03 Aug 2018 19:05 IST

The importance of background checks in the hiring process

A company must verify a person’s identity, proof of residence, employment history, and social media presence

Humans are the core assets of all businesses — arguably, even more so than capital, land or inventory. When used properly, even an individual can serve as a game-changing element capable of transforming a resource-starved organisation into the next big thing. However, like any other asset, new employees come with a certain degree of risk, some more others. As recruiters, it is our job to assess the risks a candidate brings to the company, and whether hiring them is worth the potential ramifications in the long run.

There are countless cases in the media and courts of malicious, incompetent, or criminal employees whose actions have resulted in their organisations suffering severe penalties in the form of financial losses, government prosecution, and tarnished reputations. Of late, these instances seem to occur with alarming frequency. Over the course of my own career in HR, I’ve heard of numerous such instances where lapses or deficiencies in the background verification process have resulted in serious complications.

Lapses in verification

Two, in particular, stand out from the rest. In the first instance, an employee of a prestigious company was allegedly involved in terrorist activities, despite the organisation’s rigorous screening process. The police demanded that the company’s CEO be taken in for questioning, but the HR head was able to present them with the pan-India criminal court record check and the police verification documents which showed that there were no FIRs or crimes recorded against the person in question. With these documents in-hand, the company was able to prove that it had done its due diligence, and the lapses in security were the fault of the police department and not the organisation.

The second incident concerns an operation that was being run in Jalgaon. The finance team dispatched the salaries of the staff at the beginning of each month, which amounted to ₹63 lakh in cash, to the project head, on-site. This involved two trusted employees personally couriering the money to the team at Jalgaon via an overnight train ride. During one such trip, when one of the employees was in the washroom, the other escaped with the money. When the first employee discovered that the second man was absconding, he raised an alarm. After a futile search for the money, he also informed the local police. An FIR was registered, but it was unfortunately too late. Upon checking the personnel file of the employee, it was discovered that the thief had joined the organisation long before the company established a process of background verifications. A further investigation concluded that the perpetrator was actually an imposter who had submitted false papers, including educational certificates and fake identities. The thief was never caught, and the money never recovered.

What is includes

These aforementioned incidents and numerous others present conclusive proof that every organisation needs to adopt a systematic and thorough background screening process in order to thwart such disasters. This is where the doctrine of negligent hiring comes into play — it emphasises that employers are responsible for unethical behaviour by their employees, consultants, and suppliers. It is the duty of all ‘principal employers’ to ensure that due diligence and background verifications are carried out before a candidate is brought into the system, and carries on throughout their tenure with the organisation. A thorough background check entails the following:

* Identity verification

* Character references

* Proof of residence

* Police verifications

* Employment history

* Medical records (for a history of drug use)

* Social media audit

If the risk of waste, fraud, and abuse is to be prevented, it is the duty of every HR department to establish comprehensive systems to properly vet potential recruits. While the initial costs may seem like a wasteful expense, the reputation, peace of mind, and money that they end up saving in the long run is well worth the initial investment.

(The author is the President, SecUR Credentials.)