How to handle the “Human Factor”: Top 3 risks when hiring
Talent acquisition in the hiring process requires a great deal of investment in both time and effort for the hiring manager and would involve even greater repercussions if the chosen candidate turns out to be a bad hire. Due to the ever-growing competitive nature of job seeking, it is becoming increasingly likely that a prospective employee may embellish their CV, making themselves appear more attractive to the employer. When hiring new employees, the company becomes vulnerable to human capital risk, which is often thought as the most damaging threat to an organisation yet is also the least well-managed. Hence, performing the appropriate background screening before confirming the hire can save the company from unnecessary costs later down the line.
Top 3 risks when hiring new talent
1. False Credentials
It is thought that generally, around 40% of all job applications contain some fraudulent information, and such a high percentage hence displays the necessity for thorough background checks in the hiring process[1]. One of the most common lies tend to be extending dates of employment to hide a suspicious employment gap which the candidate wants to cover up. Similarly, claims of fraudulent degrees found are on the rise which is a great indicator that the candidate is in fact not qualified for the role. Other false credentials may include exaggerating daily activities in job roles or improving the job title. Other times you may expect to find fraudulent references, or at least references that are not suitable[2].
2. Breach of Trust
In addition to the risks that a hire with false credentials may impose on the company in terms of being unqualified for the role, the candidate’s willingness to lie on their résumé can be a strong indicator of an untrustworthy candidate. If they are willing to lie to reach their desired position, then what else may they lie about within the company?
With access to sensitive company information and documents, and company reputation on the line, hiring a person that can be trusted to perform their role is critical. For example, theft within a company is estimated at roughly 5% of revenues each year[3]. Hence, pre-employment background checks can also act as a judgment of character of the prospective employee for the hiring manager.
3. Negligent hiring and employer liability
As well as having a background screening process in place having the power to discourage untrustworthy candidates, pre-employment background screening conveys that the employer has exercised the necessary due diligence as a preventative measure to protect the company from legal harm. Pre-employment background checks can also check for criminal checks, social media checks and right to work checks; all areas in which an employer can become liable if the correct due diligence process hasn’t been conducted. An employer who hires a candidate without the right to work “can now be subject to a maximum civil fine of £20,000 per individual and/or a criminal sanction of an unlimited fine or imprisonment of up to 6 months”, Ben Mason- employment law associate at Aaron & Partners LLP[4]. Hence, background checks can reduce the likelihood of encountering risk later on.
A cost-effective risk-management tool?
According to the US Department of Labor, a bad hire can cost the company at minimum 30% of that employees first-year salary[5], whilst Fast Company says that one quarter of companies surveyed estimated that a bad hire cost them at least $50,000 in the past year[6]. Hence, pre-employment background screening is a cost-effective risk-management tool to help deter fraudulent candidates, mitigate risk to the company and protect the company from liability in the future. This keeps the company safe and acts as an effective risk management tool in providing integrity and confidence in hiring new talent.
Let’s Talk!
If you have any further questions or interest in implementing background screening solutions, please contact us.
CRI Group has safeguarded businesses from any risks, providing investigations (i.e. insurance fraud), employee background screening, investigative due diligence, business intelligence, third-party risk management, forensic accounting, compliance and other professional investigative research services. In 2016, CRI Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. Contact ABAC® for more on ISO Certification and training.
References:
[1] https://www.forbes.com/2006/05/20/resume-lies-work_cx_kdt_06work_0523lies.html#5fd1c99c78b5
[2] https://www.thebalancecareers.com/do-you-know-who-you-re-hiring-1919148
[3] http://www.greenhouse.io/blog/4-risks-your-company-takes-when-background-checks-are-not-a-part-of-your-hiring-process
[4] https://www.personneltoday.com/hr/background-screening-eight-key-checks-employers-must-make/
[5] https://www.forbes.com/sites/falonfatemi/2016/09/28/the-true-cost-of-a-bad-hire-its-more-than-you-think/#652e877b4aa4
[6] http://www.greenhouse.io/blog/4-risks-your-company-takes-when-background-checks-are-not-a-part-of-your-hiring-process
Fake degrees and fake employment certificates? What now?
In today’s business environment, fraudulent practices and manipulating the trust of others is so commonplace that people do it very often and with confidence. Unfortunately, this is also true when it comes to employment, as some potential candidates will present fake and bogus background certificates to try to gain an edge in the hiring process. Shedding light on this concern, CRI Group would like to discuss one such issue which is of fake and bogus background certificates.
