Pre-employment Background Screening Verification Program

This post discusses at a high level the need for pre-employment background screening verification of new candidates and the methodology to be adopted for the same. If an organization does not have a formal process for the same, it is highly recommended to develop a policy and implement the same. The verification can be done by internal sources or can be outsourced, depending on the requirements of the organization.

What is Pre-employment Background Screening?

A background screening process establishes the true identity of the person and verifies the information provided in the resume. The process enables the organization to minimize the risk of frauds, thefts, industrial espionage, operation disruptions, property destruction, reputation damage. Most importantly it facilitates the organization in providing a safe and secure work environment.

Why is it required?

Employees are the most valuable assets of the organization. The organizations are focused on hiring the best candidates to achieve growth, turnover and competitive advantage. While hiring attention is on selecting candidates with the required soft and technical skills, there is very limited emphasis on knowing the prospective employee’s background and determining the true identity of the person.

Given the backdrop that terrorists, financial crime groups, narcotics dealers etc. are implanting their resources within the organization for the purpose of obtaining sensitive information or providing their resources a discrete cover, it becomes critical for organization to have proper screening processes.

Secondly, various reports issued by consultancy companies indicate that at a minimum, 25% of candidates submit false or inaccurate resumes. The inaccuracies normally are relating to salary, job title and duties, education etc. Considering this, the honest candidate looses out on the job and a dishonest candidate is selected since reliance is primarily placed on the resume.

The pre-employment background screening process also helps in complying with some of the country and industry specific regulations and laws.

An incorrect hire can result in financial, legal, operation and reputation loss and damage. Additionally the organization incurs the cost of hiring, training, etc. If a serious offence is done by the employee there is significant reputation damage and employee morale loss. A well-developed and implemented policy can substantially mitigate these risks and resultant losses.

A few examples of incorrect hire are:

  1. A financial crime group based in London implanted an employee in the outsourcing unit of the bank in India in the call center process. The employee provided critical customer information by accessing the database to the financial crime group. The group conducted account takeover frauds in London for over $500,000 in a span of two months. The employee had submitted false employment records which could have been detected at the time of hiring.
  2. An employee joined an organization which relied on the education and employment checks done by the previous employer. The employee had falsified the information with the previous employer which had remained undetected. Subsequently, the employee was suspected to be involved in terrorist activities.
  3. A senior manager was hired from another country without conducting the required due diligence. It was determined at a later date that the senior manager had falsely stated his technical qualifications.
  4. An organization outsourced the transport of its employees to a vendor. A cab driver with previous history of sexual assault was hired without verification for commuting female employees at night. The cab driver raped one female employee when she was alone in his cab.

What is the current situation?

Presently, the organizations are focused towards finding a good fit for the job description in respect to technical and soft skills. The line managers are normally involved in conducting the technical interviews and the human resource managers are normally involved in checking the cultural fit and discussing the salary packages etc

In the normal course, reference checks are done prior to the issue of job offer/ appointment letter. The complete background screening is done after issue of the appoint letter and/or after the employee has joined the organization. The primary reasons for this is, first that the organizations are normally want the candidate to join in a short notice and secondly complete documentation is not collected at the resume submission and interview stage. Hence, the required screening cannot be conducted prior to the employee joining the organization.

However, for right hiring the background screening process should commence at the resume appraisal stage itself.

Policies, Procedures & Systems

The management needs to establish the policy for pre-employment background screening which should be an integral part of the recruitment procedures.

To introduce a background screening process human resources, corporate security, compliance and legal department should for a committee. The committee would be responsible for:

  • Establishing the policy for background screening which would include the overall scope, methodology and approach of the process.
  • Implementing the procedure for background screening which would include nature of forms, data collection from candidates, method of appraising the information, evaluation criteria for considering discrepancies and action required for discrepancies.

The policies and procedures should be documented and implemented uniformly throughout the organization.

The key aspects while implementing the policies and procedures which need to be considered are:

1.            What needs to be checked?

The checks which need to be conducted depend on the job role, industry and country regulations. However, the main focus is on the following:

  • Identity
  • Address
  • Education
  • Employment
  • Criminal background
  • Credit rating

Care should be taken that the checks do not contravene any Labor Union & Labor laws requirements. In addition and where applicable, it should be ensured that no conflicts exist between union agreements and the employer’s screening policies.

The period of checking also needs to be established. For example, should the checks be done from the last two employers or the full employment history should be verified.

