In the era of remote work, millions of employees have benefited enormously from the autonomy and flexibility that comes from being able to work from wherever. It’s generally seen as a positive change, improving employee engagement levels worldwide. But, as with most things, there’s a downside.
A new, unsettling phenomenon is appearing in the workplace. It’s a new type of employee fraud, where remote workers outsource their jobs to cheaper workers worldwide.
As an employer, it can take a lot of work to spot this practice. After all, the trust you place in your workers means you’re probably not even looking for it. A constantly suspicious boss is a bad boss, but there are ways to prevent this type of fraud without being overly invasive.
What is employee fraud and why is it so bad?
Employee fraud can constitute several different behaviors. In this case, we’re referring to the recent phenomenon of remote workers outsourcing their entire jobs to other people for less pay. In this way, employees can clock out while someone else does their job, before submitting it as their own work without their employer’s knowledge.
This is bad for a number of reasons. For one, it poses a huge security risk for organizations that value their privacy (which is essentially every business on the planet). Confidential documents, files, and data are illegally handed to people that have not signed a non-disclosure agreement, potentially causing serious damage to the company if these fall into the wrong hands.
Employee fraud is particularly detrimental for financial institutions, and many managers could lose their jobs and reputations for even just supervising a fraudster. Outsourcing remote positions in a fraudulent manner can lead to more serious ramifications, such as theft and forgery.
Subtle signs employers should look for
Recent research has revealed that employee and job-candidate fraud is on the rise. Fortunately, there are a number of ways employers can spot potential employee outsourcing fraud within their company.
Not meeting deadlines: From an employer’s perspective, take note of how and when work is being done. If tasks are being submitted at odd times, or if the work is taking unusually long to be completed, it might be a sign of fraud. That said, it could also be a sign of unproductivity or “quiet quitting”, a different phenomenon that can also be detrimental for your company.
Not attending calls and meetings: Other suspicious activity may also be indicative of employee fraud. Workers who often serve up excuses for not jumping on a phone or video call should arouse your suspicions.
Login credentials used outside organization: It’s also worth liaising with your IT department every now and then, as they could uncover some controversial activity from your employees. They may find that their internal credentials are being used to log in from IP addresses in odd locations, or that they constantly forward tasks from their work email to a personal one.
Not all suspicious activity is a sign of employee fraud, but it may still be worth checking in on your employees who seem not quite right or demonstrate unconventional work habits. Bad practices and poor performance could be hurting your profits, and maybe all these employees is some guidance or reassurance through a difficult period.
Why are employees outsourcing their jobs?
Employees that are fraudulently outsourcing their jobs are taking advantage of the current state of the job market. The overwhelming shift to remote work, coupled with the labor market squeeze, has generated room for scammers to deploy their tricks.
Some employees engage in fraudulent activity because they feel they are underqualified for certain roles. They employ people to do their pre-screening assessments for them, only for them to outsource their tasks once they’ve dishonestly acquired the job.
Most scammers hold the right to work in Western countries like the US or Europe, where salaries are relatively high compared to other countries. This means they can then offload their work to people in developing countries where wages are generally lower.
Where is employee fraud most common?
Fortunately, employee fraud of this kind is yet to be described as “commonplace”. However, it can and does affect a number of industries where remote work is prevalent. It’s mostly found in IT sectors, among developers, software engineers, and coders.
Why these sectors particularly? When you hire a developer or coder remotely, you probably assess their skills remotely too, which leaves the process open to abuse. They simply get someone else to do the assessment for them, and then outsource the work once you take them on. Developers and coders are in high demand, and with such a tight labor market scammers aren’t worried about being fired or not being able to find another job.
But employee fraud can affect any company that offers remote positions. While it remains an uncommon phenomenon, it can have huge ramifications for businesses.
Final thoughts on how to prevent employee fraud
This new kind of employee fraud is not yet commonplace, but it is on the rise, and you should be on the lookout for it. Preventing it entirely is not yet possible, but there are a number of things employees can do to ensure their business is as secure and accountable as possible.
It all starts with the hiring process. Companies that hire for remote positions need thorough and rigorous recruitment processes to ensure the person they hire is an honest and respectful worker. It’s also important to identify any underqualified candidates by asking them role-specific questions on top of a pre-employment screening test. Ensure that you do skills testing and assessments in person or if you have to do them remotely make sure you do them ‘live’ over a video call so you can eyeball the person as they’re doing the tests.
As well as this, companies need to issue highly secure devices and systems that reduce the risk of confidential files leaking out. Your IT department needs to create transparency in your remote work operations, allowing managers to see what remote workers are doing, without being too invasive. A tool like Time Doctor, which logs remote employees’ attendance, keeps an audit trail of the apps and websites they use during work hours, and can also take screenshots to show managers what workers are doing, is one way to give yourself greater visibility of your remote workforce.
While the phenomenon of employees fraudulently outsourcing their work is not yet widespread, it does pose a dangerous threat to remote work. Companies should continue to offer flexible work environments; they just need to remain that little bit more vigilant.