Trends & Insights on Background Screening in India

By Smita Dutta January 10, 2018
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One in every six candidates in India lied on their resume in 2017

'Bad hires' have continued to be a pain point for the Talent Acquisition function in the HR fraternity. Studies show that bad hires can cost up to 5 times their annual salary.

With initiatives like Digital India, StartUpIndia, globalisation and increased adoption of technology, there has been a sudden spike in job creation across India. Access to job related information on job portals and increased competition have made it difficult for candidates to land a job of their dreams. This has prompted more candidates to resort to resume dressing techniques and faking key credentials to bag lucrative jobs, which is what ultimately results in bad hires.

According to AuthBridge's recently launched Annual Study 'Trends & Insights on Background Screening in India', 1 in every 6 candidates were found to lie on their resumes last year. The background check discrepancy levels shot up from 10.29% in 2016 to a whopping 15.21% in 2017, an increase of 48% over the previous year.

Highlights from the Benchmark Study

The Annual Benchmark (4th edition) report from AuthBridge is based on data analysis on millions of background checks conducted in 2017 in India. The report shares information on discrepancies across various background checks (employment check, education check, reference check, address check etc.) conducted on candidates/employees across all industries.

A discrepancy refers to a mismatch between information stated by a job applicant in a resume/job application and the actual information

Key highlights from the report are:

  • The Study reveals a 48% increase in case discrepancies in information shared by candidates looking for employment; compared to previous year
  • Employment check remains the highest source of discrepancy among different types of background checks
  • Financial services sector shows most discrepancies in 2017, with a discrepancy rate at 23.99%, the highest amongst all industries

Overall Discrepancy Trend in 2017

More than 15 % of all candidates misrepresented their information for brighter and quicker career advancement, revealed the study.  These candidates could have misrepresented either or all information related to their education, address, reference, previous employments, identity or other background check parameters.

Check-wise Discrepancy Trend 2017

Fig 1. clearly depicts different checks and change in discrepancy over the years. According to the study, candidates manipulated information the most during Employment verification followed by address verification, reference check and education verification respectively.

Img1

                   Fig1

Other Key Findings:

  • During the Employment Verification process, 1.27% of the candidates were found faking tenure.
  • During the Education Verification process, 0.75% of the candidates did not provide required documents and 0.66% produced fake/forged documents.
  • During Address Verification, 2.34% of the candidates were found to not reside at the given address and 2.24 % produced an untraceable address.
  • During Reference Verification, 1. 24% of the referees did not respond to verification calls.

Gender Discrepancy Trend 2017

A male candidate is more likely to misrepresent credentials compared to females, substantiates the AuthBridge Report. This pattern has been consistent across the last 3 financial years.

Of the overall discrepant cases, males contributed 12.07% while females contributed 10.15% to the overall levels. The disappearing disparity between men and women is stunning, with much needed attention required towards bridging the increasing misrepresentation gap.

The human resource department in organizations needs to have strict policies in place to safeguard against employee risks and take steps for comprehensive background verification.  It is very important to create a well-built background screening plan for the organization, customized according to the position's risk profile and formulation of strict policies related to recruitment and retention. Checks like instant ID verification, employment check, address check & criminal history check are effective measures conducted to know the reality of the candidates. Creating a standard grid for classification of unacceptable gaps in candidate resumes and verified information, formulation of strict policies related to background screening during hiring, and implementing role-based background verification plans. These need to be customised in line with the risk associated with a profile.

Structured background verification programs eliminate bias from the hiring cycle by treating all incoming employees equally.  Identity check and criminal history checks are the 'must haves' for a safer workplace.

The HR Fraternity is dealing with a dynamic job market, making talent acquisition and retention extremely critical. Increased attrition, easily available job information on job sites and increased globalization have led to frequent job hopping among candidates. At a spiralling high discrepancy rate, employee fraud is one of the most expensive for an organization across industries.

The AuthBridge study also presented an analysis of discrepancies registered during background verification process by age, zone and industry.

Financial Services topped the discrepancy charts followed by Telecom/ISP/Infra and Recruitment/Manpower/RPOs.

Financial Services

This industry is one of the most dynamic and disrupted industries across the country. Trust is a key element  and ethical employees with the right skills are a must have.

Background verifications across Financial Services revealed a 23.99% discrepancy- an all time high in last 5 years!

Img 2

                         Fig2

Analysis for Financial Services reveals that

  • Previous Employment information was the most manipulated in this industry
  • Males are more likely to misrepresent information
  • Candidates in age bracket 30-34 years are found to be most discrepant

IT Software/ Software Services

With stability in recruitment activity, the discrepancy in this industry increased in FY 2016 compared to FY 2017. In a buoyant employment market information technology and software have emerged as top hiring sectors.

The figure below depicts misrepresentation in the IT Software/services sector which has risen too. But the slight discrepancy also signals greater background screening and more transparency in the sector.

This also underlines how a large sample is better indicative of the real fraud picture.

Img 3

                            Fig3


Analysis for IT Software/Software Services reveal that

  • Previous Employment information was the most manipulated in this industry
  • Males are more likely to misrepresent information

Internet / e-Commerce / Dotcom

Driven by robust technology and accessible global funding, ecommerce companies have seen unprecedented growth, dramatically capturing the online clientele. The $17-billion ecommerce industry, which is expected to grow to $50 billion by 2020, is one of the leading recruiters and is expected to create more than 50,000 jobs over the next couple of years. With overall recruitment remaining stable, discrepancy in this industry decreased by 20% in FY 2017 when compared with FY 2016.

Img 4

                             Fig4

As more companies turn into e-retailers for practically everything starting from groceries to clothing, cosmetics to furniture etc., the sector's need for the manpower is evident. Hence, the number of jobs and opportunities created by the e-commerce industry has not only increased hiring mistakes but also encouraged employee fraud.

Exhaustive verification and providing grievance redressal numbers must be taken up to ensure customers feel safe when faced by company representatives.

Analysis for eCommerce reveals that:

  • Previous employment information was the most manipulated in this industry followed by address
  • Males are more likely to misrepresent information Candidates in age bracket 30-34 years are found to be most discrepant

Increased discrepancies across industries, sectors & jobs is disturbing. Close to 96% of employers carry out background screening checks, according to a recent report by National Association of Professional Background Screening (NAPBS). There is no arguing the fact that background checks minimize "bad hires" that can cost billions to companies annually. Organisations need to start looking at real time solutions.

In a nutshell, organisations need to adapt themselves to the changing hiring paradigm and keep reinventing their background verification programs to mitigate risks and create a safe workplace.

Author Bio

Smita Dutta is content expert at AuthBridge. With 3 years of experience in the Background Verification industry, Smita has extensive knowledge on the latest developments, trends and changing paradigm in background screening. 


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