Antecedent verifications are back in a big way, post 9/11. And it's not just about some back alley, shady detective work any more.
Human Capital - July 2004

Lalit Doshi has been suspended from his cushy job at a foreign bank. not because of consistent non-performance, or objectionable behaviour at work, or an unforgivable faux pas with a client. It was just a simple background verification necessitated by an impending role change that revealed an unexpected skeleton in his closet. Apparently, Lalit had falsely claimed competition of a post graduate diploma in financial management from a leading b-school in Mumbai and submitted forged degree certificates at the time of being appointed. He had actually enrolled for a diploma course and not for a post graduate diploma. In fact, he had failed in one subject and not attained the qualification at all.

Unusual? Not really. Recruiting specialists estimate that almost 10 percent to 15 percent of all resumes contain some kind of discrepant information, of which almost 75 percent relates to previous employment, 20 percent to educational and professional qualifications, and the rest to residential records. Blame it on an obsession for overstated credentials. a mention of a company where one has never worked, a wrong job description, an incorrect reporting relationship, inflated compensation. haven't we seen it all?

The issue is not about innocently fancying up an unattractive resume, it can turn unpleasant or ugly. "Rumors about the reputation of a newly recruited resident manager in our Singapore office prompted us to start investigations into his past," shares Preeti Gandhi, who heads the recruitment function in a Gurgaon based software firm. "It came as a rude shock to us when we found that had a long history of embezzlement and fraud. The management did not waste a single day in showing him the door."

In a call centre, a team of three tele-callers were found to be passing on confidential business information to a competitor firm. "This had been going on for six months, until the day that we decided to conduct a random frisking operation on the floor," says Avinash Khatri, team leader, marketing and support. "Its nothing short of organized crime and the target is often employees at the medium and junior levels, who have access to sensitive data," he continues.

So what are employers doing about it? Talking facts and figures. globally pre-employment screening is considered mandatory by more than 90 percent of Fortune 1,000 companies. Post 9/11, the United States insists that all people being sent on deputation or projects to their country should be screened clear of dubious records. This regulatory requirement of U.S. customers has, in large part, become the driving force for the rise of antecedent verification services in the rest of the world, including India . Increasingly, organizations are seeking specialized services to ascertain creditability of prospective employees' claims. The leaders in the game. naturally the IT, ITES, BPO and finance, where employees are handling critical information of the organization or its clients. The concept is also gaining wide acceptance in people dominated businesses like insurance, hotels and other service industries, where one bad hire can cause severe damage to the company's financial strength, its reputation, regulatory compliance, client retention and even business intelligence.

No limits.
Better safe than sorry, advise screening pros. And more and more corporates are starting to agree that it is sensible to tread cautiously, rather than risk the company's reputation. Candidates with negatives, misrepresentations, or a dubious professional track record are an absolutely no-no.

For a lot of companies, conducting a background check for prospective employees is becoming a norm and basic hygiene measure. Reference checks are conducted through consultants and internal HR departments. In other organizations, the investigation is broader, wider and much more comprehensive.

Global player like 3M are known to utilize their contacts at universities, employers and hiring agencies while recruiting in each country. Local employees and pre-employment screening firms conduct checks on candidates' employment histories, educational credentials, and at times criminal records. Structured interviews of applicants, along with data from personality and assessment tests complete the grey areas in the picture. HR departments even share with the candidates that they would be subject to background investigations and random drug and alcohol screenings.

In India, Saint Gobain Glass has outsourced its entire pre-employment screening activity to a reputed detective agency. Antecedent verification is considered critical for junior positions to identify family related issues, culture and even dubious or divisible role played by the individual in previous companies. For positions in middle management and above, the company conducts a reference check, which is corroborated in the detailing interview later.

Says Padmakumar. P, head of human resources, "When we recruit in larger scale, at times see a pattern in the reports. Many a times, antecedent verification has pointed out notable issues. For entry level, we look at their family background. We also look at political linkages and the extent of involvement. This is not necessarily for rejection, but more for awareness. We also get a feel of the family income status and activities of the immediate relatives." What weightage is attached to the data obtained from antecedent verifications? "We believe that it should be taken purely only as background information, not as the selection criteria," quips Padmakumar.

Enter the pros.
The concept of antecedent verification in India has come a long way. Traditionally, one would associate pre-employment screening with discreet surveillance, carried out by small time investigation firms. Even today, there about 1000 such detective agencies scattered over the country. But now, the entry of professional firms like Quest Research Services has given antecedent verification a new lease of life. Professionalism and legal compliance is the name of the game.

