Background Verification newsletter by AuthBridge_Jan2014
Newsletter VIII Issue 10 / 2014
The year started with the shocking news of an abduction attempt on Vice
President of a leading BPO by his driver. The incident puts a glaring question
mark on whether organisational leaders, and other professionals for that matter,
should make it a point to conduct driver background verification; and whether
organisations should have a role to play in urging their top honchos to conduct
driver background check. Tenant background check is another aspect which
should gain as much importance as police verification of tenants. Instances like
the recent arrest of two murderers hailing from Bihar by Delhi Police from a
rented accommodation in east Delhi highlight the essentiality of such services.
Corporate fraud is one concern that ranks high on the government’s mind. It has
brought another 76 companies under the scanner as part of the measures to
tackle corporate fraud. Also, a Parliamentary panel has recommended set up of
a coordinated mechanism among investigative agencies for the prediction of
While the best screening practices recommends organisations to define what
should be discrepant once the verification is completed, the screening trends
section highlights discrepancies in address check and the prime reasons
contributing to it.
This issue’s point to ponder section discusses the criticality of age when it
comes to verifying the workforce. Case studies pertaining to reduction in
employee turnover using exit interviews and checking for veracity in sexual
harassment accusation on a board member have been looked at in detail.
A Point to Ponder
Best Practices in Screening
Products and Services
Stirrings within the Nation
EXL’s VP Kidnap Foiled; Driver Mastermind
Noida police foiled the execution of ransom kidnapping of EXL Services’ Vice President, Sanjeev Punn, and arrested the
mastermind driver and one of his accomplices. Investigation revealed that the driver and accomplices decided to kidnap Punn
as they required money to start a real estate business.
Punn was allegedly kidnapped by his driver, Suraj alias Uttam, with the help of his nephew, Monnu and friend, Navraj. He was
taken hostage while leaving EXL services’ office in Noida for his residence in Gurgaon around 10.40pm on December 30. The
accused drove from Delhi to Noida, Ghaziabad and Meerut and kept beating and threatening to kill Punn.
Sanjay Punn’s wife called Kundan, their former driver who had recommended Suraj, when her repeated calls went
unanswered. Kundan told her that Punn’s car had hit someone who was asking for a compensation of Rs.10 Lakh.
Government Orders Probe against 76 companies
Government has ordered probe against another 76 companies as part of the measures taken up to deal with increasing
instances of corporate fraud. This has been the highest number against which investigations have been ordered in a single
Sachin Pilot, Ministry of Corporate Affairs, stated “During the last three years, the Ministry has ordered investigations under ...
The Companies Act, 1956, in 134 cases of corporate frauds through the Serious Fraud Investigation Office.”
As per Pilot, steps initiated by the government include implementation of stricter norms of corporate governance under the new
companies’ law and conferring of statutory status to the SFIO. Use of technology has also been increased to facilitate detection
of potential frauds through data mining and forensic audit technique.
Delhi Police Arrests ‘Tenant’ Gangsters
Delhi Police arrested two gangsters for committing a series of murders in Patna, Bihar. They were in the capital to kill one of
their rivals. The two were carrying two 7.65mm pistols with 11 cartridges and two country-made pistols of .315 bore with 8
cartridges. The accused were found hiding in a rented accommodation in New Ashok Nagar, east Delhi.
The ‘tenants’, identified as Prince alias Chhotu (25) Ravi Singh alias Rahul (25), were wanted for four murders, an attempt to
robbery and two dacoities. Part of an active gang in Bihar, the duo was also behind a number of extortion bids in Patna and
Novafone Charges Employee for Data Theft; Doubts CEO’s Involvement
Touted as the biggest corporate fraud in the history of Liberia’s telecommunication market, Novafone is pressing charges
against one of its employees, Hussein Dakroub, for operating a device illegally to steal information from Novafone, the
government of Liberia, Liberia Telecommunication Authority, and rival carriers like Cellcom and Lonestarcel/MTN.