The application form should be designed to obtain the relevant information and documents from the candidates need to be collected on the period to be checked. The documents which should ideally be collected are:

  • Proof of identity – passport, voters cards, social security numbers, drivers license etc.
  • Address – Address details including permanent and correspondence
  • Education – Copies of certificates
  • Employment – Appointment letters, salary statements, resignation letter, full and final settlement clearance letter. For international work experience work permits, tax certificates may also be collected.
  • Criminal background – Information on local and federal cases
  • Credit rating – Bank and credit card statements

A proper authorization is required from the candidate/ employee for conducting the checks, since it requires accessing personal information. The application form should contain a note regarding the employers intention to conduct background screening and the method by which results will be analyzed. The authorization to conduct background screening can be obtained on the application form itself from the candidate.

The key components of the practices and procedures should identify the use of employment applications and resumes, forms, and letters used including disclosure forms, waivers, a conditional job offer, and job denial. In addition, the procedures should address both internal and external alternatives, including measures used to outsource any screening to be performed by a third-party.

2.            Result analysis and decision-making

The critical aspect is the method to be adopted for reviewing and analyzing the information received. A method needs to be established as to how the discrepancies/ inaccuracies between resume and results of the screening process will be addressed. Normally, the segregation of discrepancies can be done as minor and major discrepancies. A few examples of discrepancies noticed during background screening are given below:

  • False identity of the candidate social security number does not match government records
  • Education the candidate’s name does not appear in the university records
  • Employment the period of employment differs from that stated in the resume
  • Criminal record – the records show an ongoing case of theft
  • Credit rating – the candidate has regularly defaulted on credit card payments

As a process, the applicant should be informed regarding the discrepancy and given an opportunity to explain the reasons for the same. If the organization is satisfied with the explanation, the candidate may be offered the position. However, if the organization is not satisfied with the explanation, a letter should be sent stating the reason for the adverse action.

Adverse action notice If a candidate is being refused employment based on the adverse comments of an external verification agency, the contact number details etc. should be provided in the notice to provide the candidate an opportunity to challenge the information and safeguard the company.

If a person is found with criminal record, action needs to be determined regarding involvement of police authorities

All documentation collected from the candidate, received from organizations for purposes of background screening and the adverse action notices should be retained for a specific period as per the legal requirements of the country. The reason being the candidate can possibly dispute the organizations decision, and the documentation would help justify the organization’s stance.

A thorough implementation of policy safeguards the organization from incorrect, fraudulent and criminal hires, thereby mitigating the legal, operational and reputation risks which would have resulted with these hires. It is the organization’s responsibility to hire candidates with high ethics, integrity and personal values.

 

The Business Enterprise Magazine published this article in November 2011 issue.

Refer to another article: Employee Selection and Background Screening in Ancient India

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36 comments on “Pre-employment Background Screening Verification Program

  1. Excellent article detailing the need of background screening. It is critical to perform background checks and ensure that we get the right resources. The cost of correcting the mistakes later is much more than taking preventive actions.

  2. Hi Guys,

    What does the companies check during Background check, Do they the check the duration of you profiles (Say example: How long you worked as a Tester/Developer/DBA with in a company or they check the tenure with a company)

    Is it okay to put 4 yrs of experience as a Developer/DBA, but actually worked on these roles for only 2 yrs, remaining 2 yrs as a tester in the same company?

    • Sur,

      In your resume you will have to write the two different designations and job profiles you held with the same company. That is more beneficial because it shows that the company promoted you or that you were allowed to move laterally. Also, it provides you an opportunity to show more skills. An interviewer will question how you got testing skills when you were a developer or the opposite.

      Hope that helps.

      Sonia

      • Hi Sonia,

        Thanks for the quick reply. Do you have any idea how the BG check is done? Whether they check your tenure with the company or they will check about the tenure of individual profiles(Testing/Developer/DBA)?

        Sur.

      • Sur,

        They will ordinarily check with the previous company the tenure. However, they may request for breakdown of information. Also, they will check details from your references and informally verify the information. Hence, doesn’t serve any purpose to hide the information.

        Sonia

  3. Can anyone challange the BG verification results in the court of law in india, the organisation may take advantage of it and sack the employees when they do not need it, for false candidate — they will rush away but if there is a misinterpetation of what is furnished in application form , it may be harmful for a genuine candidate.

    BTW, I do not think previous employer can give in so much detail like if an employee was working as a tester or a developer? usually, organisations give the following details:- employee Id, start date, end date, role and last salary drawn. information sounds logical,
    Think of an organisation like infy, wipro or satyam having high rates of attrition, is it possible for them to provide all the details like developer, tester, projects etc.. especially when they themselves change or do not change the projects of employee frequently or rarely. There is a concept of shadow resource as well…
    because if an employee opens his mouth and starts telling things related to business visas, how an L1 is processed for new employee etc.. organisations will find it difficult to handle all this.

