How data repositories can facilitate employment verification market


Job creation is one of the most critical priorities for India with over 10 million young people entering the job market every year. According to a UN report, India will witness over a billion people entering the job market by 2050. Contrast this with the fact that a total of 460 million people were employed in non-farm activities in India in 2015.

However, jobs are not easy to come by; a recent newspaper report said mid-sized companies are hiring a total of 3.5 million people on a yearly basis, out of which 2.5 million is replacement hiring. Further, recruitment for freshers is often a winding process for employers; as the traditional scrutiny processes for hiring can be quite cumbersome and costly.

Most HR departments are overburdened and in several cases understaffed, and they also often lack technology-based infrastructure. Apart from conducting background checks of new and incoming employees, they also end up spending a lot of productive time in fulfilling incoming verification requests from other employers; about former employees.

An authentic verification of a new hire not only plays an instrumental role in establishing trust but also reduces the potential risk to the reputation and safety of a company. In order to avoid any breach in the work culture or overall organizational productivity, it is imperative to conduct thorough background checks on job-seekers via documents issued by the government or private organizations, identity proofs, education credentials, checking with personal and professional references and so on.

It has been found that 90% of employers in the organized sector, with the exception of IT, banking and financial services, conduct background checks of minimal order. In addition, the ease of availability of fake documents and certificates pose a huge threat to the authenticity of the entire process. In India alone, there are close to 7,500 companies, which provide fake documents and employment certificates. Cases of the rape of a young woman by a taxi driver in Delhi in 2014 only draw attention towards the loopholes in the process.

The recent incidents of unsubstantiated allegations raised against the CEOs of some well-known firms also draw our attention towards the urgency of comprehensive background verification of CXO level employees, who are required to be screened with greater scrutiny. As per Trends Insights 2016, the third edition of AuthBridge’s Annual Trends Report, employment records witnessed the most manipulated information with the discrepancy of 10.06% in FY 2016.

 Background verification is a very crucial stage of the recruitment process. In a growing economy like India where the number of people joining the workforce is continually rising, the conventional practice of manual verification by human resources (HR) is well past its optimal efficiency. Further, cost-consciousness and strict timelines for hiring lead to loose checks by recruiters. Moreover, the cost of a bad hiring could be up to five times the annual salary of a bad hire.

In the year 2015-16, gaps were detected in personal information, criminal component and past employment of nearly 4% of cabbies, which were to be employed by leading aggregators. For a candidate with several years of experience, it is quite tedious to reach out to different former employers and seek out information in standard practice. The process is also prone to errors.

In an effort to bridge these gaps in the recruitment process, many companies have sought to create centralized repositories of information. Many of these employers are driven by technology and have started to maintain a centralized database of employees that include all the verified information on education, employment background and personal details of these professionals.

Several industries that hire in big volumes are moving towards using these repositories for the recruitment of quality candidates. These repositories derive information through employment histories. Companies around the world are relying on them for job creation, short-listing quality candidates, and protection against unexpected forgery and crime.

Like all community-driven databases, a collaborative platform like a repository will only grow larger and more exhaustive as more employers join and start uploading their ex-employee data. As technology progresses and the ecosystem moves towards a shared database, for contributing employers, the benefits would not stop at quicker recruitment – over time they will also be able to run sophisticated attrition analytics to check and plug any gaps in their talent retention strategy. The end goal for a repository is to create what economists call a common good; everyone benefits when they are part of it. For companies in India, it is a win-win proposition.

Source:People Matters

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