How an Employee Background Verification works:The Process

Background verification

An Employee Background verification process is a thorough screening of a candidate’s work history, education background and degrees, academic certificates, legal records, and sometimes credit scores. The process usually takes between 3-10 days and charge between Rs 2000 and Rs 3000 per candidate. The fee goes up in case of extensive checks and for senior-level hires. The company runs a background check on one’s resume/CV, once all the interview rounds are qualified by the employee. An employee background check is a review of a person’s commercial, criminal, employment, and/or financial records. Many employers conduct background checks on job candidates. Some employers conduct checks after they have hired an employee. This is an investment as background checks help in safeguarding organizational assets, promoting safety at the workplace, reducing turnover owing to right hiring, safeguarding company reputation, avoiding legal action and inspiring confidence in customers and shareholders.

As per the survey of the Executives involved in background verification, IT and ITES, banking and financial services and FMCG sectors are way ahead of their peers in other sectors such as telecommunications, manufacturing, retail, hospitality, healthcare, travel, education and entertainment. IT firms such as Tata Consultancy Services (TCS), Infosys Technologies, and Wipro are known to show zero-tolerance towards corporate fraud as well as fraudulent employees. Stringent actions including termination of services and blacklisting such candidates and recruiters are taken by them. The industry body for technology companies, the National Association of Software and Services Companies, maintains a centralized database of IT and ITES employees as well as third-party verified information on education, experience history and personal details of all these professionals.

Job portals such as Naukri, Monster, etc. and communities such as the CiteHR forum also alert users of the blacklisted candidates. But there is no single platform for non-IT/ITES companies, where details of fraudulent candidates and recruiters can be found. The lack of a centralized repository of information, defined processes and procedures to conduct checks at educational institutes, police stations or courts makes the process of background verification difficult and cumbersome. But with advanced forms of white-collar crimes emerging, it is time that companies go the extra mile and conduct thorough background checks on prospective employees.

Why do we need to verify the employee details before recruitment?

The probability of hiring a wrong applicant is one out of every six (1:6) candidates who hold misrepresented records to induce you into offering them the job.  There are many applicants who try to get hired by means of fake degrees and false employment records. Simple background verification would uncover these frauds and cease you from hiring the wrong applicant. The current scenario of Resume Fraud states 53% of all the job applications contain false detail according to the Society of Human Resources Management, while 9% of the applicants falsely affirmed that they had a college degree, listing false employers that didn’t even exist as per the survey conducted by Hubspot.

Below are some of the details that background verification agencies find in order to search for the employee who is the right fit for the company:

  • Experience gaps
  • Mismatch in the education received
  • Discrepancies in the compensation
  • Working in various unrelated industries
  • Skill sets varying hugely
  • Improve the quality of hires
  • Fake degrees from unrecognized universities
  • Certificate courses being passed off as degrees
  • Protect the reputation of the company
  • Prevent or reduce theft, fraud or any other criminal activity

Safety is a major reason to conduct background and reference checks is to avoid harm or legal liability of any type to the employer or to others. This includes harm to:

  • Other employees via sexual harassment or workplace violence.
  • The organization’s customers by sexual assault on business premises.
  • The public due to negligent driving
  • The employer’s business through financial loss or image/reputational issues.
  • Defense of legal claims, such as negligent hiring
  • A multilevel jurisdictional criminal records search can be strong evidence that the employer exercised due care in hiring.

Criminal Check: It is important to check criminal records of individuals who own or who work with a third-party vendor. Discovering beforehand about the owner being involved in theft will save the hassle and worry about the same thing happening again.

License Requirements: It is important to verify that all licenses are current and there has been no refusal of license or probationary periods due to any wrongdoings.

Other Business Names: It is also a must to identify whether the third-party vendor is using alias names or the firm with a history of names has something to hide.

Lawsuit or legal issues: It is required to check whether the employee is involved in any criminal cases.

Motor vehicle records: Employers should always check the driving record of any individual operating an organization vehicle at any time or who will drive personal/ rental vehicles on company business. A motor vehicle record typically includes license status, license class, expiration date, traffic violations, arrests and convictions for driving under the influence, and license suspensions or cancellations.

A thorough search reduces a company’s risks by confirming that the vendor is not open to risk factors that might create lawsuits or other issues, the employee is insured and is a legal resident, eligible to work in the country. Checking important information priorly can also prevent financial concerns.

Maximize productivity: Hire the best and reject the rest. Typically, past performance is a strong indicator of future performance and can reveal an individual’s professionalism, productivity, job skills, and interpersonal communication abilities.