The device is called sim box which is used by cellular companies to carry out call redirection, service inaccessibility and
missing call-backs. Allegedly, Dakroub, a Lebanese national working as an ISP Technical Supervisor, had received the device
from the company’s CEO Chady Salim. The theft has costed massive losses to Liberia Telecommunication Authority and the
two major carriers, Cellcom and Lonestarcel/MTN.
The Talent Strategy Group
A near-decade of rapid economic growth has transformed India from a source of low-cost labour into a global business
force. As Indian firms like Tata Group and ArcelorMittal purchase their rivals worldwide, others like Mahindra & Mahindra
create low-cost, high quality products that directly challenge their western rivals.
The talent needs of these fast growing firms are fed by well-educated, entrepreneurial MBAs from India’s world-class
Institutes of Management (IIM). In high demand (they average four job offers each at graduation), many of them dream of
starting the next great Indian company that furthers the country’s remarkable ascent.
Underlying these trends is a unique business and cultural commitment to great leadership that has created a meaningful
competitive advantage. Through interviews with top Indian HR leaders and my consulting experience with large Indian
firms, a picture emerges of a country ready to use talent management as a blunt object against their competitors.
The Talent Challenge
India’s extraordinary growth comes despite significant talent challenges. According to NS Rajan, an Ernst and Young
partner and EMEIA Leader for People and Organization, “Despite there being a labour surplus, there is a talent deficit. In
response, the last decade has seen organizations in India embracing more formal talent management practices.” Adds
P.V. Ramana Murthy, VP HR, India and Middle East for Hindustan Coca-Cola, “While Indians possess strong intellects, we
haven’t historically focused on leadership skills as much as some western companies. That’s now changing very quickly.”
Gender diversity also represents a barrier, with women’s role as the primary caregiver and some lingering discrimination
limiting the number of women in the workforce. This has inspired creative new solutions to recruit and retain female
managers, according to a recent BusinessWeek article. Google keeps a taxi on call to allow women to get home easily in
case of family emergencies. Boehringer Ingelheim allows young female employees to bring their mothers along on
business trips to avoid the cultural disapproval young women sometimes face when traveling alone.
Fundamental HR activities like recruiting and retaining employees present another significant challenge given company
growth rates and rising compensation levels. IT consulting firms Tata Group and Infosys plan to add 50,000 and 40,000
employees respectively in 2011 in a country already short on talent. Add to this challenge compensation increases that will
average 13% in 2011, according to a recent AON/Hewitt study, and an average 19% attrition rate.
A Point to Ponder
Impact of Age on Background Check Discrepancy
Both young and mature professionals are finding it hard to land a suitable job, claims a survey report by Randstad Workmonitor
that sampled over 600 Indians.
66% Indians state that workers aged 25 and under struggle to bag a befitting job offer.
79% respondents state that workers aged 45 and above find it difficult to get a suitable job.
82% of respondents admit that experience is a more important factor in hiring younger worker than education.
In other words, higher number of respondents believes that switching to an appropriate job during the middle ages, of around 45
years, is a difficult task.
Can an employee’s age be of any criticality during employee background check?
Difficulties in finding not only a job but the right job often lead to the urge to fabricate few details in the resume.
As per a research conducted by AuthBridge, maximum discrepancies in 2012-13 have been found during the background
verification of individuals ranging from 30 to 45 years of age. (Discussed in detail in the upcoming Annual Trend Analysis
Should such numbers be taken as a wake-up call by India Inc.?
What importance does an employee’s age hold for your organisation?
Parliamentary panel Bats for Coordinated Fraud Detection Mechanism
In the wake of increasing instances of corporate frauds, a Parliamentary panel has put forward its recommendation to set up a
coordinated mechanism among investigative agencies for the prediction of such frauds. Serious Fraud Investigation Office
(SFIO), which comes under Corporate Affairs Ministry, has also been asked to be made a part of the coordinated mechanism.
