Fraud Alleged at Red Cross Call Centers
Steph and I have returned from our December holidays, my little MagicPotHeads, and while we’re all recovering from our holiday food comas, here’s something sure to sap the holiday spirit right out of you.
Fifty people have been indicted in connection with a scheme to defraud the Red Cross out of thousands upon thousands of dollars of aid meant for Katrina victims. Nice, huh?
What does this have to do with the Magic Pot of Jobs, you ask? The workers involved in the fraud weren’t Red Cross employees, they weren’t volunteer aid workers, they were temporary employees contract and subcontracted through Spherion, a major staffing company.
The fraud went like this: Usually, the Red Cross is either setting up shelters or meeting individually with disaster victims to determine what kind of immediate monetary aid is needed. But in this case, there were so many evacuees being sent so many places, that the old methods weren’t going to work. So they contracted out to 2XCL of North Carolina, which provides both consulting and staffing services, but isn’t large enough to staff call centers of that magnitude. 2XCL contracted out to Spherion, which is large enough to provide the people, but generally won’t build the call center for you.
The Spherion temporary employees found ways to exploit weaknesses in the process to divert funds for themselves and took claim numbers to Western Unions near their homes to pick up the funds. The Red Cross noticed the fraud when they saw how many pickups were being made in areas where there were few evacuees.
None of this should be construed as a slam on 2XCL or Spherion. The realities of the situation of hiring large numbers of temporary staff for relatively low-skill, low-wage work are these:
- Temp agencies deal in people who don’t have permanent jobs. Most of them are wonderful people who just need some more experience and skills before getting a regular job, or people who just prefer to temp, but the unpleasant fact is that there are going to be some people who don’t have jobs because they are less attractive as employees.
- In an emergency situation like this, there’s just less time to screen each individual applicant to avoid hiring these undesirable employees. You can run criminal background checks on each of them, but they don’t always turn up relevant information.
- If a system can be abused, it will be. Some people are dishonest, and some people just don’t see how that sort of thing harms others.
So, what can employers who need large-scale projects like this do to get the best results?
- Require criminal background screenings for all talent placed. They’re worth the money and don’t delay the process too much. They don’t filter everything out, but they’ll filter out anyone who already has a record.
- Try to contract with staffing services who have a large presence in the geographical areas where you need the people. They’ll likely already have a good talent pool that they know well to start while they try to get you some more.
- If you have to contract with a consulting provider to help put something like a call center together, they probably won’t have an extensive staffing practice. So when you negotiate what you’ll pay for individual employees, negotiate a low markup rather than a low hourly rate. If you negotiate a low hourly rate, your contractor’s markup as well as the subcontractors’ markups have to go into that number, potentially leaving a very low pay rate for the employees. Low pay rates mean that higher-caliber employees won’t want to take the positions, preferring take assignments that pay in line with their skills. When the pay rates are artificially low, you tend to get employees who can’t get better paying jobs. When bill rates are artificially low, there is less incentive for the subcontractor to encourage their best people to take your assignment, and they’ll send those people where they can bill higher rates. Negotiating a lower markup for the contractor means you free up the subcontractor to pay and bill rates that are more in line with the market, and you’ll get better employees out of the deal.