Fraud in recruitment: what are the risks to my business?

Fraud in recruitment: what are the risks to my business?

The recruitment sector has never been hotter. Despite economic uncertainty and the continuing fallout from COVID and Brexit, demand for talent has reached record levels, to the point where for the first time since records began there are more job openings than people out of work.

With such a high demand for candidates, speed of hiring is top priority, and recruiters are focused on streamlining their processes to get from application to day 1 as quickly as possible. While making hiring faster is something we champion at Reed Screening, it’s incredibly important that your business doesn’t cut corners that could put it at risk. While it’s very much a candidate’s market right now, there are still bad apples out there who could leave your company liable to a range of damaging outcomes if they were to slip through the net.

Here are some of the areas you need to be aware of:

Right to work checks

Every employer in the UK has the responsibility to ensure that the people they employ have the right to work in the UK. Employers who know or have reasonable cause to believe that an employee does not have the right to work in the UK face imprisonment of up to 5 years and an unlimited fine.

Processes for Right to Work checks have gone through some changes over COVID, with adjustments made allowing employers to check a candidate’s identity documents remotely over a video call rather than seeing them in person. However, these temporary measures are set to be rolled back on the 30th September 2022, after which employers will need to return to their old in-person checking process or adopt new Home Office-approved digital identity verification processes. For more information, read our Right to Work updates or attend a live event with the Home Office on 1st September.

Fraudulent qualifications

While it’s accepted that applicants will put their prior experience in the best possible light when applying for a job, employing candidates who have lied about their qualifications can put your company at risk. This is most obvious when recruiting candidates for professional positions in regulated industries, but can be a factor in a range of sectors from medical and legal to transport and manufacturing.

Failing to verify that your employees hold the qualifications they say they do could put your business at risk of regulatory noncompliance, for example if you’re a solicitor or financial services firm. Fake degrees are also a thriving black market industry in a range of other sectors, and could cause significant reputational damage as well as putting your company at risk of liability for malpractice if the person doing the work is not qualified for the job. Join us on our next event on 4th August with Prospects HEDD and Qualification Check – Qualified for the job? How to spot fake qualifications

Reference fraud

While not necessarily as legally risky as qualification fraud, reference fraud can also have a significant impact on your business. If a candidate claims to have worked in a position they didn’t, or hides the fact that they left a previous role in poor circumstances, this could lead you to hire somebody who isn’t as well-suited to the role as you were led to believe.

While this doesn’t necessarily leave your business open to any legal or regulatory risk, the effect of poor performance within business-critical teams can be huge. Accurate referencing checks can help you flag candidates who could be a poor fit for your organisation, saving you lost time and productivity.

Sensitive information

While it sounds like something out of a film, candidates applying for your jobs could be coming to work for you with the intention of carrying out industrial espionage, data theft and other types of fraud. This is obviously more likely in certain industries like tech, engineering or financial services, but it’s a real, if small, risk that employers need to be aware of.

Criminal record checks, accurate referencing and social media checks can all help to confirm that your applicant is who they say they are and that their intentions are good.

Remote interview fraud

Remote working has a range of benefits for employers and employees alike, from reduced office costs to increased productivity and improved work life balance. In recent years companies have embraced remote hiring as a way of attracting candidates they wouldn’t be able to source in their local areas, and jobseekers from younger generations increasingly see remote working as a requirement, not a perk.

While remote working is here to stay, there are risks associated with hiring virtually. There have been cases of individuals getting somebody else to conduct their interview for them, or even of applicants wearing earpieces and having the correct answers fed to them! At best, interview fraud could see you taking on somebody who’s not as well-suited to the role as they appeared, but at worst it could be a sign of something more worrying, like Right to Work violations.

While this type of fraud is not common, it does underline the importance of accurately verifying the identity of your candidates, to be sure that the person you’re interviewing is the same person who actually starts the job.

Have confidence in your employees with Reed Screening

While some of the examples in this post are much more likely than others, it’s clear that there are significant risks to employers in hiring new team members without carrying out proper due diligence. Whatever industry you’re in, your employees are representatives of your business and their actions can affect your reputation, affect your business performance, or in some cases leave you open to legal liability.

Pre-employment screening can help you minimise the risk, both in terms of legal liability and in terms of lost productivity and performance from an unsuitable hire. At Reed Screening we specialise in providing fast, accurate screening services that give you the confidence that your employees can be trusted, allowing you to get on with growing your business.

To find out more, get in touch today.