Employee Background Verification includes:

  1. Public records: These can easily be accessed from the court records and criminal history by any law enforcement agency.
  2. Work history: It can be obtained from one’s past employers, Duration of being hired with them, Job role in each company, Pay, Performance history, Conduct in the company, Medical history.
  3. Education records: Companies will reach out to your universities to match your credentials to avoid forging degrees, fake certificates, bogus grades- the most common types of corporate frauds.
  4. Address verification: It is done by sending people to physical locations to check out a candidate’s address.

Big private companies hire third-party agencies to do everything mentioned above. While smaller firms usually depend on their internal team of HRs for background verification of employees recruited. The HR team which takes care of the background verification process has a powerful tool that they can use to learn a lot about a job applicant- social media handles. Content that borders on racism, a homophobic slur, inappropriate pictures, etc, is and should be, used against the applicant. There are no laws that require companies from scanning social media handles of candidates.

A background check can range from a simple verification of your social security number to a much more thorough check into your history. Information that an employer might check can include your work history, credit, driving records, criminal records, vehicle registration, court records, compensation, bankruptcy, medical records, references, property ownership, drug test results, military records, and sex offender information. Employers can also conduct a character check, which might involve speaking with your personal acquaintances, including friends and neighbors.

There are various kinds of background checks, including business to business check (B2B) and business to a consumer background check. (B2C). Third-party vendors fall into the category of a B2B check with these background checks including information on the creditworthiness of the company, work history, and verification of state certificates. A few agencies in India like First India Advantage, Mintly, Jantakhoj, AuthBridge, HireRight, and IDfy are specialized in background verification, known as third-party service providers.

When employers use a third party to check someone’s background, the Fair Credit Reporting Act (FCRA) restricts what they are allowed to check, and how. The FCRA is federal legislation that sets the standards for screening for employment. The FCRA defines a background check as a consumer report. Government firms or PSUs run an extensive verification before offering the job. They ask for Residential proof of where you lived more than six months, Proof of current local address and permanent address, Record from District Magistrates/ Police Commissioners of areas where you lived. Further, either of those authorities asks police stations to run the check and finally, the record that police find is passed on the chain.

With the advent of technologies, various tools have been used as:

  • Aadhaar verification
  • National Academics Depository (NAD) – The government launched the NAD tool that digitally stores your education records and can issue reliable certificates to verified users as they plan to have every education board and institution in India on-board.
  • National Skills Registry (NSR) – NSR is the largest database of working professionals that helps the company’s fact-check employees’ information.

Trends associated with background screening and reference checks:

  • Automation: Apart from phone-based reference interviews, screening firms and employers are using advanced technology to improve the results of reference checks. Some screening firms offer online solutions that enable a broad set of reference sources to respond quickly and confidentially. While few believe that the online reference checking does not enable a hiring manager or screening professional to ask probing questions in an interactive fashion. Though this is true, requesters always have the option to call and ask follow-up questions about candidates after reading the initial report.
  • Screening of contingent workforce: According to the Bureau of Labor Statistics, nearly 4 out of 5 employers use some form of nontraditional staffing such as hiring freelancers, temporary workers or independent contractors on an as-needed basis. Employers largely have the same liability issues as these workers as with regular employees, and more employers are choosing to screen these workers to protect themselves.
  • Globalization: Pre-employment screening is becoming more complex as organizations increasingly look to overseas job markets with advent of globalization. It is now common for a job applicant to have been raised and educated in as well as to have worked in several different countries. Employers recognize that candidate screening at all levels is more complex and vital to organizational well-being. Multinational employers thus must be careful to obey local laws concerning background checks.
  • Social Media: Today, every company you interview with looks into your social feeds. Social media has made it easier for employers to map one’s interests, activities, and tastes, enabling them to picture their personalities. Beware of an objectionable pic on Facebook or a raging political comment on Twitter. The legal rights around background checks are vague, due to privacy concerns raised by many.

There are some rules and regulations need to be followed by the recruiters as per the guidelines of the government. It’s mandatory for Indian companies having ISO 27001 certification to conduct background screening for employment. Your medical information, financial background, and biometric data are private. An employer can’t access it without your permission, but there are no laws to stop companies from scanning your social media. In a few cases, for the hiring of top positions, companies are more concerned about their background and do go beyond the extent of verifying its approval, irrespective of the law. There is some information that cannot be disclosed under any circumstances, including bankruptcies after 10 years, civil suits and civil judgments and records of arrest after 7 years, paid tax liens after 7 years and accounts placed for collection after 7 years. However, these restrictions don’t apply if the salary is $75,000 or more, for a senior position applicant.

To sum it up, candidate verification is one of the most effective tools that you should use to build the right ‘infrastructure’ of employees. India is seeing a huge spurt in growth with many a start-up spawning from even tier-2 and tier-3 cities. Make sure candidate verification is a policy that is part of your growing culture and is never side-lined. You might not see tangible benefits to it, but you would’ve averted many an issue just by making sure you only allow candidates who are vetted.