No More Lemons
Business Today - August 29, 2004

There's a hot new service in town that can help you cut down on bad hires.

Remember that lemon you hired last month - who wasn't just a waste of time but also left your company poorer by a few lakhs? Not just that, now he's hopped across to your rival, armed with a few of your hottest business strategies. Well, you wouldn't have made that grave error in judgment had you screened him before taking him on board. You wouldn't have had to do it yourself. You could have outsourced it to a firm like Quest Research India, one of the few background-screening companies with pan-Asia operations. "It is basically an integrity and honesty check, a measure for fraud prevention," says Yogesh Bhura, Managing Director, Quest Research.

Face it, bad hires are a big blow to a company's reputation, quality of service, and relation with the client. Considering a significant amount of time and cost is incurred by the management in case of fraud or leakage of information it makes sense to undertake preventive measures like these. Don't however be misled into believing that intensive knowledge-based industries are the lone practitioners of this novel business practice. Manufacturing, financial services, banks and even logistic services are some of the other sectors that prefer to screen their prospective employees. Rough estimates suggest that the organized and unorganized sector together do about 40,000 checks every month currently. Also the new overseas legislations make it mandatory for Indian companies to verify their employees' credentials and ensure complete safety of data. Measures like these would also eliminate passage of sensitive information through high-profile corporate executives skipping jobs besides restricting entry of undeserving candidates who would not have sailed through, but for the false information.

The screening involves verifying educational qualifications, previous employment stints, and the existence of a criminal record. The service providers do a through check of the candidates' whereabouts, permanent address, criminal history, work ability, performance at previous organizations, salary verification, integrity check and the like. It is a judicious mix of intelligent telephone calls and physical movement by the service providers, who often need to travel as far as Andaman and Nicobar Islands for such authentication as there is often an insistence on written verification.

No screening can and does take place without the consent of the individual concerned, which may otherwise amount to prying. The depth of screening depends on the level of seniority; for instance, a CEO will have more baggage to be scanned than a process executive. The charges too, which could start at Rs 3,000 can go up to Rs 30,000 depending on the level of investigation required.

Companies that have undergone this process claim that not only has the quality of hire scaled up, there has been a sharp fall in attrition rate and falsification too. "We have achieved a less than 1 per cent level of discrepancy cases out of the total employee strength of 4,000 employees," boasts Aashu Calapa, VP (HR), ICICI OneSource. Quest Research whose numbers average around 10,000 every month.

Many across industries believe that going forward this emerging trend is only bound to become an established practice. Even though many corporates have been doing so in-house, Nirupa Bareja, VP (HR), Biocon reckons that, "as numbers grow, specialized angencies will have to be involved for pre-employment screening." That's a view shared by Nandita Gurjar, Head & VP, HR at Progeon. "We have already been outsourcing very detailed screening demanded by some of our clients, and it is only getting organized."

Employees on their part have responded well to this good recruitment Practice. Also more organized players are mushrooming. That's bad news for the lemons.