Uneducated, untrained and incompetent personnel often rely on fake degrees and fake employment certificates to get hired into positions for which they are unqualified. Many countries still lack a culture in which verification is conducted as a matter of course to establish employment credentials, and CRI Group’s investigators have seen countless incidences in which degrees were discovered to be fake – including cases in which an employee using fake credentials had been at their position of employment for more than a decade!
The practice is so common that many are doing it, while just a small percentage are caught. In Pakistan, for example, even well-known personalities have been found to be deceptive, including former senator Yasmeen Shah, who presented a fake Bachelor of Arts Degree (The Express Tribune 2017) and Usman Dar of Pakistan Tehreek E Insaf, who provided a fake Masters Degree (Pakistan Today 2017).
Where do people secure fake degrees so easily? There are numerous agents that help to make such bogus degrees – at a cost. For example, there was the famous scandal involving Karachi-based IT company “Axact Private Limited” who was selling fake degrees and diplomas. (Naqvi 2015)
CRI Group investigated one such individual who provided a Bachelor’s Degree with the major “Information Technology” to our client (one of the largest and fastest-growing multinational companies in Pakistan), which was duly processed by our team for verification and revealed to be a bogus degree. When we confronted the individual, instead of admitting his mistake, he argued and questioned our methods while submitting another bogus degree of “Bachelor of Science,” which he claimed was the right one.
CRI Group roundly condemns such fraudulent practices, and we seek to make people aware of the importance of background screening and its essential role in the recruitment process. There should be a paradigm shift from “Trust all Employees” to “Trust but Verify,” so that in this era of competition the deserving candidate for a particular job gets the opportunity to hold the position that he/she deserves. In order to prosper, organisations must eliminate unsafe hiring practices and take measures to be aware of such attempts.
Bibliography
- The Express Tribune. 2017. “Ex-senator Yasmeen Shah’s BA degree declared fake.” November 13. https://tribune.com.pk/story/1557286/1-ex-senator-yasmeen-shahs-ba-degree-declared-fake/ .
- Naqvi, Hassan. 2015. “Axact wasn’t just selling fake degrees!” Pakistan Today. May 24. https://www.pakistantoday.com.pk/2015/05/24/axact-wasnt-just-selling-fake-degrees/ .
- Pakistan Today. 2017. “Britain’s education dept does not recognise Masters degree of PTI’s Usman Dar: report.” November 28. https://www.pakistantoday.com.pk/2017/11/28/britains-education-dept-does-not-recognise-ptis-usman-dar-degree-report/.
- Shehzad, Rizwan. 2017. “Axact fake degree case: Judge confesses to receiving Rs5m bribe to acquit Shoaib Shaikh.” THE EXPRESS TRIBUNE > PAKISTAN. June 16. https://tribune.com.pk/story/1436815/axact-fake-degree-case-judge-confesses-receiving-rs5m-bribe-acquit-shoaib-shaikh/.
Top 4 Red flags during a Merger & Acquisition
The business world is often transitional, and the landscape changes as entities grow or industries change – and the players involved have to change with it. Mergers and acquisitions are examples of these “transitional times,” and they are also among the most critical times to conduct proper and thorough due diligence.
There are inherent risks involved with the “unknown factor” that outside entities represent. By nature, merging with another entity, or acquiring it altogether, can be an exciting time, but background screening is especially crucial at this juncture.
When conducting due diligence before a merger or acquisition, what are some of the red flags that should make you take a closer look?
CRI® Group has conducted numerous due diligence engagements for clients undertaking major business deals. Our agents have also conducted many investigations for organisations that failed to do proper due diligence, and as a result became victims of fraud. Our findings in those investigations have provided a road-map of things to look for, and be cautious about, when in the pre-merger or pre-acquisition stage.
Here are a few red flags for any organisation undergoing a merger or acquisition:
1. Legal issues
When merging with or acquiring another entity, due diligence will uncover legal proceedings, including any troubling issues that the entity might have been trying to keep hiding. Past or current litigation or even criminal proceedings have been uncovered in background checks.
2. Credit risks
Some potential partners might be financial landmines, bringing the kind of baggage your organisation cannot afford. Has the entity claimed bankruptcy? Have they dissolved prior companies or are they faced with debtor filings? Proper due diligence will uncover these and other financial risk factors.
