Digitalisation of employee background check processes can transform HR functions: EY

The pandemic’s striking effect on organisations continue to challenge human resource (HR) functions and has made the use of technology assets and tools for employee background checks a priority, according to EY Forensic & Integrity Services’ report, ‘Digital Transformation Drives Employee Background Checks in the New Normal’. According to the report, 72% respondents said technology can be leveraged to digitise records, 66% highlighted its use for preliminary assessment of employee credentials and 56% pointed to automating processes. A rising trend of negative background verification is concerning, with 96% stating that they experienced failures in up to 10% of the background checks conducted on existing or new employees.

Disruption during Covid-19 lockdown proved onerous as traditional practices were inadequate when onboarding new hires; 68% respondents faced challenges in completing background verifications during the lockdown, while only 32% leveraged technology tools as an alternate mode of verification.

Arpinder Singh, global markets and India leader, Forensic & Integrity Services, EY, said that the lessons learnt from the current crisis outline a dire need for a dynamic and automated work model for talent teams. “While business continuity and employee safety has been the core focus, leaders need to pivot and re-craft HR strategies, right from the fundamentals of hiring to virtual onboarding, training, and skilling their employees. The adoption of next-generation technologies for employee background checks will be invaluable, can enable to hire deserving and ethically sound individuals quickly and, at the same time, protect organisational culture and reputation,” Singh said.

Vivek Aggarwal, partner, Forensic & Integrity Services, EY, added that employees are the keystone of organisations and recruiting the right candidate for the right role is vital. “Implementing a holistic employee background check process is not just good practice but a smart, prudent and safe way to chart out an ethical future for organisations,” Aggarwal said. “New-age and innovative technological tools can help strengthen this process and enhance efficiency of HR functions.”

These findings are a result of EY Forensic & Integrity Services’ survey of over 115 senior HR executives from Indian and multinational corporations. Other findings include:

—Negative verification due to discrepancies in employee records: 96% respondents experienced failures in up to 10% of the background checks that were conducted on existing or new employees. Some of the most common reasons were incorrect employment records (87%), false education history (45%) and undisclosed termination by previous employers (44%). Pre-employment checks are still not an industry-wide practice, and only 45% considered it mandatory before a new employee is given active business responsibilities. The margin of error during the initial hiring should be as low as possible, if not eliminated. The risk may not be immediate but can snowball over with time.

—Leveraging technology tools and solutions as an alternate: The report highlights that only 32% of the respondents said that their organisations could leverage technology tools as an alternate mode of verification during the lockdown. But employee background verification in the new normal will have to be supplemented by technology solutions to enhance its integrity and overcome risks. 72% respondents said technology can be leveraged to digitise records with educational institutions, 66% said it can aid in the preliminary assessment of employee credentials and 56% pointed to automating processes. Blockchain and robotics can enhance security, automation and machine learning can enable faster processing, while artificial intelligence and software algorithms can decrease risks during the recruitment process.

—Role and responsibility-based screening: Over 50% respondents said they had the same scope for background checks across levels, function and roles. This one-size-fits-all approach can have several gaps. Organisations need to adopt a tailored model based on the criticality of the level, role, department and responsibility. Verification should also be extended to contract staff as the risk implications remain the same. As per the report, only 38% of respondents conduct background check for permanent as well as contractual employees.