Each and every time a candidate for a new position gets shortlisted down to the final few interviewees; HR departments start that inevitable ball rolling to carry out background checks, and with fraud in the work place at an all time high, so the checks will become more rigorous.  Since the financial crisis of 2007-2009 it is reported that fraud has almost doubled and is likely to escalate in the future, perhaps due to job applications become more competitive.

The U.K. Fraud Prevention Service suggests that fraud due to discrepancies and embellishment on CV’s cost the UK business community somewhere in the region of $1.4 Billion in 2005.  As of August 2009, nearly one in 5 applicants have a major lie or discrepancy on their application, a quite staggering figure.

Background checks are important for businesses when taking on new employees for a number of reasons;

 

1. To ensure the applicant is duly qualified to carry out the task within the role
2. To protect the integrity of the business
3. Checking a potential employee’s work history
4. Establishing and evaluating any other potential risks
5. Ensuring an individual’s suitability to a role

The amount and depth of background checks a business may wish to carry out would largely depend upon which business sector they are involved with.  The financial services sector has carried out quite rigorous background checks for as long as I can remember as have government institutions such as the police, armed services, schools and any arena where one might find themselves in positions of trust or dealing with vulnerable people.

According to the Privacy Rights Clearinghouse; "Some people are not concerned about background checks, others are uncomfortable with the idea of investigators poking around into their personal histories. In-depth checks could unearth information that is irrelevant, taken out of context, or just plain wrong. A further concern is that the report might include information that is illegal to use for hiring purposes or which comes from questionable sources."

Unfortunately, whilst the above may be true, background checks are here to stay. The risks for employers grow ever larger and whilst they continue to be liable for their employees’ actions they will want, and need to know the characters that they are going to take on.

The types of background check an employer may decide to carry out prior to taking on new staff may encompass some of the following;

• Employment References
• Education Verification – Exam grades, Verification of degrees and any professional qualifications
• Character Reference Check
• Identity Checks - whether the applicant is who he or she claims to be.
• Credit History - bankruptcies
• Criminal History Report
• Immigration checks – right to work

The difficulty for employers in either obtaining or indeed submitting references and background checks is that with today’s complex employment law and regulations it can be difficult to give an accurate account of an employee’s track record and work ethic without breaching regulations, therefore a business may find it simpler to refuse to give a reference rather than enter into a position of risk.

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In the U.S. If a consumer report is used as a factor in an adverse hiring decision, the consumer must be presented with a "pre-adverse action disclosure," a copy of the FCRA summary of rights, and a "notification of adverse action letter." Consumers are entitled to know the source of any information used against them including a credit reporting company. Consumers must also consent in order for the employer to obtain a credit report.
Employment law has always been a mine field of information, but since fraud has been highlighted throughout industry, employers are likely to be more robust with their procedures for carrying out background checks. The unemployment line is reaching saturation point and the priority to take people on quickly in order to gap fill is likely to change to ensure the best individuals with the highest and most revered qualifications are taken on and this is where the hub of the problem appears to be.

 

Tags: credit repair, background checks, Jobs