background screening trends- recession time study report

Securing your Business Environment

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Background Screening Trends: October ’08 - July ’09

Recession Time Study

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As economic conditions got from bad to worse in the past year, things haven’t been quite favorable for most businesses

across the globe. Though the global economic downturn did not see many businesses flourishing, it did witness an escala-

tion in the number of frauds. Many experts across the globe predicted this trend as an aftermath of recession.

Recession saw an increase in resume frauds due to layoffs and lesser number of jobs in the market. Organizations observed

people lying about their previous employment and educational qualifications so as to bag the available job. Realizing this

trend more and more organizations resorted to screen the candidates.

AuthBridge conducted an extensive research internally based on employment verification data extracted from clients

across various sectors like IT, ITeS, BPO, telecom, finance, retail, hospitality, manufacturing, BFSI etc. This report clearly

indicates a new trend that emerged as a result of the global economic downturn. The recession came with an increase in the

number of frauds. As the recession peaked, so did the number of frauds committed by employees. The gloomy economic

weather underscores the need for professionals and managers to safeguard their company against frauds. Due to fewer jobs

in the market prospective employees become more desperate to get a job; therefore chances of resume embellishments,

identity thefts, forged document, fake degrees and many such frauds hence increase.

Companies across the world lose millions of dollars due to diverse employee related frauds. The good news is that many of

these frauds can be avoided by following a simple process – Background Screening. Verifying the credentials of your em-

ployees, prospective employees, business partners, vendors and any other business acquaintance not only ensures a safer

work place but also saves the huge sums companies lose due to corporate frauds.

At AuthBridge, we help our clients with Employee Screening, Vendor and Business Partner Screening, Corporate Fraud

Investigation and Prevention and various other Business enablement services. For years, AuthBridge has been a partner to

many Indian, global, public and private sector organizations, helping them continually improve their operational perform-

ance by reducing the human capital risk and hence securing the business environment.

This report aims to give an insight to the readers giving a better perspective of the increase in resume frauds during the

global economy meltdown.

Ajay Trehan

Chief Executive Officer– AuthBridge


Foreword





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⇒ The aim of this report is to instill awareness in organizations about increasing human capital risk during recession

time

⇒ To categorize and quantify the discrepancy trends during the recession period found while conducting

background checks for our clients

⇒ Through this report we also aim to help organizations in safe hiring process so as to mitigate any kind of risk

related to unsafe hiring

Objective





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⇒ Maximum number of discrepancies were reported in the month of March. From 9% in February, discrepancies

leaped to 16% in March ‘09. Interestingly, during this time recession was witnessing its peak period

⇒ Discrepancies related to employment were the most common. 74% of the discrepant cases lied about their

previous employment

⇒ North India accounted for 47% of the total discrepancies reported

⇒ 59% of employment discrepant cases lied about their tenure, designation, CTC or reporting manager

⇒ 69% of education discrepant cases provided fake/ forged documents

⇒ 69% of address related discrepancies gave incorrect address

⇒ Address related discrepancies were maximum in West as well as North India (41% each)

⇒ Maximum discrepancies were reported from ITeS , IT and BFSI

So why does a downward spiral in the economy result in an upheaval in frauds?

As a result of recession and higher unemployment, it is likely that employers will need to scrutinize applications even

more carefully, to be on the watch for fraudulent credentials, such as inflated or fictional employment history or edu-

cational degrees.

The report states that frauds like resume embellishments, identity thefts and fake mark sheets increase as the economy

faces recession. Background Screening of employees as well as vendors helps an organization in reducing such risks

threatening their business.

Report Summary





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Discrepant Cases*

7% 7%

11%10%

9%

16%

14% 14%13%

14%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Oct'08 Nov'08 Dec'08 Jan'09 Feb'09 Mar'09 Apr'09 May'09 Jun'09 Jul'09

* Monthly sample of 10,000 cases

The global recession is creating multiple challenges which are new and unfamiliar to most managers and regulators.

