How to weed out fraudulent candidates with rise of remote work

'If there's reluctance or resistance to update their LinkedIn, it may be because they are moonlighting'

How to weed out fraudulent candidates with rise of remote work

One of the biggest nightmares for HR and recruiters is verifying that a shiny new hire is actually who they say they are.

If HR gets it wrong and a misrepresented individual ends up joining the organization, the risks to the business can be substantial.

“If you bring someone who is simply not qualified, who does not have the skills, was misrepresenting themselves as having the skills, then that also becomes quickly apparent to the rest of the team,” says Alan Mak, partner and national practice leader, forensic disputes and investigations, financial advisory services at BDO Canada in Toronto.

Once that happens, it’s the existing employees who often are affected the most.

“The damage it has on your culture because you brought someone onto your team who doesn’t know what they’re doing, it’s going to frustrate your existing employees. If you don’t get rid of them or don’t act quickly enough, that can be very demoralizing so it’s also a significant cultural impact,” says Mak.

Reputational risks

In addition to that, there are reputational risks as well, he says.

“If I bring someone on who is not capable of conducting a forensic investigation, a business evaluation, a loss quantification, then the work product is going to be substandard. At best, that creates additional work for me as a partner; at worst, there is substandard work product out into the market and my reputation and my firm’s reputation is damaged, so there is significant risks from a business perspective.”

There is also a financial penalty to be accounted for if the wrong candidate is hired, says Chris Harper, CEO of ZippedScript, an education verifying software service in Toronto.

“The time that goes along with the training, the commitment, only to have you find out later that you’ve got somebody who’s not trustworthy — that can bleed into losing a client, losing business. If you’re a publicly traded company and somebody in the C-suite, when people find out they’re lying, that’s going to affect stock price [and] you lose tons of money.”

Due diligence

Background checks are a valuable way to address the issue, but with the rise in remote working, more organizations are looking to save on labour costs by looking globally — and that brings new risks.

“Hiring people cross-border now is becoming really popular, especially in tech, because the same employee that costs $150,000 in the United States or Canada, if you go to Malaysia or go overseas, you can get that same employee, same quality of work… but what happens with that, when you go overseas, is it’s complicated to do background checks. The problem is getting bigger,” says Harper.

Read more: Navigating the complexity of background checks

As more workers commit to a full-time remote experience, other risks become apparent that must also be addressed and managed, says Mak.

“We’ve had employees who have come and gone and [we’ve] barely met face-to-face: that creates risks in terms of loyalty, in terms of simple things like corporate intelligence, maintaining confidential information,” he says.

“There’s always a risk to a company where employees have access to proprietary information and without personal relationships that are formed through direct interactions, then there’s a higher risk we’ve seen of misappropriating corporate assets, corporate intelligence.”

Generally, when someone lies about their education, it should disqualify a candidate, says Harper.

“Typically, we find if you’re lying about education, you’re lying about other things,” he says. “They’re going to lie in your business, they’re going to lie to customers so spend the money. Do the background check, it’s well worth it.”

Best practices

So what can be done to prevent fraud from happening? Besides using software to verify candidates, there are other techniques that can identify fraudulent persons before they are brought onboard, says Mak.

“If they went to Harvard, it might be a chatbot or an email exchange, that asks for more details: ‘Which college did you go to? Which program was yours? Which professors might provide a recommendation?’ And they can cross-reference if those answers actually makes sense.”

LinkedIn can also be mined carefully when considering a candidate.

“For example, if they have a 15-year work experience [and they] have 10 previous employers but they have 15 connections. Does that make sense? Is that genuine, or did they just make that up?” says Mak.

Read more: How to prevent ghosting by job candidates

Because of the new risk of employees moonlighting — in which they are working remotely at two or three jobs at the same time — it’s a good idea to ask new hires to update their LinkedIn profile when they join your organization, he says.

“If there’s reluctance or resistance to update their LinkedIn, it may well be because they don’t know that they join a new firm or because they are moonlighting. We ask them to update the profile and if they don’t, we take a closer look.”

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