Business Risks of Not Including Employee Background Verification as a Part of Your Hiring Process

August 11th, 2021

In most countries, candidate background checks are an essential part of the interviewing process. Failing to screen potential employees is usually unheard of. Yet, in India, this process is frequently overlooked. With vague laws governing the process, many are comfortable with scouring a candidate’s basic details and hiring them. But is this the right thing to do? No, it’s not.

Acquiring and managing talent involves a huge amount of investment of both time and resources from the company. To avoid spending this on a wrong hire, you must conduct a background check. Ensure that the person is who they’re claiming to be and cross-check everything mentioned on the resume. This includes verifying educational qualifications, work experience, certifications, and awards, as well as any criminal history, and other red flags. There are many business risks associated with failing to do employee verifications. Let’s explore a few of those.

Loss of Money

If your hire has to be terminated later on or decides to leave for another company, you’ll have to bear many associated expenses, such as the recruiter’s logistical costs. A bad hire can cost your company time and money used to recruit and train them, as well as resources used to train their replacement. This includes agency fees, advertising, salaries, and the HR recruiter’s time spent on interviewing the candidate. Not only will you suffer financial losses by spending these precious resources on the candidate – you’ll incur double the cost to replace them. Then there’s the added expense of in-house training that will go to waste. The worst loss would be if the new employee is unable to perform up to the mark. This can be an expensive loss for your company – both financially and in terms of productivity.

Damage to Reputation

A single incompetent or corrupt employee can lead to a snowballing series of events that can have unimaginable negative consequences. The current atmosphere of the media in India is at its most sensationalist, and the public are deeply unforgiving of defaulting companies and entities. One bad egg can lead to legal and regulatory repercussions – but also generate tons of negative publicity for the company they work for.

Decrease in Morale

A bad hire is an unnecessary distraction and lowers the overall team and company morale. Additionally, hiring someone who isn’t actually qualified for the role can bring down entire projects if they’re unable to understand the work and effectively execute tasks. A team relies on the whole unit’s performance – each individual needs to pull their weight. Not doing so can have a long-term negative impact on the office environment.

Fake Qualifications

Many individuals fake their educational qualifications, certifications, and prior work experience. It’s easy to forge the documents using Photoshop or some other photo-editing software. While some discrepancies can be minor, others may be more large scale – such as lying about where they worked previously and at what position. A poorly qualified individual can take a huge chunk of the supervisor’s time. This time is best utilised in helping the business grow – not telling your employee how to do their job.

Dishonesty Over their Previous Employers

If there are vague reasons as to why your candidate left their previous employers, chances are there’s a red flag in there somewhere. A background check will find out whether there were any allegations of misconduct or even acts like financial misappropriation. Worse still is if they have lied about working at a particular company. A background check can verify whether they were truly employees of that company or not.

Future Actions

Analysing past behaviours helps understand future actions. It’s always better to have transparent conversations now than to realise later on that your candidate had left their last company for alarming reasons. Another detail would be to learn about the candidate’s personal finances. Have they accumulated so much personal debt that they’ll be inclined to commit fraud?

Avoiding a Mismatch in Culture

Some employees may not live in an environment that’s conducive to remote work. Similarly, some offices may not be able to allow leeway for new employees to learn on the job. It’s tough yet important to understand whether both parties are in agreement over the expected work culture. This can include setting a schedule or deciding to go with flexible timing. Boundaries should be made clear and past patterns will give you a better understanding of what you can expect from your potential hire.

DigiVerifier is a technology solution to help companies conduct background verification. We use the candidates ITR and Provident Fund details to do the background check, so it’s quick and reliable. By doing this, you will have a clear idea of your candidate’s last drawn salary, where they really worked, and more. With newer cases of white-collar crimes taking place in India, it’s become more important than ever to conduct checks to protect the interest of the company – but also of your investors, customers, employees, and society as a whole. That’s why using a reliable background screening solution like ours is essential to conducting an effective candidate verification.

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