The need for Employee Background Verification in the Indian Workspace. A revealing  talk with  Col. Vijay Reddy, Director of Footprints Collateral Services

Employee fraud, especially fraud committed in the services space by Indians gets a lot of media attention globally, and more so in the west, where there is latent anger of having lost their jobs to Indians. India is a major service provider to the globe, and despite the various recent studies by pundits that a number of companies are closing down their captive offshore branches in India, one reads of many more coming in.

Any fraud that occurs here in India is blown out of proportion in the other countries. Indian employers cannot afford to be lax if India is to continue to be a service provider to the west and the current economic growth is to be sustained.

So what really is the scene in India as far an employee's integrity and honesty is concerned? Here are some startling figures : 15 to 24% of the CV's submitted with job  applications are fake, and one in three CV's misrepresent facts,  so about 1 in four of the people working today have either lied or fudged with the information that they have submitted to their employers.

Some more facts..........23% of potential applicants are found quoting inflated salaries, 20% are found lying about their accomplishments. And in 13% of fraudulent cases, prospective employers carried out no background checks. Now to the institutions - According to UGC India, there are at present 26 fake colleges and universities that have been identified. The Consumer Online Foundation has identified 226 fake companies.  According to Vishal Dhupar, Managing Director of Symantec India (Norton), today  54% of data loss is  happening  from inside the companies.

Col. Vijay Reddy, says "Verification is the act or process of ascertaining the correctness or otherwise of a presented set of credentials, data, information."

He says that the objective of verification is to provide intelligence to the users so that the users can make knowledgeable decisions based on the facts found.

One of the dictionary meanings of verification is "Proof that something is correct". Legally it could mean "An affidavit attached to a statement confirming the correctness of that statement".

What makes the employee to lie about himself? What are the causes and effects?  700 plus years of oppression, monarchy, divide and rule policy of the rulers of the past have created chasms, divides that result in existential insecurity, low self esteem, and misplaced loyalty in the psyche of different sections of the country. Inequality and stratification, an extremely populous, clustered and fragmented society in India has resulted in the need to surge ahead by hook or crook, to be defiant towards rules, being self centered and self seeking. The economic surge and the parallel economy has lead to an authority based ego and institutional inadequacies, lack of trust, inadequate bonding among Indians are some of the other effects. And of course, not the least is the greed for money or materials benefits.

The consequences of improper or no background checks are indeed harmful to the companies involved and the nation as a whole. Reddy sited two recent examples of cases of frauds by employees that shook the Indian services sector and threatened to snowball into issues that could effect India's role as a service provider to the world, viz: The case of an employee who misappropriated about US$425,000/- from 20 clients in London, and the case of US$200,000 defrauded by a Kolkata based BPO employee. In the first instance, the employee credentials were not properly verified, he had misstated his tenure with previous employers , had submitted fake records and fake address and has misrepresented facts. In the Kolkata incident, the girl's father was heavily in debt, improper police verification and inadequate background checks were the reasons for the girl being employed.

The challenges in conducting employee background verification are many. Central repository databases are practically non-existent, there is no population control, the police and the law enforcing authorities are susceptible and often uncooperative, and to top it all, the very poor infrastructure in India makes validation of data a long haul.

Best practices for employee verification:

1.  Obtain as many details as possible without impinging on their privacy. Details of family members & their occupation, martial status & children, permanent address, are the most basic of aspects that must be verified of a potential employee. The accuracy in filling application form, of details such as educational claims with regards to the subjects the job applicant have majored in, thesis topics or projects that the candidate claims to have done.

2. The murder of a female BPO employee in Bangalore sometime ago created a huge furor all over the country and abroad as well. Hence a thorough checkout of cab drivers, security & housekeeping s staff is a must for the safety and reassurance of the employees and their families.

3. Employers and verification companies must develop an automated system for exchanging Information in real time. This exchange of information is a must even within the same organization. The right verification vendor should be selected and a continuous interaction with the vendor is a must, the interaction should not be limited to a case to case basis.

4. The company should adopt practices that suit the Indian environment and not just the procedures followed by their counterparts or offices based in other countries, and this is more so in the case of employee privacy norms. For example in the US, there are restrictions on obtaining certain personal information of an employee or a candidate because such basic information has already been verified and is available with the state social security and hence the validation for certain aspects could be limited to obtaining the social security number or the IRS number there This is not the case with India because there are no such central repositories of citizens' data available.

5. A person from the HR department should be deputed to interact with the verification vendor. His or her job function should be only to interact with the validation vendor. A number of companies hesitate to give letters authorizing the verification vendor to conduct verification on behalf of the companies, hence weakening the vendor's hands and making it more difficult for the vendor to complete the verification checks. This attitude requires to be changed.

6.  Bodies like NASSCOM have taken the initiative to compile employee data bases and the industry should lend support and encourage such initiatives.

7. Companies must listen to their vendor, not just hear him or her. Periodic internal audits and cross verification by other independent verification entities to check the veracity of the work done by the vendor must be done. For the central or the state governments, Laws on the lines of Sarbanes-Oxley Act & Clause 49 specific to work place, labor and personnel issues be out in place, and the government itself should take the initiatives of making their data bases available to the public.  

Tarachand Wanvari is a consulting correspondent for Business Gyan & www.businessgyan.com. Feedback at tarachand@ businessgyan.com

Issue BG75 June07

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