Detecting ghosts among your workforce

Fixing the ghost worker problem.

Johannesburg, 29 Mar 2019
Read time 4min 30sec
Katekani Hlabathi, CIO at LAWtrust.
Katekani Hlabathi, CIO at LAWtrust.

Scaling back workforces is a double-edged sword. Not only is there the risk of push-back and demoralisation, but providing early retirement can see many skilled people leaving the workplace. Yet human labour is routinely one of the highest costs in an organisation and, when efficiency's demands can no longer be ignored, staff reductions are often unavoidable.

Another major workforce is often overlooked and this workforce should all be fired. But because they hide in the complex environment of large organisations, these ghost workers often go unnoticed.

Giant workforce doing nothing

"Exact figures aren't always available because adding ghost workers is not legal. Thus, such activities try to remain hidden," says Katekani Hlabathi, chief information officer at LAWtrust, an Etion company. "But it's a serious problem. In 2017, a local provincial department discovered ghost worker costs in excess of R19 billion in salaries. This is a problem in many developing economies."

Ghost workers are essentially people on the payroll who aren't actually at the organisation itself. These can be individuals loaded on by others or ones with entirely fake identities. Often done at lower levels, ghost workers have confounded leaders across the public and private sectors. In 2007, one of South Africa's provinces undertook a major clean-up operation to remove ghost workers, yet the problem persists there today. Why?

Even though there is an emphasis at the top to clean house, matters are more opaque closer to the ground, where this kind of corruption happens. And it should be clear: ghost workers are a type of fraud, one that costs institutions and countries untold billions.

Perpetrators take advantage of fractured systems within an organisation, as Hlabathi explains: "A large enterprise, such as a public sector department, has many disparate systems that don't talk to each other. Some are computerised, but there are also paper processes in there. This creates a lot of oversight gaps used to add people who are not meant to be there."

Tackling ghosts with technology

Modernisation is the means to exorcise these ghosts from workplaces. At its most basic, the problem is an accounting error that can be remedied with more proactive and automated monitoring. But it is first worth changing the dynamic of the issue from a negative to a positive.

"Fundamentally, the processes and culture of an organisation must change," says Hlabathi. "Technology can be the silver bullet, but you still need to know where to target and why. That last part is important: if you treat this purely as a clean-up operation to remove bad elements, you will struggle to get buy-in from the various levels beneath leaders. Instead, approach it as a positive investment. Consider it a way to protect your good employees, who are your most valuable asset."

For example, the earlier mention of early retirement options for skilled employees is considerably more of a loss than a gain. But if savings can be realised by introducing a more effective employee registry, those jobs could be secured for longer. While attacking fraud is a noble cause, addressing efficiency demands is much more effective with the added benefit of limiting criminal enablers.

Yet every action needs the right tools to complement it, and that's where technology plays its role. For example, simply automating the capturing of payroll data accurately can provide data to start spotting anomalies and potential improvements. If this is matched by an overall headcount system, the processes involved become more ironclad and less susceptible to tampering.

Modern digital platforms are very capable of delivering on this. Features such as biometrics and digital signatures can help ensure the accountability of employee managers, not to mention create a solid digital paper trail for forensic purposes. It appeals to risk managers, financial officers and governance watchdogs. Leveraging modern technology is also a boon for IT managers.

"If you look at the individual parts of these solutions, they are complex and rely on many modern technologies," Hlabathi concludes. "But whereas in the past you had to cobble these together, today there are platforms that incorporate those features, along with others. They scale easily and can be paid for through operational budgets. That means no long-term capital expenditure considerations. It's a gateway into helping organisations understand the other value propositions that new technologies offer, such as automation and data intelligence."

Ghost employees cost the state billions and billions, while at the same time deflating morale and cannibalising honest, effective workforces. The will to remove these leeches is not enough, yet when combined with the right technology, any organisation can realise great efficiencies and create a beachhead to modernise their processes and culture. In a time where every cent counts, don't lose sleep trying to count the heads of your employees. Let digital technologies do that for you, giving space to take action that has lasting effects.

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