Without question, most people who own businesses have probably thought about hiring those they know personally. If they are hard workers, it shouldn’t be a problem, but there are concerns that can rise to the forefront. One of the most serious is known as friendship fraud, and it’s likely that you have little idea as to what this entails. For those who would like to know what this case entails – and Bob Jain can help you along the way – take note of the following information.

According to Bob Jain, friendship fraud is when someone is employed due to a personal connection, only to act in ways that negatively impact the company. For example, someone might be hired in order to maintain payroll, ensuring that everyone is compensated accordingly. However, that very hire can then turn around and inflate their paycheck at the expense of the company. Suffice it to say, this has long-term ramifications.

One of the reasons why friendship fraud occurs is due to a sense of loyalty that one party feels toward another. For example, if two people have been friends for quite some time, it’s possible that the child of one party might want to work for the company that the other has ownership of. When this happens, the aforementioned sense of loyalty can be something of a negative trait. As a matter of fact, it’s why methods of prevention must be covered by the likes of Robert Jain Credit Suisse.

One of the ways to keep friendship fraud at bay – and this might go without saying – is by hiring based on skill. Instead of focusing so much on personal connections and the like, place more emphasis on the skill set and prior job history that an applicant has. When you do so, you have a better comprehension of what they can bring to the table. Your company will benefit from this strategy in long run, as names like Robert Jain Credit Suisse can support as well.

Simply put, no business is going to succeed if there is nepotism to be seen. There’s a high probability of friendship fraud, as any attorney can tell you, and understanding how it can be prevented in the long term is nothing short of vital. For this reason, you should stay knowledgeable of this activity, ensuring that you exercise care along the way. By doing so, you can rest easy knowing that your business will stay active in the long term.

Go to Bob Jain Credit Suisse if you would like more financial information courtesy of Robert Jain.. Free reprint available from: Bob Jain & Understanding Friendship Fraud.