    Having said all this , I still request for the infomation :- Can any employee challange the BG verification results in the court of law in india.

    • Nishant,

      Thanks for reading the blog. Yes, one can challenge th background screening resultsin court. For example, if a candidate has cleared the exams, and the new company has terminated his/her employment saying that the college degree is false, the candidate can take them to court.

      Another example, which people in India are careless about is the reference checks. For example, an ex-boss may have given a good appraisal seeing the employee meets expectation or is above average. However, to take personal revenge the ex-boss may list some negative traits of remarks based on which the employee gets terminated from the new job. In this case, the employee can take the ex-employer and new employer to court.

      If requested by legal authorities, an organization has to provide details on the projects an employee has worked on. They can’t say that there are too many employees hence we don’t have details. And this includes shadow employees too.

      Hope it helps.

      Sonia

  4. Hi,

    I am working with one of the largest Software company in Pune. My background Verification done by third party. The third party some executive visit my previous company,that time the company was closed. They had given the report to my present company, that company doesn’t exist. The third party talk to my previous company director also and all things are also on the website, but due to that report, i lost my JOB.

    Now i just want to know that, can i sue to the court against that third party company, who had done my background verification for giving the wrong report and for mentally harassment?

    Please reply me soon on my mail id (itishika@gmail.com). I’m anxiously waiting for your reply.

  5. Hi,

    Can an organization conduct a background check of its existing employees after they have been working in the organization for some duration?
    In case an organization does not have a policy rgarding the background checks and enacts one in due course then is it desirable to go for background verification of the employees who have been working for one, two, three or more years in the same organization?
    In this case, can an employee deny the authorization to conduct background check or he is has no say in this matter?
    If you can direct me to any rules and guidelines regarding this under labour laws, etc then it would be of great help.

    Thanks
    Saumitra

    • Saumitra,

      Interesting question. Let me answer it by covering formal and informal methids.

      Firstly, if at the time of joining, an organization has not stated that background verification checks will be done, and the appointment is subject to the candidate clearing it, then subsequently an organization cannot claim that as a reason for termination.

      If the orgnaization subsequnetly issues a policy regarding background verification, the employees authorization is required. The orgnaization has to specifically seek permission from the employee to conduct a background verification. The employee will be within his/her rights to not agree to the terms.

      However, in reality most organizations do a background check informally prior to the appointment. If a formal process if defined later on, and an employee refuses the organization can still conduct the check informally without the employees knoweldge.

      Now the question comes up will the employee get terminated if some discrepacies are found from informal check. As the law, the orgnaization can’t terminate the employee on these discrepancies.

      However, most employment contracts are at will. Employer can terminate by paying three months salary and other dues to the employee. There is no law against it.

      So the best advise is that if emloyees don’t have anything to hide, they should agree to a background check. Hope this helps.

      Sonia

  6. Hi Sonia

    My organisation is asking for BG check and documents after 8 months of my joining as they have recently introduced this policy. Along with other documents they are also asking for Offer letters and salary slips for my last 3 employers. I have submitted my relieving and experience lettres but I am reluctant to produce my offer letters and salary slips as these are considered confidential and should not be disclosed as it is very well written in the offer letter. Is it ethical for the company to ask offer letters and salary slips for all previous employers.

    My second question is that I have already submitted my permanent address proof but not the current one as I dont have one. My company is forcing me to submit this also. I my previous organisations I used to get a current address proof from HR and here my HR is asking me to provide proof for current address. Isn’t permanent address proof enough?

    • Rohit,

      The organization is entitled to ask for appointment letters, salary slips and full & final settelemtn letters. Appointment letters and salary slips are asked basically to confirm the designation and monthly salary. If you do not have salary slips, you can give a copy of the bank statement of your salary accounts.

      As for address, yes you need to give current and permanent one. If currently you are living at a friends place or hostel, you can give that address.

      Hope this helps. Thank you for visiting my blog.

