Be careful not to be penny wise, pound foolish – Invest in background screening!

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Blog ImageTake care of the pennies and the pounds will take care of themselves! Never have truer words been said. Sometimes we focus on the pennies we save; little realizing, cutting corners now, may cost us a lot more in due course of time. Well, that’s a lesson we all learn somewhere down the road.

Uber learnt this lesson the hard way, when they had to fire their Senior Vice President of Engineering, Amit Singhal. The aforementioned employee did not disclose the reason for him leaving Google in his application – sexual harassment charges were levied against him at Google. Infosys has terminated the employment of hundreds of employees due to discrepancies in their resumes. TCS has fired several employees when their resumes were found to be fudged. I’m already trying to approximately evaluate how much this must have cost these employers per candidate that they released.

Just last month, two startups faced a severe setback here in India. The founder of Viral fever’s sexual harassment charges came to light. The controversial shutdown of Stayzilla was in the news last month following the arrest of the co-founder and CEO. Both these startups were backed up by prestigious investor firms. Now, even investors will work out the due diligence before backing entrepreneurs.

We have to understand that carrying out background checks is not merely a routine HR practice but forms a significant part of pre-employment screening. This cannot be done by just anyone; it has to be entrusted to professionals who specialize in background screening. HR professionals often feel the need to get these checks done only for their permanent employees and probationers. Why leave out the trainees, fixed term contract staff, vendors, job contract workers, labor contract workers and others whom we work with.

I feel we don’t take these checks very seriously, as there is no statutory requirement of background screening in our Indian laws. However, the Indian association of professional background screeners lists the below mentioned checks to be carried out to authenticate the antecedents of a candidate:-

1. Address verification
2. Employment verification
3. Education verification
4. Reference checks
5. Global data base check
6. Criminal background check
7. Drug testing and
8. Credit checks

Did you know – the RBI issued notices to banks requiring them to conduct background checks of all the personnel recruited as dealers? The legal profession has also clearly stated in Section 24A of the Advocates Act, 1961 that no person shall be admitted as an advocate on a state roll if he is convicted of an offence involving moral turpitude.

Furthermore, background screening is mandatory for Indian companies to get an ISO 27001 certification. According to a study done by the US Small Business Administration, for every dollar an employer invests in employment screening, the return on investment ranges from $5-16, resulting from improved productivity, reduced absenteeism, lower turnover and decreased employer liability.

Generally, the most common reason among organizations for not conducting background checks is cost. However, the cost of background checks represents a fraction of the cost of – terminating an employee’s service, re-recruiting, re-hiring and re-training.

So let’s be penny wise and save our pounds! After all, a stitch in time saves nine

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