Among these is how fraud risks change in a downturn, and how antifraud strategies must adapt. Apart from an in-

crease in Corporate financial frauds, the world has also seen a rise in the number of frauds committed by employees

to get a job. Due to the tight market situation, many people have resorted to resume embellishments, identity thefts,

forged document and fake degrees. This report examines the rapid shifts taking place in such frauds.

Right from the beginning of the global economic meltdown, AuthBridge closely monitored the trend of discrepancies

and frauds. The report data carries the internal research done for the 10 crucial months of recession.

⇒ Overall discrepancy remained 7% in the months of October– November ‘08. Discrepant cases varied from 11% -

9 % from Dec ‘09– February ‘09.

⇒ As the recession grew stronger, so did the discrepancy rate. The month of March saw the biggest jump in discrep-

ancies. From 9% in February, it leaped to 16% in March ‘09.

⇒ In the months of April- July ‘09, discrepancy rate remained almost constant at 14%. (with an exception of 13% in

June’09)

Overall Discrepancy Rate





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After the research it was gauged that Employment related discrepancies alone account for about 3/4th of the total

discrepancies. Other types of discrepancies are Address, Education, Criminal and Drug Abuse. Criminal and Drug

abuse accounted for less than 1% of the total discrepancies during these 10 months and are not covered in this study.

⇒ 74% of the total discrepancies can be attributed to Employment.

⇒ Education related discrepancies accounted for 17% of the total inconsistencies

⇒ Address related discrepancies were the least common out of the three and accounted for 9%


Discrepancy Categories

Address

9%

Education

17%

Employment

74%

Discrepancy Categories





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As seen in the above given chart, as the recession peaked, discrepancies in each categories also touched an all time

high.

⇒ The month of March saw huge jump of discrepancies in Address, Education as well as Employment area.

⇒ In March, Employment discrepancies jumped from 9% in February to 14%.

⇒ Education saw a percentage increase of more than double. It increased from 6% in February to 13% in March.

⇒ Address related discrepancies were the highest in December (17%)

Before recession peaked, address related frauds were committed more. But, as the economic situation turned even

blue, discrepancies related to Employment started rising.

Month Wise Discrepancy Details

7%9% 17%

7%9%

6%10%

6%5%

7%

6%

6%8%

9%9% 14%

12% 13%

12%

11% 12%

10%

14%

12%

16% 11%

13%

12% 11%

6%

0%

20%

40%

60%

80%

100%

Oct'08 Nov'08 Dec'08 Jan'09 Feb'09 Mar'09 Apr'09 May'09 Jun'09 Jul'09

Address Education Employment





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⇒ Almost half the discrepancies were from Northern India

⇒ Next came Western part of the country with 32% of discrepancies being reported here

⇒ South and East India combined accounted for 21% of the inconsistencies

Zone wise discrepencies

North,

47%West,

32%

South,

12%

East,

9%

Zone Wise Discrepancy





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Of all the discrepancies during October ‘08– November ‘09, Employment related discrepancies accounted for 74% of

the total, out of which:

⇒ 59% candidates lied about their tenure, designation, CTC or reporting manager

⇒ 12% candidates had provided fake employment information like incorrect company name, reference etc

⇒ 11% people provided fake documents or certificates

Employment Discrepancies

Employment

59%

12% 11% 9%

4% 3% 1% 1%

0%

10%

20%

30%

40%

50%

60%

70%

Incorrect

Details

Fake

Employment

Forged

documents

Disciplinary

Issues

Perform

ance

Issues /

Incompetency

Exit

Form

alities

Incomplete

Integrity

Issues

Financial

Impropriety





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After Employment, Education related discrepancies topped the chart with 17% discrepancies. Out of these:

⇒ 69% candidates provided fake/ forged documents

⇒ 23% used the name of a fake institution

⇒ 7% of the candidates gave wrong marks or results

Education Discrepancies

Education

69%

23%

7%

0%

20%

40%

60%

80%

Fake/forged documents Fake Institution Wrong Result





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Of all the discrepancies during October ‘08– November ‘09, Address related discrepancies accounted for 9% of the

total, out of which:

⇒ 69% of the candidates gave incorrect address

⇒ 31% of the candidates never had never stayed at the address which they provided

Address Discrepancies

Address

69%

31%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Incorrect Address Never stayed there





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4%11% 9%

41% 24%33%

75%

41%55%

46%

25%

15%10% 12%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Address Education Employment Others

East West North South

⇒ Address related discrepancies were maximum in West as well as North India (41% each)

⇒ Education discrepancies were highest in North India

⇒ Employment discrepancies were 46% in Northern part of the country and 33% in West India

⇒ Other discrepancies like criminal record, etc were the highest in Western India (75%)

Discrepancy Category: Zone wise break up





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Training

Database Services

People Solutions

AuthBridge is one of India's leading Credentials Screening and Risk Management Consulting companies. We help

our clients with Employee Screening, Vendor and Business Partner Screening, Corporate Fraud Investigation and Pre-

vention and various other Business enablement services

AuthBridge has provided solutions to many Fortune 500 companies across the globe. AuthBridge is one of the very

few organizations in the world that has its processes certified to globally accepted standards like ISO 9001:2000 for

Quality Management and ISO/IEC 27001:2005 for Information Security Management. AuthBridge has a strong Ad-

visory Board of ex-bureaucrats and law enforcement officers including top ex-official of the Central Bureau of In-

vestigation, the most authoritative agency on criminal networks and prevention of crime in India

We perform the business critical pre-employment screening processes effectively, letting our clients remain focused

on their core strategy, competition, and market agility. Our services and solutions include, but are not limited to:

About AuthBridge

Risk Advisory

Background Screening





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Background checks and pre-employment background screening solutions from AuthBridge are designed to meet the

requirements of the most demanding HR and Security professionals. Our screening process is based on a unique ap-

proach, offering our clients the highest level of scrutiny and the most concise background investigation in the indus-

try. AuthBridge offers a full range of background checks and other pre-employment background screening services,

excellent service and competitive pricing. AuthBridge provides actionable knowledge that goes beyond profiles and

random results. Our background screening services include:

AuthBridge provides a comprehensive employee screening service that helps organizations reduce risks and make

informed decisions in hiring its workforce. Businesses rely on AuthBridge for exceptional client care and leading ex-

pertise in providing industry-specific employee screening solutions that includes the following checks:

⇒ Education / Degree Verification

⇒ Employment Record Verification

⇒ Professional Reference Checks

⇒ Address Verification

⇒ Verification of Criminal Records

⇒ Drug-Abuse Testing

⇒ Media Searches

⇒ Indian Database Checks

⇒ Global Database Checks

⇒ Identity Check

⇒ Passport Verification

About AuthBridge

Continuous Employee Screening

Substance Abuse Testing

International Background Screening

Senior

Executive Screening

Employee Screening





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Company Highlights:

⇒ ISO 9001 and ISO 27001 certified Employee Screening Business.

⇒ More than 300 customers, including Fortune 500 companies

⇒ Works for multiple industries, across varied scale and locality, including IT, ITeS, Banking, Financial Services,

Insurance, Retail, and Hospitality

⇒ Unrivaled set of solutions developed by industry veterans, combining deep domain knowledge and operational

excellence

⇒ Strong Advisory Board of ex-bureaucrats and law enforcement officers including top ex-official of the Central

Bureau of Investigation, the most authoritative agency on criminal networks and prevention of crime in India

⇒ Nationwide presence , bringing together the right talent, tools and methodologies for seamless delivery of meas-

urable results

⇒ Complies with FCRA guidelines in its efforts to provide authentic pre-employment background screening ser-

vices to companies in India.

Disclaimer:

AuthBridge Research Services Private Ltd. does not provide legal advice or services and its research findings should

not be reconstructed or used as such. AuthBridge does not assume any legal liability or responsibility for the accu-

racy, completeness, or usefulness of any information present in this report. The opinions expressed herein are subject

to change without notice.

About AuthBridge

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