3. Lack of experience
If your organisation is looking to partner with a contractor or service provider, what is their experience level in the industry? Have they successfully completed past projects of a similar scale? Nothing can hurt your reputation with clients and customers more than having your deliverability affected by a contractor that cannot handle to job.
4. People problems
Hopefully, your organisation conducts thorough employee background screening of all potential and current employees. Can you say the same for the entity you are considering for a merger or acquisition? If not, the risks are great: fraud risks, criminal conduct, even employees without the needed training or skill level doing dangerous jobs could all come back to damage your own organisation and reputation. Comprehensive and thorough background screening, including of owners and principals (perhaps these are most important) will uncover such risks.
None of these red flags, on their own, are necessarily absolute roadblocks to a proposed merger or acquisition. Some scenarios can be explained, and certain circumstances simply require a fuller explanation.
But the key is having the information. In business, being surprised is generally not a good thing. This is never more true than when dealing with mergers and acquisitions.
Staying one step ahead of any critical risk to your organisation is part of being an effective business leader. Contact us today and get your FREE QUOTE now!
Who is CRI® Group?
Based in London, CRI® Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are we have the network needed to provide you with all you need, wherever you happen to be. CRI® Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.
In 2016, CRI® Group launched Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body established for ISO 37001:2016 Anti-Bribery Management Systems, ISO 37301 Compliance Management Systems and ISO 31000:2018 Risk Management, providing training and certification. ABAC® operates through its global network of certified ethics and compliance professionals, qualified auditors and other certified professionals. As a result, CRI Group’s global team of certified fraud examiners work as a discreet white-labelled supplier to some of the world’s largest organisations. Contact ABAC® for more on ISO Certification and training.
Background screening; your first line of protection
An extra layer of security
As a global investigative firm with a network of 76 agents worldwide, CRI® Group has the resources and expertise needed to implement thorough and comprehensive pre-and post-employment screening. As part of our EmploySmartTM program, we have conducted more than 187,000 individual background checks, serving top companies of many industry sectors worldwide. CRI® Group’s thorough background screening includes the following:
- Identity: Some job candidates will fabricate a new identity, especially if they have something to hide. Proper screening can verify addresses, phone numbers and other identifying information to confirm that they are who they claim to be.
- Employment: Screening will verify past employers, locations of past employment, dates employed, salary levels, reasons for leaving, position titles, gaps in employment history and pertinent contact information.
- Education: Education verification is needed to confirm school grades, degrees and professional qualifications.
- Criminal history: International criminal records searches are critically important and should include any convictions for the applicant in the requested jurisdictions.
- Character references: Sometimes overlooked is the need to follow up on references provided by the applicant.
- Credit history: As permitted by local laws, financial and credit history should be reviewed, as fraud statistics have shown financial distress to be a key red flag for fraudulent behaviour.
Case studies from our experience
While conducting expert background screening for a client, CRI® Group uncovered disturbing details about an applicant. When this individual’s previous employers were contacted, one of them reported that the applicant was hired without any prior experience, was trained for a couple of months, and then terminated due to committing cash embezzlement as well as participating in harassment and workplace violence. A second employment verification revealed his termination, as he caused a financial loss to the company.
In another case, the CRI® Group screened 18 degrees claimed from a single university. By contacting the university and examining documents and records, CRI® Group found an astounding 5 of them (27.7 per cent) to be fake and/or forged. In the end, whether your company employs 10 or 1,000, your employee roster doesn’t have to be a minefield of mysteries or unknowns. With effective background screening, your business will be more secure, and your trust in your employees well-placed.
Who is CRI® Group?
Based in London, CRI® Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, TPRM, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI® Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.
Are you ready to EmploySmart? Meet us at SHRM’18
Meet us at the 2018 SHRM Annual Conference & Exhibition in Chicago, to demonstrate a commitment to your professional development and learning about tools and resources you need to best serve your organisation’s HR needs.
One of those critical needs is helping your organisation prevent fraud. Human resources managers and specialists are at the front line of fraud prevention, as hiring processes and background checks can help screen out potential fraudsters before they even get in the door.
CRI® Group understands the challenges posed by those who can harm your organisation – and we have the solutions. That’s why we’d love to meet you at the SHRM conference. We’ll discuss how EmploySmart™, our pre-employment background screening process, can boost your fraud prevention efforts and provide a “boots on the ground” approach to extensive background checking.
