Tech supervision: Firms embrace digital screening to check new hires

Topics KPMG report | delloite | PwC

Much of the background-checking business has moved to big firms, pushing smaller players out of the space
The 2016 Global Profiles of Fraudsters report by KPMG states that some 65 per cent of fraudsters are employed by the victim organisation while a further 21 per cent are former employees. This number is expected to go up, as virtual onboarding of recruits and remote working become the new normal in the ongoing Covid-19 pandemic.

The need to mitigate the risks associated with today’s work environment models has given rise to the demand for a new service — “digital background screening”. This has also come as a huge opportunity for the Big Four consulting firms — KPMG, Deloitte, PwC and EY — owing to their expertise in forensic audit.

Most of these firms say that a number of companies, especially those working in sensitive domains like financial services, are now reaching out to them to provide digital alternatives to employee background verification.

“While we have been in the business for over a decade and have constantly contributed to making background screening a more process- and compliance-driven service, we have seen some remarkable developments and outcomes in the past six months,” says Maneesha Garg, partner and co-head (forensic services) at KPMG. “Our digital initiatives that would have taken at least nine months to a year for a market launch (in normal times) were pushed out in a matter of weeks.”

KPMG offers employee background screening as part of its forensic services solutions using a new-age technology platform.

Take, for example, the address verification of a candidate, which was traditionally done through a physical site visit. During the lockdown, KPMG verified candidates’ addresses by sending them a secure link and asking them to capture their global positioning system (GPS) coordinates. These were then tallied with the address stated in human resource (HR) records. This has not only yielded cost and efficiency benefits, but has also ensured that the verification is accurate and contact-less.

Garg says there has been a paradigm shift in the willingness of organisations to adopt digital alternatives. “[This is] something that was unheard of a few months ago and usually, it took a market plan to coax organisations to change from traditional methods to digital alternatives of employee background screening,” she says. “Clearly, since the traditional form of verification with physical checks became more or less impossible during the first stage of the pandemic, the digital option became a necessity.”

Employee background screening services were traditionally provided by smaller, local players. But now, while the volume of new hires has declined during the pandemic, organisations want to be doubly sure that candidates’ stated credentials are genuine, since they will have to work remotely, and away from the physical supervision of managers. As a result, much of the background-checking business has moved to big firms, pushing smaller players out of the space.

“Through our proprietary tools, we were able to help companies transition into the new normal, while maintaining the sanctity of bringing the right candidates onboard, without compromising on quality or integrity,” says Arpinder Singh, partner and head (India and emerging markets-forensic and integrity services), EY. “The tool enables address verification through our proprietary app, uses face-match algorithms, sifts through pan-India and global searches and verifies the candidate’s identity and employment documents.”

According to EY, its forensic process scrutinises the accuracy of an individual’s credentials such as past employment experience, academic and professional qualifications, involvement in civil or criminal litigation, current or permanent address and identity proof. The process may involve online verification, using proprietary databases to source information as well as discussions with custodians possessing the details of an individual, such as HR teams, universities, institutions and even court records.

KPMG’s Garg reveals that during cross-forensic audits, the firm has come across cases where a recruit’s previous employer has questionable credentials or has been running a centre for training gullible young people and handing out fake experience certificates for a fee.

Audit firms are also deploying technology tools and applications that use artificial intelligence (AI) and machine learning algorithms to build candidates’ profiles based on their social media footprint. This is to get data on their likes and dislikes, interests, political inclinations or ideologies, and so on. All these provide a wealth of information that can be used as a predictive behavioural indicator of senior or mid-management persons or those employed in sensitive departments such as research, manpower security and treasury.

According to KPMG, through the powered digital application programming interface, and with the consent of the target, one can swiftly gain access to information on gross salary credits, address, and confirmation of the identity of previous employers through government sites, and so on. The digitisation of court cases has also helped background screeners to deploy AI-based tools to extract triangulated information and rule out false positives.

HR experts say some companies are also opting for a periodic verification of existing employees. “With people working from home and not being under the direct purview of managers or supervisors, the earlier concerns have only got accentuated. This is driving the demand for specialised background checks,” says Aditya Narayan Mishra, chief executive officer, CIEL HR Services.

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