      Kind regards,

      Sonia

  7. Hi,

    I got offer letter from wipro to join on 30-march-2011. Due to 3 month notice i asked them to extend the joining to 18-april-2011. My joining HR gave confirmation that i can join on 18-apr-2011. Prior to offer letter release i had submitted all my education,employement and identity proofs. On 18-april-2011 towards the end of day one of the HR told me that they cannnot give joining date as 18-april-2011. i asked for the reason. They cited that my educational document(engineering mark sheet) and identity proof(passport) is not looking clear.
    I asked them i had send the clear document. But they are saying to provide it again. I provided the educational document(engineering mark sheet) and passport scanned copy again on 18-april-2011. Now they are saying they need 29 days to verify this and they can not give joining date prior to this back ground check. I have already resigned from my previous employer. I asked wipro HR to provide original marksheet,passport or whatever they need with written consent that if that is found wrong they can take the legal action against me. Still the joining HR is saying background verification team’s head is not agreeing to this and they will give joining after the verification. i am without job and wipro joining HR is not giving any joining date.

    Can i sue against wipro and joining HR for mental harrasement and my salary loss.

    Looking for your quick reply.

    Thanks
    Punit.

  8. Respected Sir/Madam,

    This is Anand . completed my BE . There is an issue were in i had recently lost my 1st Sem marks card and i had all applied for a duplicate one and i have already received my duplicate marks card .
    The question here is as i have already received my duplicate 1st sem marks card submitting police report and other details to the university .

    I Just want to know does it have any problem issuing the same to the company and will the company except my marks cards. will the company except me and give me offer to work .

    Thanks,

    Anand

    • Anand,

      As you have already got a duplicate issued from the university, you can submit the same to the company. Company will accept the same.

      Kind regards,

      Sonia

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  14. Hi Sonia,

    Went through ur blog and comments history. Wish to put forward a query.

    Is it legal in India to do a credit check of employees as a part of Background check? I remember reading somewhere that RBI requires banks to do credit check of employees but dont recollect where I read it. I couldnt find any such notification on RBI website as well. Any idea if dat is true?

    What is the situation in other sectors like BPOs, IT, Manufacturing? Is credit check legal?

    Waiting for reply,
    Saurabh

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  17. Hi Sonia,

    I am Sandeep

    I have joined my current company 2 months back.

    I was first asked to join on 31-oct-11 then i was informed that we cannot take your joining as, the BV check is red on designation with my last to last company.

    But again after 4 days, I was asked to join urgently. ( i.e. on 3rd-nov was asked to join on 4th-nov a company 1500 kms away )

    This time HR said, they have got an exceptional approval on my matter hence joining is possible.

    Thing was that, my last to last company i.e. IBM has incorrectly conveyed my designation to BV agency. I

    challenged IBM on that and they replied with the correct designation later.

    I shared it with HR. Today after 2 months HR has received an audit risk and to close that. they want

    me to seperate…!!!

    Very firstly..( even if fake descripancy..) but it got highlighted prior to my joining..and my joining was

    extended specially for that..despite of that if they made me join.. then how can now they ask me to seperate..?

    How can I take it legally..? is there any hope..?

    I have relocated to another state and had my kids admissions in mid session already..

    Please Suggest.

    Sandeep
    Sandeepbodkhe@gmail.com
    9910241919

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  20. HI,
    I am about to join an IT Firm in noida. I started my career as a fresher in Noida, and being a fresher i wasnt given the offer letter intially(The company was a registered startup). I joined the company in june but was confirmed in august. Thus in my offer letter the date is given as August. The Reliving letter of the company states that i joined in June with two months non paid training period.

    Thus there is a differnnce in my offer letter and releiveing letter.
    Would this cause any issues in the BV ?
    I have joined Infosys as my secound job but they just asked for Relieving letter, but this corporate in noida is asking for Reliving letters and joining letters as well.
    Please advise.

  21. i got job in ISRO where i had my pre employment verification in that local police has passed wrong information about my residence address stating iam residing from 2009 where else i was residing from 2006 can it be a big problem please suggest me

  22. Hi,
    I am joined in SW company June 2011, Before joined they ask me to do BGC then only giving offer. I am accepted after some days they called and told BGC cleared and joined me. Exact after 10 days they told my play slip false. They ask me written letter accept that false. I am not agreed and I am leaved from the company. After 5 day they send abscond letter to my mailid and send letter to my permanent house. I am called and told I am not interested to continue.

    Today they send clearance letter to address and mailed on or before pay the amount of 30000/- for the clearance before 31 July. If not they take action in mail they mentioned.

    Can anyone please suggest me how to proceed to this mail. I need very urgent reply this is my carrier The HR is mentally torcharing me and harassing me.

    Thanks,
    Sudhakar.

  23. HAI SONIA,
    IN BV WILL THEY GO FOR BANKS TO CHECK BANK STATEMENTS,WHAT HAPPENS IF WE ARE UNABLE TO SUBMIT ANY BANK STATEMENTS ASKED BY ANY COMP BEFORE JOINING.

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