EmploySmart™ provides a close examination of job candidates including their identity, criminal background, education credentials, job history and references; along with financial and credit checks (as permitted by law), and bankruptcy and civil litigation checks, among many other details.
CRI® Group invites you to schedule a quick appointment with us to discuss in more detail how EmploySmart™ can help you and organisation. Are you ready to EmploySmart™? We look forward to seeing you in Chicago!
Who is CRI® Group?
Based in London, CRI® Group works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, TPRM, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider. We have the largest proprietary network of background-screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI® Group also holds BS 102000:2013 and BS 7858:2012 Certifications, is an HRO certified provider and partner with Oracle.
In 2016, CRI® Group launched the Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence – an independent certification body that provides education and certification services for individuals and organisations on a wide range of disciplines and ISO standards, including ISO 31000:2018 Risk Management- Guidelines; ISO 37000:2021 Governance of Organisations; ISO 37002:2021 Whistleblowing Management System; ISO 37301:2021 (formerly ISO 19600) Compliance Management system (CMS); Anti-Money Laundering (AML); and ISO 37001:2016 Anti-Bribery Management Systems ABMS. ABAC® offers a complete suite of solutions designed to help organisations mitigate the internal and external risks associated with operating in multi-jurisdiction and multi-cultural environments while assisting in developing frameworks for strategic compliance programs. Contact ABAC® for more on ISO Certification and training.
Employee Screening Process
How do you know the candidate you just offered a role to is ideal? Are you 100% sure you know that everything they’re telling you is the truth? 90%? They showed you a diploma; how do you know it’s not photoshopped? Did you follow the correct laws during your background check process? Background checks and necessary screenings are vital to avoid horror stories and taboo tales within HR, your business or even your brand – simply investing in proper employee screening can save you time, money and heartbreak. A complete employee screening process will result in fewer applications with serious discrepancies – it increases the quality of new hires due to an improved applicant pool and selection process. EmploySmart™ provides full in-depth background screening services for employees and candidates at all levels, from senior executives to shop-floor employees.
How Well Do You Know The People You Invest In?
CRI® Group has developed EmploySmart™, a robust new pre-employment background screening service to avoid negligent hiring liabilities. Ensure a safe work environment for all. EmploySmart™ can be tailored into specific screening packages to meet the requirements of each specific position within your company. We are a leading worldwide provider specialised in local and international employment background screening, including pre-employment and post-employment background checks.
Pre-employment checks/background checks/screening benefits:
- Reduce turnover & training costs
- Gain a competitive edge through the hiring of better people
- Increase productivity – help your employees be more productive, knowing that everyone employed by your company has been screened.
- Set your company apart & win more business
- Reduce employee-related problems
- Protect company reputation/brand & customer relations
- Comply with mandates created by state or federal law for certain industries
- Increase retention
- Reduce negligent hiring claims
- Avoid violence in the workplace (threats of violence & actual violence)
- Reduce theft & espionage
- Avoid lawsuits & the costs associated with the defence.
- Avoid loss of goodwill.
Pre-employment checks/background checks, what are they?
These checks are essentially an investigation into a person’s character – inside and outside their professional lives. Some checks you probably already carry out in-house, such as candidate’s qualifications (documents provided), work history (with a reference check), right to work in the country and even a quick social media presence scan. However, we provide a full in-depth background screening service for candidates and employees at all levels – from senior executives through to shop-floor employees:
- Address Verification (Physical Verification)
- Identity Verification
- Previous Employment Verification
- Education & Credential Verification
- Local Language Media Check
- Credit Verification & Financial History (where publicly available)
- Compliance & Regulatory Check
- Civil Litigation Record Check
- Bankruptcy Record Check
- International Criminal Record Check
- Integrity Due diligence… and more.
When should I conduct pre-employment checks?
Our pre-employment screening services will help you avoid adding potential fraudsters and other bad actors to your staff. These checks can be implemented before or after a job offer (with each having its pros and cons).
How to collect references, and what to ask?
Because it is impossible to know how your candidate will work daily from just one interview, you will need references. References are a great way to find out whether your candidates are suitable for the role or will fit with your company culture. A primary reference check asks for:
- Employment dates
- Employment main responsibilities
- Attendance record
- Any disciplinary actions against them
- Any reasons why they shouldn’t be employed
These references will help you back up their CV – however, many candidates tend to exaggerate or misrepresent themselves. Our EmploySmart™ team goes beyond to get a fuller picture for you:
- Greatest strengths?
