The financial crisis and following recession saw growing unemployment, but the significant numbers of business failures that also took place compounded the issue, resulting in fewer roles and greater competition for jobs. More people were chasing fewer opportunities and as a result, CV fraud boomed.
We have certainly seen a direct link between the economic downturn and the amount of inaccurate information presented in job applications. Our operational teams, which source data to corroborate CVs, have seen this type of activity increase year-on-year since the start of the financial crisis. Indeed, industry sources suggest that 39 per cent of UK businesses have become aware only too late that they have hired someone that misrepresented themselves on their CV.
Recent growth in the economy has reignited the war for talent. Employment rose by 177,000 in the three months to September, and the business population expanded by six per cent in the last 12 months. However, false details on job applications have continued to rise. It is a trend that should not be ignored.
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On all levels
Businesses spend significant sums looking for the right executives. One bad senior appointment, for example, could cost up to £10,000 to hire and the same again to replace. Add three months’ salary to manage them out of the business and potential legal fees in excess of £100,000.
The cost of recruiting and training mount up at all levels. In the retail sector, the UK’s largest private sector employer with 2.8 million employees, firms spend £1,200 on average to hire, train and equip someone to work in a store environment. It is cash critical to validate identity and ensure the CV stacks up before even thinking about putting an applicant on the shop floor.
We are certainly seeing an increase among leading supermarkets to check a variety of data sources before hiring an applicant. This includes checking the identity, financial status, criminal records, education and previous employment – all to qualify the history of a prospective employee. Sadly, many smaller retailers too often do not.
We have also seen an increase in the number of organisations checking criminal records, and with good reason. In the public sector, of course, it is a statutory requirement to check individuals in sensitive jobs, such as carers or teachers. But in regulated industries, such as banking, financial and insurance services, where employment has grown over the past year, the need for checks has also been increasing. There are indications that theft of personal data by employees is rising. The financial losses that could occur from hiring a thief and the potential exposure in these sectors can be avoided. Industry best practice advises rechecking your existing employees, dependent on their role and risk exposure. For example, performing random criminal record checks yearly.
And with people across the organisational hierarchy having access to far larger sums of money and trade secrets, there are cases where it is appropriate to take measures to better understand if the candidate is financially vulnerable, by checking whether they have any CCJs or bankruptcies linked to their name.
The shortage of graduate level jobs has also impacted the honesty of the information presented on CVs. We are seeing evidence of graduate recruitment increasing, but only 10 per cent of employers check educational qualifications properly. There is a danger that CV manipulation could become accepted behaviour for Generation Y, so graduate hires should be screened, including checking information directly with university student records.
Meet the threat
There is growing recognition of the increase in false information on CVs and applications and the risks businesses run by hiring the wrong candidates. With an improving employment market likely to continue and the danger of falsifying information becoming the norm, there is a need for firms to ensure that only the best candidates will be snapped up.
This means a risk based approach to candidate checking, focusing most effort on those with access to customers, money or sensitive data, provides suitable protection. It is vital that these procedures apply to temporary recruits, who often have significant access to organisational assets and relatively little to lose.
Being open about the use of screening does mean that those with something to hide will be deterred from the start of the process. 15 per cent of candidates typically drop out of the recruitment process when faced with the prospect of giving permission to a background check.
The use of data has dramatically increased the speed with which candidates can be checked today, and specialist outsourcing can enable checks that can only be made over the telephone to be completed cost-effectively. Vigilance in both areas is vital to ensure there are no repercussions for the firm and only the right people are hired.
For further information please contact Mat Armstrong mat.armstrong@experian.com