A fraud prediction model is already being developed by the SFIO’s market research and analysis unit. In addition to it, an IT-
enabled Early Warning System (EWS) is already in place for scrutinising financial statements and detecting corporate frauds.
For optimum results, the panel has recommended that the Ministry should work towards synergising SFIO's proposed Fraud
Detection Model systemically with the existing EWS. The panel has also suggested formulation of a National Corporate
Governance Policy which can include issues related to corporate delinquency in line with the new company statute.
Address verification plays a vital role in background screening. Apart from reconfirming the candidate’s accessibility, address
verification also helps in validating that no criminal record exists in the candidates’ name at the police station of that locality.
Comparison between the discrepancy trends in address check during the years 2010-11, 2011-12, 2012-13 has revealed the
top 5 contributing reasons. Un-traceability had the maximum contribution in 2010-11 but its contribution continually decreased in
the following years. The second leading reason, referee’s refusal to verify, was close to 13% in 2010-11 but increased and
stabilized at around 25% in the following years. For more insights, watch out for the upcoming Annual Trend Analysis Report.
Best Practices in Screening
Having talked about why verification, who is to be verified and what is to be verified, the next key point is when verification is
completed what should be declared as discrepant.
Different industry sectors and organisations within an industry sector have currently very subjective definitions of discrepancy
for some criteria. Typically, a mismatch in information provided by the candidate vis a vis information provided by the verification
source is a discrepancy. The severity of the discrepancy varies between organisations. Currently, there is no standard.
While a difference in tenure of even a day maybe considered Red or Major Discrepancy by an organisation in the Financial or
Banking sector; a difference of 15 days or more maybe considered as a Minor Discrepancy or even a Green in some
organisations from the IT/ITeS Sector.
Best practice would be if organisations first decided the action that they would take if a discrepancy occurs. A Major
Discrepancy in a check should be for reasons which are non-negotiable as per company policy and the action should be
termination or restriction to hiring. All other mismatches should be in a category which requires a Waiver and this should be
policy driven too. Green or All Clear should only be those checks which are completely in parity.
Would a difference in tenure of a day be considered as reason of ‘termination’ of the hiring process or employment? Or
is it a disposition which is acceptable with a waiver?
Would a difference in designation between the stated and the verified be a Major or a Minor Discrepancy?
If the company where the individual worked previously has since shut shop, and employment cannot be verified in the
absence of the HR Department; would authentication of the existence of the organisation during the stated tenure be
considered as waiver?
If the professional reference provided by the individual refuses to provide timely feedback or is inaccessible during the
verification period, is that a discrepancy or is it an ‘unable to confirm’ scenario and to be considered as ‘acceptable’?
If there is a mismatch between the feedback provided by the Human Resources representative and the Reporting
Manager or Professional Reference; which feedback gets higher weightage?
Background Screening companies too will have their own ways of defining this scenarios based on experience and expertise.
Organisations should policy drive this till such time no Industry Standards are set and ensure all possible dispositions are
tagged to their policy guidelines.
Leading Manufacturer Reduces Employee Turnover by Over 80%
A Fortune 500 Manufacturer engaged a third party to conduct employee exit interview surveys on an ongoing basis by
telephone in order to determine why employees were leaving. The surveys were conducted after the employees had physically
left the premises in order to ensure attainment of genuine data.
How does outsourcing make the exit interview process more effective?
Are higher chances of more accurate response the only reason for outsourcing?
Employees did not have any apprehensions while sharing their responses with a third party exit interviewer which had no
judgments regarding the employees in the organization. Through the exit interview, the company found that Supervision was by
far the overriding factor contributing to employee turnover. Performance evaluations were perceived to be unfair. Employee
morale took a dip as a result of such dissatisfactions.
The third party Exit interviewer recommended that the organisation should focus solely on the root cause, which was
determined by a thorough analysis of the employee exit interview data. Within six months of changing the employee perceptions
about the fairness of performance evaluations, and improvement on other fronts also started to reflect. Since the root cause was
driving 45% of all of the Client’s survey questions, this was significant improvement indeed. More importantly, employee
turnover was reduced by over 80%, and the most common reason for leaving became ‘to start a home business’.
