Deloitte Business Intelligence Services ("Deloitte BIS")<BIS 2.0 Pointers>

(2) Employee Integrity Due Diligence (EIDD) in the Digital Age

Nowadays, increasingly complex management and business environment have intensified the competition among enterprises.  Talents, an important part of enterprise core competitiveness, are one of the key drivers to create sustainable profits and maintain competitiveness.  Improper talent management will bring about negative impacts on the enterprise, which may sometimes be irreparable.  Employment screening or employee integrity due diligence (EIDD) has been increasingly applied in the employment process to manage such risks.

Employment screening to many of you is a routine business process.  If you are an employer, you probably have been conducting employment screening on candidates for key positions over the years, but probably find that information bland and generally lacking the intuitiveness that helps you compare and assess the key aspects that matter to you.  If you are a potential candidate, you probably have been subject to a background screening unbeknownst to you.  The question is why employment screening is so important to companies trying to maintain their brand and reputation.

Do you really know whom you are hiring?

What if you are hiring a warehouse manager who has a history of petty theft? What if you brought in this new regional sales manager who has a fame for channel stuffing in order to meet his own sales target for a rich bonus?  What if you are hiring a marketing director who also owns various advertising agencies and subcontractors on the side? What if you are involved in a high profile recruit who actually has serious compliance issues but the prior employer stayed silent on them? Do you have comfort that all candidates are entirely honest about their profiles?

Common issues found in a candidate's profile:

  • Education history/ professional qualifications.  Inconsistencies in courses taken or even forged certifications and diplomas
  • Language fluency.  Candidates claimed to have higher fluency in a language than their actual capability
  • Title, experience and responsibilities. Candidates may exaggerate their experience, areas of responsibilities, number of staff managed, and the projects they were involved to ask a higher title and better compensation
  • Gaps in employment history.  Candidates might have changed dates or omit details of certain parts of their employment history that they consider may bring negative impacts on their profile.
  • Previous work relationship.  Candidates may not be open about the real reason on why they departed from prior employment
  • Other interests.  Candidates may not disclose their own business interest that may potentially conflict with the current interviewed position.

The increasingly complex social and economic environment has brought many challenges to the talent management of enterprises, such as the falsification of candidate's resume background, the concealment of integrity stains or the exaggeration of their prestige in the workplace in the recruitment process.  Enterprises also face management and operational risks due to corruption, fraud or conflicts of interest.  Many companies only become aware of integrity issues and pre-existing problems of the employees after the occurrence of fraud and the loss of economic and reputation.  This is where employee integrity due diligence (within the legal realms) can help you address some of the concerns a fact-based employment history verification cannot cover.

"Somebody once said that in looking for people to hire, you look for three qualities: integrity, intelligence, and energy.  And if you don’t have the first, the other two will kill you."  Warren Buffet

What to cover in pre-employment screening/employee integrity due diligence (EIDD)?

An integrity due diligence typically helps employers determine if the candidates are whom they say they are and whether there are any red flags in their personal or professional history.  In many countries, access to candidate's criminal, financial and medical records can only be obtained with consent, or simply prohibited by solely for the purpose of employment considerations (some specific professions may be exempted from such requirements).

Typical pre-employment screening/employee integrity due diligence will cover the following aspects:

  • Identity checks.  This could be as simple as checking physical copies of identification documents for apparent inconsistencies, or identity verification using available software, tools and public record checking services.
  • Education, certifications and licenses.  Most certifications and licenses are public records and are easy to verify. Employers can check the documents obtained from candidates against the public records to confirm their qualifications.
  • Employment references.  Employers typically go beyond confirming the period of services and titles but also seek to discuss with prior employers about the candidates' work style, ethics, technical and soft skills and other concerns.
  • Character references.  Employers would also perform a general search of the candidates' digital footprints on social media sites, blogs and forums for anything untoward.
  • Compliance and criminal activities' indicators.  While employers may request candidates to voluntarily agree on a criminal background check for certain key positions, employers may generally search on internet or subscriber databases for indications of involvement in criminal offences/activities, sanctions or other red flags.
  • Financial standing or credit rating.  In lieu of a credit report, employers would also search the public records, internet and subscriber databases for indications of bankruptcy, pending litigations impacting personal finances (i.e., penalties, contractual disputes, business affiliations under financial difficulties, etc.)

Why is pre-employment screening/employee integrity due diligence important to your organisations?

  • Enhancing productivity.  Pre-employment screening/employee integrity due diligence (together with data analytics) helps you identify the best candidates from the pool, and the best candidates employed equate to enhanced productivity and profitability of the company.
  • Fairness and equality.  Employment is rarely an objective science but having well documented due diligence results, data analytics risk ranking individual candidates or matching candidates' strengths against core requirements of the position can help the company ensure a fair employment process following the company's best interest.
  • Gatekeeper for inefficiencies or fraud.  A robust and consistently applied pre-employment screening/employee integrity due diligence program "weeds out the bad seeds", which reduces the likelihood of bad performance or unethical behaviours to avoid the long-term costs handling these issues.

How can we make pre-employment screening/employee integrity due diligence easier for you?

  • Independence and objectivity.  Our fact-based approach utilises comprehensive open source information and public records research to help you collect information about the candidates.
  • Consistency and comprehensiveness.  Apply due diligence across all employees at agreed employment stages to avoid potential legal consequences from conducting such checks on a selective basis.
  • Going beyond the routine.  Our experience in discounting irrelevant noise and highlighting critical message ensures valuable information is considered in the hiring process.

How can our innovative solution - "Deloitte Business Information Intelligence Platform" ("DI Platform") further enhances your hiring and compliance management efficiency?

Deloitte's new solution - "Deloitte Business Information Intelligence Platform" ("DI Platform") – innovates the way pre-employment screening/employee integrity due diligence is performed, and the data collected can be further integrated with existing HR platforms to facilitate end-to-end human resources management process.

Key functionality and solutions supported by the DI Platform:

  • Information database. Customised employee/candidate information collection to create a legal database with actionable insights to facilitate screening, due diligence and other HR processes
  • Automatic searches and verification. Automated identity or address corroboration, compliance and litigation searches using subscriber databases and public information, and adverse media screening of the candidates/employees to enhance the screening/due diligence efficiency.
  • Workflow and case management.  Information collected from offline screening/due diligence process including interview feedback, reference checks, and other pertinent information can be captured into the platform to create a holistic candidate/employee profile to facilitate work process or decision-making.
  • Data analysis.  Using standard or bespoke metrics developed with HR professions like you, the DI platform can perform data analysis to score and rank the candidates' profiles or compare them against specific qualities you desire for prioritisation.
  • Risk analysis.  The candidates' profiles can be further analysed with information from internal databases or other subscriber databases to identify potential risk that may not be apparent in the initial screening, such as potential connections with key customers, supplier, or government officials.
  • Compliance management.  Once employment is confirmed for a candidate, the information collected from initial screening can be maintained as the basic employee profile to facilitate future compliance assessment and monitoring, such as investigations into potential conflicts of interest or workplace misconduct.

Deloitte BIS, with its deep industry focus and innovative technology, has established business solutions in various use cases.  In addition to the employee background survey introduced in this issue, we will also introduce a series of related articles on how business intelligence can help you enhance your business capabilities and work efficiencies.

Did you find this useful?