It only takes 10,000 to cheat employer

Real or fake?
This is a question that is relevant in all walks of life. It is now being asked with increasing urgency in professional life. About 8% of employees pose fraud risk, states a recent report on background verification insights from IDfy, an integrated identity platform. The report analysed 2.5 million background verifications across industries in the past year. Background checks include verification of address, qualification, experience and criminal records. IDfy performs these checks and flags discrepancies at three levels — red, amber and green.

Companies have a reason to be concerned. “We are witnessing a spurt in employee frauds as a result of remote working, as well as increasing personal financial pressures and pressures to perform at work,” says Jayant Saran, PartnerForensic, Financial Advisory, Deloitte India. “These can manifest in frauds for personal gain or furtherance of business or career,” he adds.

Sector-specific details
The IDfy report finds that industries seeing the highest percentage of highrisk cases include BFSI (banking, financial services and insurance), e-commerce and staffing, at an average of 7.8%. In BFSI, address verifications and experience checks led to a large number of such red cases: 10.7% and 9.5%, respectively. Employee fraud comprises about 75% of all frauds experienced by lenders. So it is crucial to give trusted employees the responsibilities of handling large sums of cash, interacting with customers, and roles that can influence the outcomes of loans and other assets, according to IDfy.

The report highlights the importance of reputation being built on the calibre of people hired and, hence, the criticality of ensuring dependable talent solutions. For ecommerce, the report says 70% of checks are done on off-roll people during hiring of seasonal gig workers, specially before festivals. Address checks are an issue at 15.25% fraud detection, given that many people come to cities from far off places and some might find it difficult to provide verification or have an address before moving to the next gig.

The underlying issue
Highlighting the seriousness of the issue, the company says that for just ₹10,000-12,000, you can get a set of fake experience letters, payslips and even a ‘pay hike’ letter. It is very hard to detect these kinds of frauds unless you are working with an experienced background verification provider. Ashok Hariharan, CEO and Co-founder of IDfy, says, “Integrity and diligence in recruiting methods are critical aspects that firms must consider as we negotiate the complexity of today’s recruitment landscape.”

Actions leaders can take
The company points out that leaders need to be cognisant that risk is never static, but keeps evolving. This means senior leaders need to stay abreast of fraud trends and evolving techniques to catch them, while also ensuring existing BGV processes are not becoming stale and ineffective. This also means that they need to ensure periodic reevaluations of employee risk, and perform background checks periodically on senior hires and those in sensitive roles.

The level of risk profiling needs to be pertinent for the role the person is being hired— deeper checks for senior/sensitive role hires and lighter checks for others. Since a majority of the candidates is going to be marked as green, there is a need to ensure that background check process provides a great user experience and doesn’t leave them dissatisfied. Senior leaders must also be alert to employment frauds in the industry.