- Are they suitable for the role they’ve applied for?
- Would they rehire the candidate?
- Suitable management style?
- Do they have any leadership skills?
- Situations in which they have excelled at?
Some companies have policies of not giving references and just providing necessary employment details, while others direct you towards HR, but the EmploySmart™ team is persistent.
What specific legal requirement should I ask?
You will need to check if they have the right to work in the region you are recruiting for. You are subject to statutory penalties if you employ foreign nationals who don’t have the correct visas. You will need to request criminal records checks depending on the role you are recruiting. Such roles with children or vulnerable people are highly regulated – and all of these differ from country to country.
CRI Group™ carries the burden of knowing the laws, so we can assist you with staying compliant and helping you to make the best decisions for your company’s needs. We have established an interdisciplinary team of experts in employment law, best practices and data protection. We can manage your employment background screenings across borders for you! Country by country, we have documented the different approaches to employment screening, ensuring we operate in harmony with local culture and within the limitations of local legislation.
With extensive local language capabilities, flexible working patterns and time zone intelligent workflow, we provide a comprehensive and fully compliant global screening service.
At CRI Group™, we specialise in employment screening, working as trusted partners to HR and recruiting managers of corporations and institutions worldwide. Our people work with energy, insight and care to ensure we provide a positive experience to everyone involved – clients, reference providers and candidates.
CRI Group™’s unique identity and vision evolved from our fundamental desire to support our clients and candidates. We have a passion for Screening and a simple belief in setting new standards. These qualities fuel our commitment to excellence and drive our culture.
Our EmploySmart™ background screening services expose vulnerabilities and threats within your organisation and can significantly reduce business and financial crime, fraud and malpractice within your workplace. Our experienced EmploySmart™ Team can safeguard your data security and your business integrity while you can focus on human conversations and interactions. Together, your organisation can deliver outstanding screening experiences.
We provide a host of professional services to HR managers representing significant corporations worldwide. Employees should be screened regularly to reveal any new information relevant to the business. That’s why our background investigations services also include:
- Employee monitoring and risk management
- Data protection compliance
- Employee testing and confidentiality
- Employee risk management
- Post-employment background checks
CRI Group™ is trusted by the world’s largest corporations and consultancies – outsource your employee due diligence to an experienced provider, and you will only ever have to look forward, never back.
BS 7858:2019 Screening: extra security level for your business and employees
CRI Group™ is trusted by the world’s largest corporations and consultancies – outsource your employee due diligence to an experienced provider, and you will only ever have to look forward, never back.
Get answers to frequently asked questions about background checks/screening cost, guidelines, check references etc. This eBook of compiled list of background screening related questions taken as a whole is the perfect primer for any HR professional, business leader and company looking to avoid employee background screening risks. It provides the tools and knowledge needed to make the right decisions.
Working with CRI Group™, you get:
- Extensive global coverage, with expertise in domestic and international Screening; one of the largest, most experienced and best-trained integrity due diligence teams in the world
- Our team of more than 50 full-time analysts is spread across Europe, the Middle East, Asia, and North and South America and is fully equipped with the local knowledge to serve your needs globally.
- The ability to manage multiple background checks online
- Quick turnaround times
- Our solutions are easily customisable and flexible, and we will tailor our scope to address your concerns and risk areas, saving you time and money.
- High-quality searches, backed by numerous checks and quality controls
- We have a flat structure which means that you will have direct access to senior staff members throughout the due diligence process.
- Our multi-lingual teams have conducted assignments on thousands of subjects in over 80 countries, and we’re committed to maintaining and constantly evolving our global network.
- Our extensive solutions include due diligence, employee pre and post background screening, business intelligence and compliance, and facilitating any decision-making across your business, no matter what area or department.
Who is CRI Group™?
Based in London, CRI Group™ works with companies across the Americas, Europe, Africa, Middle East and Asia-Pacific as a one-stop international Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions provider.
We have the largest proprietary network of background screening analysts and investigators across the Middle East and Asia. Our global presence ensures that no matter how international your operations are, we have the network needed to provide you with all you need, wherever you happen to be. CRI® Group also holds BS 102000:2013 and BS 7858:2012 Certifications, and is an HRO certified provider and partner with Oracle.
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