IT firms gear up to strong background checks

IT firms gear up to verify their employees’ backgrounds more strictly in order to check fraudulent claims of tenure, designations and degrees.

Verifying backgrounds of employees, which major IT companies like Tata Consultancy Services (TCS), Infosys Technologies, Wipro and Cognizant have been doing for 5-6 years, is becoming more stringent after the terror attacks throughout the country.

It’s being done with good reason. Pre-screening players allege that ‘fake degrees’ can be obtained and verified in India with ease. Consider this. Of all the discrepancies recorded in the first quarter (Q1) of January 2009, about 71 per cent are related to past employment data, according to a pre-screening firm, First Advantage. About 20 per cent are related to past educational data; and 4 out of 5 educational discrepancies relate to cases of fake documentation.

Incorrect tenure (35 per cent), inflated designations (11 per cent), false employment information (39 per cent), inflated compensation (3 per cent), suppression of negative supervisor/HR feedback (11 per cent), and criminal discrepancies (North-25.8 per cent, South-22.6 per cent, West-38.7 pre cent & East-12.9 per cent) comprise the ailments that plague companies, according to Ashish Dehade, managing director (West Asia), First Advantage.

IT firms agree with these statistics. Wipro, for instance, hires close to 10,000 employees every year. “We have been using multiple methods over the past few years to verify the claims of employees. Fraudulent certificates abound. We work with both an in-house team and have an assessment by the external HR agencies. Final interviews are always conducted in person (earlier telephonic and video conferencing was permitted),” explains Arvind J, head — Talent Acquisition, Wipro Infotech.

Wipro has blacklisted close to 300 companies which issue false experience certificates (employees pay to get such endorsements). Moreover, it has “placed under a scanner around 150 colleges and institutes which are known to be of dubious credentials.” It has to take such stern measures since the company has at least 600,000 active resumes, and validates around 1,000-1,500 resumes every week.

Wipro’s not a lone case. Most of the other IT majors perform a similar exercise. Moreover, while they may compete for IT services deals and poach each other’s employees too, they collaborate (but do not go on record) when it comes to sharing the databases of fraudulent companies and errant colleges and institutes.

TCS, for instance, hires nearly 30,000 employees annually. “Background verification is a very good way of identifying the genuiness of candidates,” avers K Ganeshan, VP (HR), TCS. The IT major also has an accreditation methodology and has “accredited around 1,300 campuses and close to 315 colleges.” The plan appears to be working for the company. Last year, for instance, of the 6,000 lateral (experienced) hires, it detected only around 230 fraudulent cases. “And the number is dwindling with every passing year due to our strong audit process,” says Ganeshan.

Mohandas Pai, director (Human Resources), Infosys Technologies, concurs with this view. The company implemented this “vigorous process nearly six years back, and employees are wary of our strategies. The crafty ones stay away since they know they will be identified and penalised,” cautions Pai.

Nasdaq-listed Cognizant, too, has a stringent due diligence processes and practices in place for whetting prospective candidates at different levels. “We avail of the services of third-party firms to carry out thorough background checks of prospective as well as inducted employees. This involves processes ranging from cross-checking with the HR function at former employers, to digging out pertinent information from respective colleges, and has been quite effective,” says Bhaskar Das, vice- president, Human Resources, Cognizant. The HR personnel initiate a reference check well before an employee joins the organisation. “In most cases, this process is completed prior to the employee joining us,” adds Das.

Incidentally, Cognizant has over 30,000 of its India-based employees registered as part of software body Nasscom’s National Skills Registry (NSR), among the highest in the industry.

Nasscom had set up the NSR in 2005 — a database of details of the IT Professionals (ITPs) — and currently has around 400,000 employees registered with it. However, employers must ensure that checks are done with the employee’s consent. Ensuring that employees are given proper notice is a very important part of positioning your firm to be able to act at a later date should something go awry with employee records, note HR experts.

After registering the details on the NSR site, IT Professionals (ITPs) need to visit Point Of Service (POS) offices appointed by NSDL Database Management Limited (NDML) for submitting their finger-prints (biometric identification), photograph, signature and fee (if not paid through payment gateway).

“How vigorous the background checks should be depends on the sensitivity of the project,” notes Som Mittal, president, Nasscom. He adds that Nasscom is in the process of combining the information contained in the NSR database and the independent databases of IT companies.

But there’s a problem. While the larger companies may have their act in order, smaller IT-BPO companies will have to depend on the NSR database. It’s here where the challenges lie.

Rohit Mahajan, executive director, KPMG Forensic, acknowledges that background verification of employees is just the “first level of assurance to the client.” He adds, though, that there’s a challenge when the verification process is “defined as a commodity. Had it been perceived as a risk management process, it would have been a better value proposition.”

There’s another hurdle to cross. Pre-employment screening players say there is no centralised public access to police records, which makes a comprehensive nationwide search impossible. One has to identify the correct police station of the area of residence to track a person. If a person has resided at different addresses in the same city, one has to request for separate searches. This is a tedious process.

Finally, the IT sector is way ahead when it comes to background verification. If all sectors are taken into consideration, the revelation is scary. Over 98 per cent of all registered Indian firms (across all sectors) do not conduct any background screening. Inquiries related to fraud get restricted to internal audits in most cases. “Even for the 2 per cent that do,” says Kunwar Vikram Singh, chairman, Central Association of Private Security Industry and The Association of Private Detectives and Investigators, “nearly 80 per cent of the information that is verified by third-party investigators is not reliable.”
Source: BusinessStandard.com