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Top 5 Reasons Why Screening Third Party Supplier Employees Is A Must

3rd August 2018

Nowadays there is a huge trend for outsourcing as organisations look for cost savings, efficiency gains and generally less internal hassle. Contractors, temporary staff, catering and facilities people, engineers – they all work via third party suppliers to support companies in the day to day running of their business.

Organisations that screen their permanent employees often don’t extend that process to their third party employees – and this could be a big mistake.

Failing to screen third party employees to the same level as permanent staff can increase risk on many levels – from securing data properly, to protecting staff and even managing brand reputation. Businesses that use third party suppliers need to be confident that subcontractors are reputable, that suppliers are following best practice on screening their own employees and that they are compliant. An example is the Modern Slavery Act (MSA) 2015 which is one area that drives the need for businesses to be certain that suppliers are demonstrating significantly increased compliance with supply chain management practice. The advisory website “Know The Chain” says ‘Companies are increasingly being held responsible for the conditions under which people labour within their supply chains’. Third party screening is also advised by the Financial Conduct Authority who say in their 2016 report “Outsourcing to a third party does not mean you have outsourced your obligations to look after customer data. Therefore, you should carry out due diligence on third-party suppliers before hiring them, try to establish what their vetting procedures are, and ensure that they respect your firm’s security arrangements.”

PWC even go as far as to state this is one of a company’s biggest “blind spots” when it comes to fraud, in their latest Global Economic Crime & Fraud Survey, saying “However, one of a company’s biggest fraud blind spots – and biggest threats – is often not to do with its employees, but rather the people it does business with. These are the third parties with whom companies have regular and profitable relationships: agents, vendors, shared service providers and customers. In other words, the people and organisations with whom a certain degree of mutual trust is expected, but who may actually be stealing from the company,”

Here are our top 5 reasons why screening third party suppliers is a must.

1)    Managing The Undeniable Risk

Subcontractors, engineers and other third party employees often have access to all areas of your building, offices, staff and data. If they are not properly vetted, there is a huge risk to the business on many levels, from fraud to stealing data.

Some people with dubious backgrounds deliberately target those industries that are known not to be checked. Therefore, it is vital organisations ensure their third party suppliers and agencies either comply with best practice on screening their own employees, to your corporate standards, or otherwise allow you to screen them via your own processes.

2)    Protecting Permanent Staff

Since third party employees work daily alongside your own permanent employees, companies have a duty of care to those working within the business and to the third party staff. Both parties need to be protected within a safe working environment. If third parties are not properly screened, or background checks are not done, organisations are putting employees at unnecessary risk. Criminal record checking ensures people with violent backgrounds, for example, are not brought into the business. Likewise, those with records for stealing or other such crimes would be screened out of the recruitment process. If these things are missed, staff from both parties are being put at risk.

3)    Guarding Brand Reputation

Clearly brand reputation is another element at stake here. Employees are brand advocates – they represent the business and all it stands for and display qualities that hopefully match with the brand ethos. Therefore, it’s vital that third party employees, who are themselves representing the business, should be screened to the same level as permanent employees. An organisation’s competitive edge may be compromised if sensitive data is leaked to competitors and also if customer or staff data is hacked, stolen or made publicly available when it shouldn’t be.

4)    Ensuring Full Compliance

In some industries employee screening is a requirement of compliance and regulation. If organisations have an obligation to be compliant, they MUST ensure their third party suppliers are too. This is sometimes a loop hole that is missed but it’s vital to ensure those suppliers have robust screening programmes in place, AND that they meet the company’s own screening standards.

5)    Choosing The Right Suppliers

Screening third party employees will help organisations make well-informed and confident decisions when selecting prospective partners or suppliers. Every point mentioned already in this article wraps up into the choice of supplier and whether they minimise these risks. It’s important to negotiate up front so that all parties agree on screening methods that mirror the company’s hiring policy for permanent employees. These terms should be discussed at the start of a business relationship so that safety on all fronts is always top priority and any threats to the workplace environment are minimised.

When screening third party employees, it’s important to realise that “one size does not fit all”. The energy expended on a background check should fit the position being filled to ensure the most efficient process for both company and employee. A freelance IT specialist, for example, has access to proprietary information and the life blood data of the company. In this case clearly a full screen would be needed to minimise risk. Whereas a cleaner may require a different approach and level of checking.

Organisations need to find a delicate balance when it comes to third party screening – and that is no easy task with so many people, processes, risks, costs and sometimes laws involved. A good screening company should be able to help you navigate these unchartered waters. The result would be a robust screening programme that ultimately protects the business and its employees across every aspect.