That only works if the upfront cost actually does anything to make the fraud more difficult. Just paying higher salaries does fuck all, the fraudsters will adapt to the higher prices and reap more profits.
Yup that's what I'm thinking. Higher wages would encourage more elaborate fraud (faking identity, paying a strong interviewer to sit in for you, paying people to pretend to be your references, paying someone in the company to refer you) because the payday makes it all even more worth it.
I was thinking along the line of putting it towards higher quality sourcers on the recruiting half. There's some some specialty boutique stuff out there in many spaces.