A talent crunch and pressure to recruit are leading Indian companies into a new fight—against fake résumés.
Till now, the problem was thought to be restricted largely to the information technology (IT), IT-enabled services (ITeS), banking and insurance sectors. In the last six months, consumer goods, retail and health care firms have seen increasing instances of staffers fudging résumés and claiming non-existent qualifications.
Companies are gradually waking up to the problem. Ashish Dehade, managing director, West Asia, First Advantage Pvt. Ltd, a background screening and verification company, says that more than 90% of the registered companies still don’t undertake detailed background checks on education, address, previous employment, criminal record, if any, and references.
But if most companies are making do with limited lines of enquiry, some large companies have begun to insist on comprehensive checks. The growing importance of candidate verification has spawned a new business opportunity for background screening companies.
ICICI Bank Ltd, for instance, found that of the 17,000 new recruits in 2007, 400-500 had misrepresented facts in their résumés, says K. Ramkumar, group head of human resources, or HR, for the bank.
Sony Entertainment Network, now known as Multi Screen Media Pvt. Ltd, puts the percentage of fudged résumés at 3% of total new hires. The discrepancies include falsification of educational qualifications, work experience, job roles and projects, and inflated compensation figures. Some also submit fake certificates and documents, say HR managers.
“It is a serious issue that can have long-lasting repercussions,” says Rohit Mahajan, executive director, forensic services, KPMG India. A bad hire not only impacts business efficiency, but can have consequences such as theft of intellectual property, leakage of confidential information or misuse of resources.
Experts say that in the current talent crunch scenario, potential employees see an opportunity to overstate their qualifications to meet job specifications. “In a booming market, recruiters are under pressure to hire people in a short time, and a background check is most often done cursorily,” says A. Sudhakar, executive vice-president of HR at Dabur India Ltd.
Managers link the growing incidence of discrepancies in résumés to companies ramping up operations and hiring. “Whenever there are large job opportunities, some candidates and recruiting firms don’t hesitate in cheating for gains,” says Dehade.
(Illustration: Malay Karmakar / Mint)
Companies such as Wipro Ltd , Infosys Technologies Ltd and Satyam Computer Services Ltd take action against those involved in fudging résumés, including terminating services and blacklisting such candidates and recruiters.
Last year, ICICI Bank set up a fraud prevention unit. It functions as an independent auditor and keeps an eye out for risks and frauds threatening the organization, including recruitment-related fraud. All new employees at the bank have to undergo full background checks. Like many organizations, the bank outsources its candidate verification process to specialist agencies, says Ramkumar.
While a number of companies sign up with specialist agencies, others—such as Dr Reddy’s Laboratories Ltd and Samsung India Electronics Pvt. Ltd—keep track through an in-house reference check process.
Prabir Jha, global head of HR at Dr Reddy’s Laboratories, says that the HR department not only calls up referees provided in a résumé, but also contacts the candidate’s previous boss, peers and juniors before hiring. “We did not hire a senior executive with an otherwise strong track record after we found out from his former colleagues and juniors that his people skills were poor,” says Jha. “For us, working in a team is one of our core values and we obviously can’t compromise on that.”
Jha adds that the extent of background checking also depends on the nature of the industry. “The space that we operate in is a niche space and, therefore, finding out about an employee is easier in comparison to, say, the IT or ITeS industry.”
Multi Sscreen Media has dedicated people within its sourcing team, which oversees the background check process. The company also hires third-party agencies for the verification process, says senior vice-president, HR, Anjani Kumar.
Since 2006, companies across sectors have begun taking background checks seriously. Earlier, companies would verify the antecedents only of senior executives; now some are doing it across all levels.
“Even five years ago, there was no concept of background checking in the corporate world; the practice has only picked up in the last couple of years,” says Mahajan. “Companies are realizing that the possibility of fraud is higher among people with integrity issues than those who don’t (have such issues).”
KPMG’s forensic practice helps organizations conduct background checks. The key offerings of KPMG’s background verification services include database verification, which helps clients ascertain if the candidate has been reported for any misconduct; education, employment and reference verification; criminal verification; and address verification.
First Advantage’s Dehade gives an example of how senior executives, too, aren’t above all this. Recently, a centre head was being considered for a senior post at a multinational bank. The mid-level executive was moving from a technology company and had impeccable credentials. After handing him the offer letter, the bank got First Advantage to do a background check.