So, what separates the wheat from the chaff? Shares Yogesh Bhura, managing director, group research centre, Quest Screening Services, "Earlier a background screening would be done without the knowledge and consent of the candidate, which is illegal and unethical. At Quest we don't conduct a background screening without the written consent or knowledge of the individual candidate. Another area of change is 'what' used to be checked and with 'whom'? Earlier, the focus would be on personal background through neighbors and friends, whose identity would not be disclosed in the report. This lacks creditability and is quite subjective. Also venders would be paid just to write a report which is mostly a copy-paste activity for most of the candidates. At Quest (and now the industry standard), we focus on professional background (educational, employment etc.) through the original source (universities and employers) and name of the verifiers and disclosed in our report. Earlier, the verification was restricted to few telephone calls to reference mentioned in candidate's resume who in all probability would be friends or relatives of candidates and very unlikely to unearth any meaningful information about candidate's professional credentials." Bhura believes that the need for a specialist firm in this area has never been as compelling as it is now.

The growing trend for the companies in US as well as Indian counterparts is to have an enterprise wide strategy, for the employees at all levels as the business case for screening is very strong, since "The cost of bad hire is in multiples of cost of screening the entire population," Bhura maintains. Of course, at times, the depth of the check could dependent on level and criticality of that employee.

The types of verification vary from organization to organization. Depending on the situational need and the budget, a verification could go up the complexity scale. starting from a simple address check to authenticity of qualifications or experience mentioned on the resume, to performance at work, reasons for leaving previous jobs, union related activities, and credit checks, civil litigation and bankruptcy details. The ultimate, is of course, a scan for clearance in criminal records. sources for these include the RBI defaulters list, the 1992 JPC report, and police records. In the US , organizations go as far as to screen police records of potential employees going back as many as seven years.

If the trend is anything to go by, misrepresentations are as high as 20 percent in employment details and relatively low (about 5 percent) in education. On the other hand, there are just about less than 0.1 percent negatives in criminal cases like forgery, accidents and dowry issues.

Existing employees could come under the loop too, but that happens only in case of some specific incident, like a suspected fraud, information leakage. Screening consultants are also called in when an employee who has signed a contract to serve the company for a certain period absconds and has to be traced to his current work place. Whether pre- or post-employment screening, the job of the investigator is limited to submitting the report.

The privacy factor
Do corporations reserve unconditional rights to hire screening agencies that go around snooping on potential employees and uncovering their personal secrets? What about the legal issues related to antecedent verifications? In US, the screening industry is guided by Fair Credit Reporting Act, which in conjunction with local state laws determines the limits of antecedent verification. Shares Bhura, "In few states in US, an organization can not deprive employment to a candidate in spite of criminal conviction etc. In India , it is still early days and there is no legal framework, specially for the screening industry. Europe has strong data privacy legislation as a result of which screening as a practice has not grown in the region. Few years back, even in US there was a movement for strong data privacy laws which would have restricted the growth of the industry. However common sense prevailed with a famous saying: the right to privacy does not give a person a right to be anonymous. Rightly so, if people expect jobs from the society, business or government, the employers have the right to know (read verify) who they are."

The last paragraph of the application form in the most companies carries a declaration by the candidate, stating that the information he has filled up is true, and that he has no objection to the company verifying or investigating his claims. But is that enough to qualify as a willful consent?

Another dimension relates to the quality and integrity of vendor. Legal experts contend that the practice of antecedent verifications is more of a precaution and safeguard, than actual requirement of law. In fact, there is no statutory obligation under the prevailing employment laws requiring the employers to verify and check the veracity of the information so furnished by the employees in their resume.

Counters Ravi Singhania, "The service rules/ Standing Orders of an establishment invariably describes furnishing of wrong information by employees as 'misconduct' and elaborates the punishment(s) that can be imposed by the employer in case of such misconduct by the employees. The punishment usually varies from imposition of fines to severe actions like dismissal, depending upon the gravity of the offence, the crucial nature of the information etc. Once an employer discovers that an employee has given wrong information in his resume, the employer may take recourse to disciplinary proceedings where the employee is given an opportunity to explain his conduct, and if necessary, impose punishment as per provisions of the service rules/ Standing Orders of that establishment."

He goes on to explain that even in situation where the establishment has no Standing Orders/service rules, or where Standing Orders/the service rules of the establishment is silent on actions that can be taken by the employer when wrong information is furnished by the employee, still the employer can initiate a disciplinary proceeding against the employee in order to give him an opportunity to state his case, and then assess the magnitude of the offence and impose punishment accordingly. In extreme cases, the employers are well within their rights to dismiss the employee from the employment. Yet, in the present competitive market scenario, where the tendency of the employees to furnish wrong antecedents to employer in order to secure good jobs is rampant, it would always be prudent on the part of the employers to undertake, however painful & tedious it may be, to verify at least crucial antecedents given at the resume, before appointment of the employee.

"The present laws in India do not provide for protection of personal information. Therefore, it would be perfectly in order for the employer to verify the details furnished by an employee and it would not be out of place for a former employer or any third party having data on the potential employees to release the same to the enquirer," recommends Singhania.

BIGGIES IN TOWN
Quest Screening Services
250 Strong team
Average 12,000 checks per month

AND PRICE TAGS
Globally, pre-employment screening can cost $150 to $500 per verification for European candidates, to as much as $5,000 per verification for applicants from African countries, while the average verification cost for US based candidates, is less than $100. In India , the range can vary anywhere from Rs.500 to Rs.25000 per verification.