Know Your Employee (KYE) | B2B Finance Glossary
What is Know Your Employee?
Know Your Employee (KYE) is a process that allows businesses to vet potential employees before hiring them. This process ensures that businesses can prove who their potential employees are and was designed to help businesses, employees, and customers stay safe.
KYE isn’t simply limited to employee onboarding; it also involves communicating with employees regularly to establish a strong employee-business relationship and continuously improve corporate security.
Why is KYE Important for Companies?
KYE is important for employees and companies in creating meaningful relationships, and establishing trust between these two parties is a key component of making this happen. KYE is instrumental in creating trust between businesses and employees and helping businesses better understand employee needs.
On top of this, KYE processes can help a company effectively express what it wants and expectations regarding its workforce. Plus, the more an organization can understand an employee, the better that organization can communicate with that employee and create a more mutually beneficial relationship across the board.
Here are a few key ways that KYE technology can benefit companies:
- Improving retention. Companies can use KYE to better understand the sources of attrition and take measures to stop employee churns before they even happen. Additionally, KYE can help companies create stronger bonds with employees to develop lasting working relationships.
- Increasing acquisition. KYE technology can also help businesses improve their abilities when it comes to recruiting talent that is the right fit for the company. This can be done by using past recruitment data to better understand how to build a successful recruiting process and to help new and current employees succeed by mapping out the psychographics and skill sets that thrive within that particular business.
- Improving engagement. KYE can also be used to more effectively drive employee engagement and improve employee satisfaction. This can be done by implementing systems that help companies better understand employee behavior and trends related to how workers within the company operate.
What are the Benefits of KYE?
KYE has many benefits for companies and employees alike. Here are some of the most important factors that these processes bring to the table:
Eschewing Corporate Losses
It is possible for criminals to impersonate other people to get a job at a particular company. They do this to access corporate property, allowing them to steal a business’s resources. As a result, these criminals incur significant corporate losses, negatively impacting businesses of all sizes.
Additionally, these criminals can permanently harm a business’s reputation or create other forms of long-term damage for corporations. KYE helps reduce the chance that businesses will unintentionally hire criminals, and these processes can prevent corporate losses and other negative effects that businesses might experience due to hiring fraudulent employees.
Reducing The Risk of Money Laundering
Businesses must be aware that their potential employees could be tied to money laundering schemes since criminals look for legitimate businesses that can shield their illicit activities. KYE verification can help businesses discover criminals who have the ability to put entire companies at risk.
Creating Safe Onboarding Practices
As remote work continues to grow in popularity, employee identity verification can allow businesses to safely hire workers worldwide. These onboarding processes have the ability to verify that the potential employees are who they say they are, determine whether or not the potential employees are fraudsters, and detect if they have criminal records or any other kind of criminal history.
This form of KYE allows employees to work remotely and lets companies know they can safely hire workers regardless of their physical location.
Stopping Employee Fraud
Employee fraud occurs when employees exploit company resources for their benefits. For example, employees can divert business funds to themselves, commit pension fraud, or steal company property, business opportunities, or intellectual property. Proper KYE tools can detect if employees have committed employee fraud by checking their past financial and criminal records.
Ensuring Secure Access to Control Privileges
Data breaches, leaked information, and cybercrime can all happen due to poorly controlled access rights in different businesses. KYE protocols can help with the process of determining a particular employee’s position and the level of access that this employee might have to particular information.
Different KYE software implementations can determine that an employee at a company is who they say they are and will allow them to view sensitive information or access critical company resources. This can occur through facial recognition software and other forms of identification verification.