AuthLead™ Helps a Leading Service Provider verify an Existing Board Member
A leading services company opted for AuthLead service from AuthBridge to conduct verification of an existing board member
who had been accused of sexual harassment from an exiting employee. The objective of screening was to check for veracity in
the accusation made on the existing Board Member. AuthBridge was provided with the individual’s resume for facilitating the
leadership screening process.
Criminal Records were researched on the incumbent which had remained undisclosed to the Management. 70% exits were of
female employees and those interviewed admitted that the one reason for their exit was sexual harassment by the person in
Secondary research in the media and database searches for criminal cases revealed cases in the name of the incumbent.
Interviews with exited employees who worked either directly or indirectly under the incumbent were conducted and direct
inferences were drawn of the modus operandi the incumbent indulged in. Police records at the local police station of registered
cases were checked to find any mention of the assault cases registered against him which were unreported to the company.
AuthLead report provided to the organisation gave a clear picture which further helped the organisation in taking an informed
Products and Services
Handling of highly sensitive and critical information, wielding the authority to take strategic decisions, sitting at a vantage point
with a clear bird's eye view of the processes, all these come as part and parcel of being at the top of the hierarchical ladder. An
extensive background check to bring in the right leader is, hence, the need of the hour. AuthLead, brought to you by
AuthBridge®, is a detailed Due Diligence on the prospective candidate with extreme attention to research and analysis based
on market intelligence. Mapping the prospective leader's ecosystem in every organisation and cross-verifying details is one of
the most basic steps in the process. AuthLead also helps ensure that the leaders come out clean if they are subjected to FCPA,
UK Bribery Act, Indian Prevention of Money Laundering Act etc. related due diligence at any later stage.
The verification and Due Diligence process during AuthLead goes on till an experienced team of analysts is reasonably
confident that most critical aspects have been adequately researched and that there is nothing more to look for.
Organisations across industries and geographies need to respond to the employee verification requests as a result of which
companies become susceptible to the risks of losing track of responses they have sent out. An internal collusion can result in
potential security threat to a large extent.
AuthNumber, a highly secure database management application by AuthBridge, helps employers manage responses to external
verification requests in a manner which ensures a controlled and appropriate access to information. AuthNumber integrates with
the client's HRMS or external verification applications seamlessly which facilitates the efficient management of verification
response processing. The application makes sure that the HR professionals are able to allocate their valuable time on activities
which are more important.
Whilst working towards employee satisfaction by providing Insurance facilities, organisations often look for insurance cover that
can address their own specific Insurance requirements. To assist our clients in this endeavour, AuthBridge has partnered with
leading Insurance brokerage firm, SecureNow. In our experience there is considerable opportunity to reduce insurance costs or
significantly improve insurance benefits within the same budget.
Ranging from group insurance policies, compensation policies, and professional indemnity policies to office insurance and
commercial general liability insurance policies, the whole gamut of advisory services is structured in line with the corporate
interests. With intelligent recommendations on product specifications and accurately researched market benchmarks, the
insurance advisory service is expected to be a superior option for companies across industries.
Vendor Due Diligence
An organisation operates in an eco system wherein it needs to interact and collaborate with various entities, be it the employees
or the other corporate. Employing human resource, collaborating with a corporate partner, investing in a business opportunity or
roping in a vendor or franchise, everything involves risks.
Due Diligence solutions from AuthBridge ensure that one does not stop at just confirming the authenticity of the entity but take a
step further in order to ascertain its capability as well as its compliance history. Be it partner due diligence, vendor due
diligence, franchise due diligence or investment risk due diligence, all the services strive towards bringing additional information
to the client about the third party so that the client is in a position to take an informed decision.
AuthBridge Research Services Pvt. Ltd.
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