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Growing Need for Pre-employment Background Checks in India

July 7, 2020
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pre-employment background check in India

The concept of background checks in India is still at a nascent stage. But the need for the same is steadily growing and several organizations, and almost all of the IT and ITes sectors, including the financial sector, opt for a pre-employment background check in India today.

Need for pre-employment background check in India

The commercial world, both offline and online, has become highly competitive. The integrity of an organization is at stake. The confidentiality of the information it possesses needs to be protected. Any new person joining the organization should thus be checked to ensure the above.

The need for pre-employment background checks developed rather quickly in India. A spike in employment-related reported frauds became a cause of grave concern for businesses based in India. For example, a Hyderabad based company was found to be supplying candidates with false employment certificates. What was even more surprising was that it was a legitimate company with other business interests. Senior executives of well-known organizations have also been found to have submitted forged documents for educational qualifications. These are just some instances. There have been several others wherein organizations had to face the brunt of employing people who later turned out to be a fake.

Previously the HR department had a checklist for the same. The points mentioned there were ticked off based on the educational qualification and other documents submitted by the candidate. But the recent spike in falsified information being fed to organizations to get a job has prompted Indian companies to make pre-employment background check in India an integral part of their employee screening procedures.

Unemployment is on the rise and there is a desperate need to get a job. Thus people are resorting to unfair means. Thus for the company, employing a person who:

  • Is ill-fitted for the role for which he is being appointed and
  • Lacks the integrity to keep company data confidential is an exercise in futility.

It is a sheer waste of time, money, company resources, company goodwill and branding. It is a fact that brand building takes years but a few nasty seconds destroy it. Rebuilding is an even more difficult process. Hence companies today have no option but to adopt stringent measures to ensure that they are employing the correct person for the job role at hand and also to prevent a data breach. This is an important contributor to the growth of pre employment background checks in India.

Different sectors have different practices for the same. The pre-employment background checks are not validated by a legal requirement. However, organizations dealing with money or highly sensitive information have adopted a comprehensive system to ensure data confidentiality.

RBI mandates that background check should be conducted on all personnel who shift from other banks. IT companies have a strict two-tier system that they follow. There is an in-house pre employment background check in India conducted and a third party is also tasked with the same. Some companies also make candidates go through an intense and gruelling interview session so that discrepancies, if any especially in areas related to educational qualifications and workplace experience, can be identified and cross-checked. Recruitment of senior-level executives by organizations is done only after the candidates are checked for criminal records, unethical practices and security law violations also.

What does a background check entail?

A comprehensive background check would include everything starting from checks for educational qualifications, past employment records, criminal records, identity etc. Thus employers look for:

  • Public records including criminal history: All law enforcement agencies have details of the same. These can be availed by the company to see if the candidate has any previous record of:
  1. Sexual harassment against co-workers,
  2. Sexual assault on customers within the company premises,
  3. Negligent driving,
  4. Causing financial or reputational loss to past employers or other companies,
  5. Legal claim defences etc.

A multi-level jurisdictional search for criminal records of potential candidates, if any, enables an organization to exercise due care in the employee selection process. For employing people through third-party vendors, conducting a criminal check becomes an essentiality. 

  • Work history and compensation: Things such as the extent of job role, compensation package last drawn, personal conduct within the company, medical history, if any, that might have a bearing on the candidate’s productivity, performance vis-à-vis the targets given etc. all form an important part of the pre-employment checking process.

Drug test results are also included within the purview of a pre employment background check in India as working under the influence of drugs can be extremely harmful. It can result in personal injury or co-worker harm thereby giving rise to expensive compensation claims, which in these post-COVID-19 times, an organization cannot afford.

  • Education records: This is a matter of great concern since maximum pre-employment frauds are conducted here. Forged documents citing University degrees, specialization certificates, false grades etc. are very common forms of corporate employment frauds. No employer can afford to be lax in this area and hence all educational and professional credentials need to be cross-checked with the University or the institute that has awarded the same. This is time-consuming but pays off in the long run.
  • Address and Identity verification: Any person with something to hide about their past feels a need to fake address and identity information. Checking to see if the details provided are correct has become relatively easy with the advancement of technology. Some government portals now provide validated information regarding the same as:
  1. Aadhar card or UIDAI website,
  2. NAD or the National Academics Depository which is a digital storehouse of educational information and records,
  3. NSR or National Skills Registry which stores working professional data and is the largest database available to fact-check information, including biometrics, about potential employees.

Social media platforms have become major means of cross-checking personal candidate information in a pre employment background check in India. Social feeds available on these platforms enable company professionals to understand the interests, tastes, affiliations and activities that a candidate likes to indulge in. This makes them construct the personality of a candidate to some extent. Companies and organizations also check to see if the candidate holds any radical political views that might harm its reputation in the future.

An employee is the face of a company. Hence, organizations need to be doubly sure about candidates before hiring them.

Legality of pre-employment check in India

As mentioned earlier, there are no legal mandates specifically pertaining to the same. The related legal system and statutory regulations are currently pretty vague. But people conducting a pre employment background check in India need to know that:

  • Only Indian companies with an ISO 27001 certification can conduct pre-employment checks here,
  • All information about a candidate’s medical history, biometric data, and financial information are considered private. Hence no organization can look into the same without the candidate’s permission,
  • Social media snooping by companies is not considered illegal and
  • Some information cannot be ever disclosed, no matter what the circumstances are like:
  1. Bankruptcies that had taken place 10 years ago,
  2. Civil suits, judgements and criminal records, including arrests, after 7 years of their occurrence,
  3. Accounts that have been placed for collection after 7 years and
  4. Paid tax lien information after a lapse of 7 years.

However, these restrictions do not hold if the salary of the job position is 75000 INR  or more.

The fact remains that when organizations interview people or want to finalize candidates for very senior levels, they will make it a point to conduct a highly systematic and detailed background check. The job position entails it since the role in the company is too important to risk.

Seriousness of the need for pre employment background check in India 

Today mostly all employee background checking processes lack an organized and streamlined approach. Companies do it as per their requirements. The newness of the concept and the growing need of the same along with the absence of legal clarity continue to pose some serious challenges. According to the economic survey for the year 2018-19, an estimated 7.5 crore employees of the formal sector did not undergo any screening procedure. It is also a startling fact for both the informal as well as the agricultural sector combined. Almost 81% employees in the combined sector were employed without any screening or background verification. 

Yet with India witnessing a spurt of commercial growth post-globalization, employee verification has attained popularity and importance. It is flourishing in an unorganized way because it is considered to be a very effective tool for building a good company infrastructure.  The health of a company depends on the reliability of its employees. Thus pre-employment background check in India should not be side-lined even by start-ups or companies having a presence in tier 2 or tier 3 cities. The formal companies are popularly opting for a reliable employee verification process. The rise of the concept of “Gig Economy” has made the informal sector conducive to the concept but they still have some way to go.