The 8 behavioural red flags HR should look for to help spot corruption

HR data corruption

HR needs to take a more proactive role in combating corruption in their organisations, according to the NSW Independent Commission Against Corruption (ICAC), which said there are a number of specific behavioural “red flags” that could indicate corrupt conduct.

Recent ICAC investigations have shown that many employees who get a job based on a false CV, go on to engage in more serious forms of corruption such as misappropriation of public funds.

“Our advice is that HR teams need to play a key role in setting an organisational framework that detects and acts on CV fraud,” said Lewis Rangott, executive director of corruption prevention for ICAC.

HR also needs a seat at the table when it comes to screening contractors and labour hire staff, added Rangott.

“Engagement of contract staff is more likely to be classified as procurement rather than recruitment, which can mean that proper screening procedures are missed,” he said.

“Among other things, HR should ensure that recruitment and labour hire firms are properly vetting their own candidates.”

ICAC sometimes discovers that staff who have engaged in serious misconduct have been allowed to resign from an organisation (or worse, transferred to another unit or given a redundancy payment), said Rangott.

“A failure to take proportionate disciplinary action against misconduct sends a signal to the rest of the workforce that misconduct is tolerated,” he said.

“In addition, if the evidence of misconduct is not recorded, any future employer conducting a service history check will probably be provided with misleading information.”

“A failure to take proportionate disciplinary action against misconduct sends a signal to the rest of the workforce that misconduct is tolerated”

A recent ICAC report on trends in corruption and integrity in the NSW public sector found the public sector should be wary of risks associated with blurred lines between government and non-government sectors, badly-managed organisational change, and rules that unintentionally can encourage corrupt conduct.

Corruption and integrity in the NSW public sector: an assessment of current trends and events takes stock after nearly 30 years of ICAC operations of the nature of corruption and integrity in the NSW public sector.

The report also identified a potential relationship between corrupt conduct and organisational change, with a number of investigations showing opportunities for such conduct can arise either during or after a period of organisational change.

“First, we’ve noticed a relationship between poorly planned/executed organisational change and corrupt conduct,” said Rangott.

“During periods of intense change, we sometimes see that existing internal controls (including basic managerial supervision) are undermined or just seem to disappear.”

When the organisation has to keep delivering business-as-usual public services during a transformation, Rangott said it can be easy for an opportunistic person to take advantage of the pressure and chaos.

“Secondly, we think that managers could be better attuned to the unintended consequences of goal-setting,” he said.

“This includes informal cues and formal KPIs that might drive the wrong behaviour.”

“Employees or contractors are more likely to clam up if they perceive that their concerns won’t be taken seriously or that management will ‘shoot the messenger’”

Thirdly, Rangott said the behaviour of leaders plays a key role in determining whether or not staff will speak up about potential wrongdoing.

“Employees or contractors are more likely to clam up if they perceive that their concerns won’t be taken seriously or that management will ‘shoot the messenger’,” he said.

The report highlighted a number of behavioural and other red flags that could indicate corrupt behaviour

  1. Hiding information from, or not cooperating with, internal audit
  2. Passive disobedience such as promising to deal with a matter and then not following through
  3. Refusing to share work or inform team members
  4. Failing to create records or deleting records
  5. Refusing to take leave
  6. Not accounting for whereabouts
  7. Bullying and harassing staff
  8. Consuming alcohol or drugs at work.

“In many ways, it is more productive to look for risky situations than risky people,” said Rangott.

“We encourage managers to be wary of situations where individuals have the ability to exercise unilateral control over key decisions.”