During investigation, it was found that the candidate had deliberately not submitted his relieving letter. “On probing and checking with his previous employer, it was found that the candidate was terminated on grounds of improper conduct,” says Dehade, who declined to name the bank.
Tata Consultancy Services Ltd, or TCS, which recently sacked 20 employees for furnishing fudged résumés, has a team within its recruitment unit that oversees the verification process. At TCS, a candidate’s credentials are verified on various parameters through specialized agencies
The increasing focus on verification by business houses can be gauged by the growth of background screening companies.
The space includes Poway (California)-based First Advantage, which has an Indian unit, Mumbai-based Screen Facts Services Pvt. Ltd , Gurgaon-based AuthBridge Research Services Pvt. Ltd , Noida-based Onicra Credit Rating Agency of India Ltd, and Bangalore-based Global Screening Services . According to First Advantage, there are more than 200 background screening companies in the country.
First Advantage, which started operations in India in 2001, grew to 300 employees by the end of 2005. Now it has a staff of 1,000. It had only one client in 2001; today it has more than 1,000 companies seeking its services. In March, First Advantage acquired Kuala Lumpur-based TP Verify Screening Services Pvt. Ltd along with its 125 employees in India and about 250 people across locations in the Asia-Pacific.
Similarly, AuthBridge has grown from three employees in August 2005 to 200 now. The number of clients has increased from just two in 2005 to 150-plus. In the last year, AuthBridge added three sales offices in Mumbai, Bangalore and Hyderabad.
Still, most companies make do with limited enquiries, restricting the process to reference or address checks. “The reasons preventing companies from undertaking proper verification range from lack of awareness, nature of the industry they operate in (the prevalence rate of fake résumés is higher in fast-expanding general industry sectors), time constraints, resources and costs involved,” says Dehade.
The cost of employee checks can range from Rs350 to Rs7,000 for junior- to mid-level recruits. For senior-level recruits, it ranges from Rs12,000 to Rs15,000, depending on the level of due diligence a company requires.
“There are also no defined and streamlined processes to conduct checks at institutes, police stations,” says KPMG’s Mahajan
The seriousness with which the issue is tackled varies from company to company. “While some organizations treat a difference of even three days in the past employment tenure as a serious discrepancy, there are organizations which let pass even a difference as high as 30 days as an area of minor concern,” says Ajay Trehan, chief executive officer, AuthBridge.
“Companies in India don’t lodge complaints of white-collar fraud with the police. In that sense, we are letting the same people (fraudsters) circulate in the system,” says Ramkumar of ICICI Bank. “So, unless an organization is very vigilant, it is difficult to curb this menace.”
The industry body for technology companies,National Association of Software and Services Companies (Nasscom), is the only organization which has a centralized database of employees working in the IT and business process outsourcing (BPO) sectors. The data contains third-party verified information pertaining to the education, career track record and personal details of professionals in the IT/BPO sector.
Unlike the IT and ITeS industries, says Ramkumar, they have no central database where employers can notify candidates or recruiters adopting fraudulent practices. For instance, candidates whose résumés have anomalies in employment tenure in excess of three months are asked to leave the organization, he adds.
“However, a smart company will make that extra effort to ensure that its employees have integrity and conduct themselves ethically,” says Dabur’s Sudhakar.
Dabur’s HR team conducts pre-and post-employment reference checks and asks recruitment agencies to verify the personal credentials of candidates. For critical job roles, it hires independent agencies for background checks. Across the board, too, other companies are becoming more serious about the process as they become aware of the threat unscrupulous employees can pose.
Look Out For:
1. Large unexplained gaps between two employment periods or between education and start of employment
2. Change of jobs at short intervals
3. Jobs at a series of unknown/nondescript companies (not easily traceable)
4. Mention of a period of self-employment or work for a relative
5. Discrepancies between the type of work experience and technical skills claimed
6.Too many details missing in a résumé—residential address lacks house/street number or pin code, work experience data has no mention of projects worked on, clients handled, etc., or educational details do not include any mention of year passed, specialization, subjects, etc.
7.Inability to produce original documents, including degree certificates, marksheets, salary slips, bank statements, offer letter and relieving letter.
(Source: First Advantage Pvt. Ltd)