Employee Background Verification – Why is it Important?
In any recruitment process, verifying the authenticity of details furnished by the candidate is the first step in establishing trust between the employer and the employee. For the same reason, it is very crucial to perform a complete background check for every candidate hired, without an exemption.
A research report reveals that employers around the globe face losses of $600 billion annually due to misrepresentation of personal details by the candidates they hire. Specifically in India, it is observed that one in six candidates misrepresent themselves in their resumes. Such alarming facts have increased the need and visibility for background screening, in recent years. About 72% of the global companies, including those in Fortune 500, perform background verification for every person they hire.
Traditional Background Verification Process
Traditionally, Background Verification(BGV) has always been an offline process. The employer would reach out to a third party background verification company with details of a potential candidate. The third party BGV agency in turn, would approach the employers and institutions that the candidate was previously associated with and send queries regarding the details furnished by the candidate. Once the BGV agency receives responses from the previous employers and institutions, the information would be forwarded to the employer who initiated the request.
Flow of Information in traditional BGV
Evidently, the traditional approach has multiple dependencies and the lead time for BGV process to complete would range from two to three weeks per candidate on average. This significantly and unpredictably increases the turnaround time and the closure time for recruiting a candidate. Also, through the traditional method, the cost of performing background verification for one candidate ranges from INR 2500 to 3000 on an average.
Digitally Transforming the Background Verification Process
One way to resolve the shortcomings of the traditional background screening process is by using a digital platform that connects all the stakeholders, enabling quick access to documents. Digital transformation of the background verification process would essentially reduce the number of bottlenecks involved and make the process instantaneous. Effectively reducing the lead time, performing BGV on a digital platform considerably reduces the average cost involved in performing background verification per candidate. Also, leveraging the latest technical advancements for the process would fool proof it against any practical limitations in the times to come.
When the BGV process is performed digitally, the employers, candidates and certifying institutions are present in a single digital platform. Each of the stakeholders have individual privileges in accessing the documents securely stored in Blockchain. This reduces the time it takes to conduct BGV as the documents can be shared by the candidates at the click of a button.
The background screening process involves storage, exchange and validation of sensitive information like education documents, experience certificates, payslip and other personal details of candidates. Hence, it is really important to have a secure repository for storage of such information. With the attributes of immutability and impenetrability, a Blockchain digital repository is a perfect fit for the requirement.
Flow of Information in BGV through Blockchain
The Digital and Blockchain Advantage
Performing the Background Verification on a digital platform integrated with blockchain has a unique set of perks.
- Transaction time is as quick as few minutes and the entire verification process, which traditionally takes 2-3 weeks, is completed within hours
- By eliminating the cost of transaction on the network is limited, essentially saving cost
- The documents are secured through blockchain technology, that uses cryptography for encryption. It stores data in a form that cannot be altered and is impossible to hack
- Usage of a distributed ledger allows access to information on demand, while simultaneously securing it through an encryption key
- With both the candidates and past/potential employers being present in a unified platform, the network in tightly coupled and faster to operate within
Digital transformation of BGV not just quickens the process, but also makes it more secure, efficient, economical and simple. With the changing dynamics of operations in every industry, it is essential to acquire and retain the right talent within the organization quickly. A speedy and efficient background verification plays the most critical part in achieving that.