Financial frauds grabbed headlines recently across India with the losses suffered by public sector banks reportedly going up to Rs. 2500 crores. The Reserve Bank of India released data that showed employees were involved in all of these financial scams.
Employees, both former and current, are the major fraud perpetrators in the Indian context according to a Kroll survey. Frauds range from bribery, corruption, theft of assets or stock, cybersecurity risks including phishing attacks and virus infusion. Key culprits include all levels of employees such as mid-level managers, juniors, ex-employees and contract employees. Thefts at workplace cost the U.S. small businesses a whopping $50 billion every year according to some studies.
Leading background verification provider AuthBridge’s 2017 survey revealed that employees most commonly misrepresent facts on their resume. Extensive background screening is the only way to prevent wrong hires and hire people with the right reputation.
While background screening is a critical aspect of recruitment at all levels, companies need to follow best practices in conducting employee verification.
The critical seven factors in background screening
Here are the seven critical aspects to consider in background screening:
1. Formulate a background screening policy: Every company should have a clearly formulated policy in terms of background screening. This should be aligned with the company’s strategic objectives and vision. Having a policy for screening will ensure best practices are carried out in an objective way across all levels. The other benefit of having a clear policy is that it helps in making the best decisions in hiring. The policy should include details of scope, objectives of screening, modes of background checks and so on.
2. Obtain the consent of the candidate: In many countries, it is mandatory to obtain the employee’s consent for background screening. Not doing so may attract legal action. In India, background screening has to be compliant with the Indian Contract Act, the Indian Penal Code and IT acts.
3. Understand different types of background verification: The policy document should also include the different modes of background verification that will be used. These include reference checks, criminal record checks, substance abuse testing, address and education verification, ID verification, credit reports and so on.
4. Consult a professional background screening provider: Entrusting the background verification process to a qualified and competent service provider can help eliminate errors and delays while ensuring accurate results. Professional background verification providers using high-tech API integrated solutions that align with the HR platforms can deliver fast and real-time results.
5. Formulate strategies to avoid bias in hiring: In many countries, giving a fair chance at employability is mandatory. Stringent laws also exist in terms of discrimination based on religion, ethnicity, gender, age or economic background. To ensure fair hiring, background screening should be initiated post the hiring process. The data obtained from the checks cannot be used to discriminate against the employee.
6. Dealing with negative findings in criminal checks: Many times, criminal record checks or credit reports may reveal negative findings. It is important for the HR to have the policy to handle negative findings. These can include further investigation, interviewing the candidate and giving him or her a chance at defending the findings. False positives, a negative finding in an otherwise good credit record and a lawsuit without conviction are some instances that need not result in negative hiring decisions.
7. Storing and disposing of background screening information: The U.S. Federal Trade Commission and Equal Employment Opportunity Commission define processes for information storage and disposal. The new European data safety rules impose strict rules on handling individual data. The background screening policy should define how long the information will be stored and the methods of disposing at the end of this term.