How employee background verifications can safeguard companies in hiring process

Background verification of new employees has become critical to safeguarding organisations in any low-trust economy or society.

In recent news, a Punjab and Sind Bank employee stole over Rs 52 crore from customers' fixed deposits to play online games. The immense potential of real money online gaming aside, such incidents underline the pressing need to integrate a background check within the hiring process.

Though recruiters make every effort to get the right candidate on board, a thorough background check covering work history, cultural fit, and skillset holds prominence to safeguard employers and their reputation in the market. 

Need for consumer safety

In a business-to-consumer (B2C) or direct-to-consumer (D2C) business, a wrong hire can have several repercussions on its sustainability and reputation if it creates a safety or fraud risk for the end consumer.

Background verification (BGV) goes a long mile in helping employers reduce the risks of bad hiring, ultimately leading to a better and safer consumer experience.

BGV, to a large extent, protects consumers from thefts and fraud by ensuring employees have no criminal records and have not forged their education or employment credentials. The process focuses on establishing trust between the employees and employers—passed down to the end consumer. 

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Industry scenario

The adoption of a background verification platform may not appear to be mission-critical, but behind its masked surface lies the hidden truth.

According to a recent survey, almost 70% of job seekers lie on their resumes. While some of it can be an exaggeration of their job roles and responsibilities, the real risk crops up when they claim factually incorrect things, such as a wrong tenure.

It is classic evidence of conduct by candidates in a low-trust economy or society, where one assumes that one can get away with fraud. Due to these misrepresentations, background verification is done by many employers.

There also has been a sudden proliferation of background verification platforms, with a surging number of human resources (HR) and talent acquisition teams leveraging their services to maintain the company’s long-standing reputation. 

Choice of checks

In the present hiring process, background checks are generally considered the last step before onboarding. However, many employers are unsure about the checks they should run.

There are no government standards that define the checklist under a standard background verification process, and requirements may vary across industries. Still, assuming for simplicity, the most common set of checks done are verification of identity, address, education qualifications, previous employment records, criminal records, and credit checks.

In fact, global database checks are also commonly done for international candidates. Post-COVID-19, moonlighting checks also became prominent.

BGV platforms allow employers to configure the checks they believe are most relevant and meaningful to run a robust and comprehensive BGV process for their new employees.

It is also important to understand if any specific checks, such as police verification done by the state police department, are mandatory as per applicable laws and regulations. 

Ethical considerations

Ethical considerations in BGV are paramount to ensure fairness, privacy, and accuracy. First, respect for privacy is crucial. Companies should obtain explicit consent from the individual and collect only relevant information about the verification.

Second, transparency is essential. Candidates should be informed about the verification process and their rights regarding the information gathered. Additionally, accuracy is imperative to avoid erroneous judgments. Verification methods should be reliable, and information should be cross-checked for authenticity.

Fairness entails treating all candidates equally and avoiding discriminatory practices based on irrelevant factors. Companies should maintain confidentiality throughout the process to safeguard sensitive information.

Finally, accountability is essential. Organisations conducting verifications should adhere to legal requirements and industry standards, ensuring accountability for the use and protection of collected data.

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Tips for employers 

With average work stints becoming shorter and gig work becoming common, choosing checks with methodologies with lower turnaround time (TAT)—say four hours instead of weeks—becomes important. 

Any organisation looking to set up (or improve their programme) must have clear answers to the following questions: 

1. Why are we setting up an employee BGV programme? 
2. What should be covered as part of the BGV policy?
3. When and how should these checks be run?

The right BGV partner can help and guide you on these questions. 

Final thoughts 

The way we work and the evolution of work cultures are going through a rapid paradigm shift. We don’t know how technologies such as artificial intelligence (AI) will impact the workplaces of the future.

Will it all be hunky dory, or will it also facilitate “innovation” and “creativity” in frauds?

Background verification is poised to be a highly impactful step in ensuring the safety of employers and their consumers to the highest degree possible. Organisations that are not running a BGV programme, or have not updated their BGV processes need to take proactive measures and act now.

Piyush Peshwani is the Co-founder and CEO of OnGrid.