Fraud and Corruption – what is the effect on future employment opportunities?
Fraud and corruption are hot topics when it comes to the world of business and governance in South Africa, with employment an important issue in the debates surrounding these issues. As of July 2018, the percentage of the labour force that is unemployed sits at 27,2%; up by 0.5% since the start of the year. A recent survey demonstrated that the majority of today’s youth believe that corruption threatens their employment prospects.
With corruption rampant and financial security threatened, it remains critical to assess and evaluate how corruption and fraud can influence our businesses and future employment opportunities. Fraud within government sectors should also not be overlooked, because when corruption and fraud affect the government, it can have widespread effects on businesses. Service delays, lack of essential services, untrustworthy officials and poor infrastructure can all influence sectors of the financial environment.
Recruitment freezes or retrenchments
As companies experience losses due to fraud and corruption, it inevitably leads to budget cuts, often focused on the employees. This can lead to retrenchments or the freezing of the recruitment process.
When a business or country is perceived to be corrupt or fraudulent, it is likely to influence the investment opportunities for that entity. Corruption, or even rumoured corruption, can lead to shareholders losing trust in the business and dissuade them from investing further or influence them to withdraw their support. Investors aim for stable, reliable investment prospects that they can trust. As investments dwindle, businesses may be unable to retain current employees or to hire recruits.
Inefficiencies in business
When corruption and fraud creep into a business, inefficiency is sure to follow. As corporate corruption makes improper use of the resources available to the company, this often means that these resources are used in functions unrelated to the business activities. Corruption may also mean that bribery takes place in the tendering process, potentially leading to the utilisation of incompetent or unsuitable contractors, thereby damaging the job prospects of competent workers.
The bright side
It’s not all doom and gloom, however; fraud and corruption could even create some indirect positive effects on the world of work, as companies attempt to curb the impact of fraud and corruption. The potential positive outcomes include:
Increased demand for security specialists
As fraud and corruption rise, companies may attempt to curb this by using highly-trained security specialists. This ensures a growing market for a new job sector.
Value of internal audits and risk management realised
Companies may turn to internal auditing and risk management services to monitor and assess corruption and fraud, and to control these processes. Internal audits provide objective assurance to management and the board, by determining whether fraud controls are efficient at identifying fraud risks and whether these controls are functioning effectively. Risk management programmes aim to eradicate fraud and corruption with ongoing risk assessment processes
Fraud and corruption may influence businesses to invest in better cybersecurity and innovative technical solutions aimed at reducing fraud and corruption. Robotics offer companies a novel way to counter fraud and corruption and increase efficiency and controls. This could mean that job prospects in this sector are benefited.
It is clear that fraud and corruption pose significant dangers to business and the employment chances of jobseekers. Proper and professional recruitment plays a vital part in ensuring that companies employ ethical and experienced employees.
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