What is the True Value of an Employee Background Check to a Company or an Employer?

What is the True Value of an Employee Background Check to a Company or an Employer?

Attempting to save a few bucks by cutting corners can lead to costly mistakes, such as neglecting background verification. While it has gained traction, it still lacks the recognition it deserves. According to an Economic Times survey, a single poor hiring decision can cost Indian companies upwards of Rs 20 lakh! Additionally, India is a prime target for cyberattacks, with over 11.5 lakh incidents of cybercrimes within organizations reported to India’s Computer Emergency Response Team in 2021 alone.

The Ghaziabad Regional unit of the Directorate of Goods and Services Tax Intelligence (DGGI) recently busted a company that was significantly involved in creating and then taking control of certain smaller-sized phony organizations. Under these fictitious company names, they were sending out bills without providing any goods or services. There were almost 275 companies in this network that were solely online. They have succeeded in creating fictitious bills totaling INR 3189 crores. They also avoided paying almost INR 362 crores in taxes.

Due to their extreme nature, the financial damages resulting from these fraudulent activities are impossible to measure. There is no way to bring back the enormous amount of time and energy that is lost.

A well-known bank’s manager in Lucknow stole 45 crore rupees. He had managed, after embezzlement, to stay under the radar for around two years. The amount of money used to pursue him and the legal proceedings was significant. The bank would verify candidates through their HR Executives, the police discovered after conducting a more thorough investigation and set of questions. Rather than contracting out the fraud mitigation job to legitimate and accredited background verification companies, they were doing their own shoddy screenings of the applicants. Think about the resources that were wasted, such the money spent on hiring and training him. In this instance, it served no purpose whatsoever.

Finding employment candidates is a pricey affair. Typically, one has to enroll to a job portal and pay a subscription fee that can be as high as INR 60,000. The next step is to sort through the deluge of resumes, which can be done manually and take many working hours, or it can be done automatically by subscribing to an applicant tracking system (ATS). The monthly costs can reach $50 or more. After you’ve narrowed down the best candidates and resumes, you need to employ a subject matter expert. You may either hire someone inside to conduct all of the interviews, or you can outsource the task (particularly for highly technical hires in startups). 

After a few qualified candidates have been identified, the CEO and HR directors must approve the hire, which takes more man hours away from their already hectic schedule. After all of this, an offer letter and sometimes even a signing bonus are given. Now, after all of this, if you wind up hiring a candidate who has grossly exaggerated his/her/their resume, has a questionable reputation, etc., it would be a complete waste of money, time, and effort. Therefore, background checks are essential to weed out bad actors and only qualify the right candidates who deserve to work in your organization and contribute value. These checks can be pre- or post-employment/onboarding.

Some executives of a mid-tier IT company with headquarters in Bengaluru were confused when their new hire—a programmer—refused to participate in video calls. They had conducted video interviews with him, but when they met a totally different applicant in the office, they had their doubts. Although it is illegal to impersonate someone, some are taking advantage of the pandemic by using audio proxy technologies and video morphing. Certain individuals will stop at nothing to obtain employment, even if it means breaking the law. This ultimately leads to a great deal of time being wasted wondering why recruit productivity is not meeting targets. Client explanation of this renders the business appear incredibly unprofessional as well

Without doing a background check on the couple, an elderly Pune woman rented her apartment. They were just given permission to remain in her extra apartment after she saw their identity credentials. After a week or two, they broke into her house, using some sweetmeats they had sent her, and drugged her. Her home was broken into, stealing jewels, valuables, and cash worth several lakhs. Background checks are inexpensive, but those who are reluctant to have their backgrounds checked end up paying far more in the long run than the background check would have.

Trustworthy background check companies use proprietary platforms to conduct screenings on people. They generate reports based on proper facts and figures. Such firms employ only the most stringent data security protocols.

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FAQs

Q: What is the purpose of conducting employee background checks?

  • A: Employee background checks help employers verify the information provided by candidates, assess their suitability for a role, and mitigate risks associated with hiring.

Q: How do background checks add value to a company?

  • A: Background checks help companies make informed hiring decisions, reduce turnover rates, enhance workplace safety, and protect their reputation.

Q: What information is typically included in an employee background check?

  • A: Employee background checks may include checks for criminal records, employment history, education credentials, credit history, and professional licenses.

Q: How do background checks contribute to a safer workplace?

  • A: Background checks help employers identify candidates with a history of criminal behavior or substance abuse, reducing the likelihood of workplace incidents.

Q: Are there any legal considerations employers should be aware of when conducting background checks?

  • A: Yes, employers should comply with relevant laws and regulations, such as the Fair Credit Reporting Act (FCRA), which outlines the requirements for conducting background checks.

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