nothing when traditional methods have failed to reveal potential red flags among corrupt procurement practitioners:

1) Look at potential employee's participation in extra-curricular activities that can offer a window on their moral sense of purpose and community involvement -- giving of one's time and energy for the greater good. Here, it is critical to not just look at the check box on financial contributions or executive board level involvement in a non-profit, but actual interest and participation in a cause that promotes a higher human or spiritual condition.

2) In the case of recent grads, check out their college or university honor code and formally inquire if the candidate was ever involved in cheating or plagiarism. If they had the opportunity to engage in theft or fraudulent activities in the past and did not, it's at least one indicator that they probably won't do it in the future. Rigorous reference checks are critical here. I was recently privy to an FBI personal reference interview that was part of the vetting process for a candidate for Agent who is an old friend. When you're down to the final heat of candidates, paying for this type of service could be dollars well spent -- sound corporate moral fiber is at least as important as honest law enforcement.

3) Look for financial stability and potential employees who do not live beyond their means. Receiving permission to access a candidate's credit report is essential. The report need not be stellar and can also provide insightful follow-up talking points. Financial pressure can lead employees to a breaking point when it comes to engaging in behavior that they might not otherwise consider. Hiring "the Millionaire next door" who drives a 10 year old beater might be less corruptible than the candidate who shows up in a new BMW.

4) Ask the candidate for access to their social networking pages. If he or she doesn't appreciate the financial responsibility with which they will be entrusted and balks at this request, that in itself is telling. How one comports themselves with friends and peers can provide a great deal of insight into one's propensity or aversion to taking risks as well as their self-esteem and respect.

None of these suggestions are fool proof on their own or in aggregate. And yes, they are all an invasion of privacy. But perhaps their greatest value may be found in the candidate's response to the process. If the overall risk to the corporation or institution that is inherent in a position of great responsibility is explained to the applicant at the point of entry for candidacy, an upstanding person ought not object to being thoroughly vetted. This is especially true in procurement where the position will inevitably require the employee to apply the same degree of scrutiny to suppliers.

- Jason Busch