Have you ever been to a movie where a gangster talks about having a job they never have to go to? When your risk management team talks to you about ghost employees, that’s an example of what they mean. Of course, as World Wide points out in their resource on the subject, that’s only one way they can show up. Ghosts can also be completely fabricated individuals whose paychecks are diverted via direct deposit to accounts that a single fraudster can then pick up later. While it’s hard to imagine nonexistent employees going undetected for long, even small businesses are susceptible to these issues.
How To Protect Your Business
The only way to make sure every employee on your books is genuine, you need diligent oversight that reconciles those records on an ongoing basis. That can be expensive, and it costs more the more employees there are to track. Most businesses use a combination of audits to check for fraud periodically and insurance solutions that cover fiduciary liability, embezzlement, and other losses that can come about from fraud in their HR or bookkeeping offices. This balanced approach to risk management requires fine-tuning to get the right combination of financial protections and oversight activities. Working with a provider committed to customer education is a great way to get that fine-tuning right for your company.