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With organisations’ growing reliance on contract labour, preventing labour fraud has become a significant challenge for many HR and talent procurement teams. Organisations must be vigilant in preventing fraudulent activities that can negatively impact their bottom line. It’s estimated that 57% of fraud is committed by company insiders or a combination of insiders and outsiders. This can take many forms, from fake identities to hiring manager timesheet errors and bogus invoicing, costing companies millions. A 2022 occupational fraud report from the Association of Certified Fraud Examiners (ACFE) revealed that more than $4.7 trillion is lost annually to occupational fraud worldwide.
The consequences of these fraudulent acts can negatively impact the overall reputation of organisations and have considerable financial implications. Managing fraud at an organisational level can be complicated, and it’s something that employers need to take seriously. Fortunately, there are ways to identify and prevent contract labour fraud. In
Pontoon’s case, our Business Intelligence Advisory (BI) teams use data analytics and raw transactional data from the Vendor Management Systems (VMS) to help clients proactively address fraudulent worker activities, which is increasingly critical in today’s fast-paced and ever-changing business environment.
Since any organisation’s integrity and financial stability are essential, taking a preemptive approach to contractor fraud with data analytics can play a crucial role. Below we discuss a few ways that employers can prevent contract labour fraud and the long-term benefits of working with a Managed Service Provider (MSP) to leverage actionable data analytics.
Identifying fraudulent behaviour with MSP analytics
Leveraging enhanced data analytics to identify fraudulent behaviour is a significant benefit of working with a contingent labour recruitment partner. Business Intelligence Advisory teams, equipped with advanced tools and expertise, play a crucial role in analysing large volumes of data to identify patterns and variances that could indicate fraudulent behaviour. These advisors and consultants bring data to life. They’re like expert storytellers who provide in-depth insights into your contingent labour programmes.
Below are just some benefits of the tools used by Pontoon’s data investigators:
Gathering and tracking data in this meticulous way will also give organisations a “predictive toolkit” to catch fraudsters before they can further exploit opportunities to commit more fraud. Using the techniques and tools mentioned above, our programme-focused BI Advisors help clients feel confident that their business is safe and secure.
MSP intelligence personnel use data analytics to help organisations maintain compliance. They provide essential information to monitor worker compliance challenges and adherence to local labour laws and regulations.
For instance, by analysing worker data related to “bonus” or overtime payments, organisations can understand the demand intensity for additional work-related expenses in different departments and roles. This information can target efforts to recruit additional labour within compliance guidelines while reducing the cost of miscellaneous payments.
This helps organisations avoid legal and financial penalties and enhances their reputation as compliant employers. With the help of MSP data analytics, organisations can focus on their core business activities while being assured that their contract labour is compliant and fraud-free.
While fraud detection mechanisms are crucial, preventive measures are equally important. Here are some crucial measures organisations should consider implementing:
As the MSP of choice, Pontoon can play a significant role in helping your organisation identify and mitigate fraud in contract workforce programmes. We bring expertise in managing contingent workforces and have robust systems and processes in place to address fraud detection and prevention.
Intuitive and user-friendly dashboards
Intuitive and user-friendly dashboards are essential for managers and HR professionals in identifying patterns, processes, and data-driven insights that can prevent fraud.
Dashboards, provided by BI teams, can be used to track employee hours and expenses, enabling the client to detect any discrepancies that could indicate potential fraud. By quickly pinpointing inconsistencies or anomalies, managers can take action to address them. Dashboards can also monitor compliance levels, making it easier to prevent fraud and other violations of local labour laws and regulations. With the correct data that tells the entire story, decision-makers can quickly identify issues and make informed choices that help prevent fraud.
Pontoon teams leverage these dashboards to identify potential bottlenecks from various perspectives. At first glance, the data might look meaningless, but through the expert eyes of our BI Advisory teams, we can spot potential red flags. Dashboards help us better understand customer data and the specifics of their business, which is key to success.
MSP data analytics for increased spend visibility
One of the critical benefits of MSP data analytics is that it increases spend visibility for clients. BI teams provide complete transparency into client recruitment and labour spend. This includes insights into which suppliers are leveraged, which roles are being filled and how much is spent on each contractor.
BI Advisory teams also advise on prevalent market pay and bill rates for the organisation’s job titles, regions and cities, providing competitive leverage. This level of visibility enables clients to work with intelligence teams to quickly detect any anomalies or discrepancies in rate cards and the overall contract labour process. Most importantly, clients can make better and more informed business decisions armed with this data.
Working with an MSP can be a great preventative measure against fraudulent behaviour. The business intelligence team within an MSP provides the insight, skill, and tools for your organisation to harness the power of data analytics in identifying patterns that may indicate fraudulent activity. By collaborating with supplier partners and tracking worker hours against job schedules and invoices, organisations can have a more comprehensive picture of where fraud could occur.
As contract labour becomes increasingly popular, vigilance is vital in having trustworthy watchful eyes as new opportunities arise. If your organisation is looking to enhance compliance and identify fraudulent behaviour in your contract workforce programmes, it’s time to partner with an MSP like Pontoon.