resume-fraud

How Resume Fraud Costs U.S. Businesses Millions

Whether you are a small company or large - is it worth reality checking your employees?

The answer is yes.

Here’s why:

  • According to Steven Levitt, Economics professor and co-author of Freakonomics, stated more than 50% of people lie on their resumes. Billions of dollars lost due to embezzlement. [1][4]
  • In a 2012 study, SHRM reported that 53% of resumes and job applications contained falsifications. [2]
  • ADP listed 53% of people (up from 46%, see Brian Williams article) lie on resumes. [3]

What is resume fraud?

The Society for Human Resource Managers (SHRM) defines resume fraud as a "job seekers’ intentional inclusion of false information (fabrication), overstatement of otherwise accurate information (embellishment), or omission of relevant information (omission) on resumes in an effort to deceive.

What is the cost to U.S. Businesses?

  • Employee theft: 75% of workers steal from the workplace [4]
  • Embezzlement: Billions of dollars lost from bad employees [4]
  • Internal theft: is much more prevalent than external [4]
  • Business failure: one-third of business failures are attributed to employee theft [4]

All-Stars” who got caught:

Name: Scott Thompson
Occupation: Chief Executive Officer
Company: Yahoo!

Story: Ex-CEO Scott Thompson was fired from Yahoo! When activist investor Dan Loeb notified the board of Yahoo! that he, in fact, did not hold 1 of the 2 degrees he listed on his resume. Scott Thompson claimed he graduated from Stonehill College with a degree in accounting and computer science. This was a lie. Scott only held a degree in accounting.  Yahoo! replaced Scott that same year.

Cost: $7 million kept, $20 million forfeited (These numbers are just his package, does not include what value Yahoo! lost). [5]

Name: George O’Leary
Occupation: Head Football Coach
Company/Institution: University of Notre Dame

Story: George O’Leary resigned from Notre Dame as head coach after just five days of being hired. In 2001, O’Leary admitted to false information found on his resume. The uncovering of false information included education and athletic accomplishments. O’Leary claimed he earned a master’s degree from NYU which turned out to be a lie. O’Leary also indicated he had three varsity letters in football from the University of New Hampshire.

Cost: Reputation of the University of Notre Dame and Alumni

Name: Marilee Jones
Occupation: Dean of Admissions
Company/Institution: MIT, Massachusetts Institute of Technology

Story: Marilee Jones resigned after roughly three decades when news of fabricating her own education credentials became aware. This may as well be the definition of irony.  Jones listed on her resume she had three degrees- when in fact she had none. After this came to light and causing a frenzy in the admissions department, Jones felt it was time to end her 28-year lie and leave the school.

Cost: Reputation of the admissions process and department at MIT

Name: Kenneth Lonchar
Occupation: Chief Financial Officer
Company: Veritas Software Corp.

Story: Ex-CFO Kenneth Lonchar helped inflate the value of a $30 million licensing agreement with AOL (Law360). In 2002, it came to light that Lonchar padded his academic credentials. Lonchar claimed he had an MBA from Stanford, turns out he did not hold an MBA from any school. Lonchar’s activities within Veritas cost the company millions of dollars in penalties and disgorgement.

Cost: More than $31 million netted in penalties and disgorgement. [6] [7]

Bottom line, people are lying on their resumes and it is increasing every year. Reality check your applicant’s resume! If a person lists a job, degree, or experience on their resume, even if it is not required for the job they are applying, verify it. If an applicant is willing to “exaggerate” about any of this, what else will he “exaggerate” about?

Sources:
[1] Steven Levitt Resume Fraud Source
[2] SHRM Statistic Source
[3] ADP Statistic Source
[4] US Commerce Statistics
[5] Scott Thompson 7 Million
[6] Veritas Scandal & Settlement
[7] Lonchar Education Credentials

Share this: