Background screening: Who are you hiring?

Employers aren’t treating the screening process for international workers with the seriousness it deserves, warn lawyers and compliance companies. Colin Cottell investigates

Fri, 24 June 2016 | By Colin Cottell


Employers aren’t treating the screening process for international workers with the seriousness it deserves, warn lawyers and compliance companies. Colin Cottell investigates

Two years ago, new legislation made employers liable for a penalty of up to £20k if they failed to produce the required documentation to show that workers have the right to work in the UK.

One might think that such a draconian penalty would have focused minds. But that is far from the case, according to Annabel Mace, who heads the business immigration team at law firm Squire Patton Boggs. “I am dealing with lots of businesses where I have been asked to advise on penalties that have just been issued to them,” she says.

Stefan Sosnowski, director of immigration compliance and validation company uComply, reckons that around 1% of documents supplied to it for checking by clients are “questionable”. For employers used to a constant diet of stories of illegal immigrants exploiting the UK’s immigration system, such a low figure might even appear reassuring. But according to Sosnowski, the risks of getting it wrong just once are considerable. And they are not just financial. “There is also the reputational risk, which can be huge. You are likely to be plastered all over the local paper. And if you are deemed to be at fault, what do your clients think? They are not likely to look kindly on it,” he explains.

In addition to these right-to-work checks, you might expect employers to carry out other background checks as standard practice when hiring workers from overseas. Employment record checks, educational background checks and following up with referees immediately come to mind.

But here also, there is evidence that employers are not tackling the issue with the seriousness it deserves. According to international background checking company SterlingBackcheck, while 88% of companies employ workers with international experience, only 45% conduct international background checks.

In an increasingly globalised talent pool, such figures are surprising. But they are also worrying, opening up employers to the real risk of taking on people who are not who or what they say they are, including those hiding criminal records. There is also the considerable cost of having to hire a replacement. According to economics consultancy firm Oxford Economics, on average this works out at more than £30k.

Based on trends for the flow of migrants into the UK, all the evidence indicates that unless employers take appropriate measures these risks are set to rise. According to the Migration Observatory at the University of Oxford, the percentage of foreign citizens in employment in the UK increased from 3.5% in 1993 to 10.5% in 2014.

What is more, as a SterlingBackcheck White Paper, entitled ‘Managing Risk in a Global Marketplace’, points out, these figures do not include “the considerably greater number of individuals, who may have lived, worked or studied abroad”, particularly in the EU, where there is free movement of workers.

Hedley Clark, managing director of background checking company Credence, accepts that screening individuals who were born, worked and lived overseas, particularly foreign nationals, adds a layer of complexity to the normal screening process. “You don’t necessarily know the company they worked for, or about their education, and whether the colleges are even genuine,” he says. One of the biggest issues is language, he adds, and having the language skills to have a conversation with referees in different countries.

Clark says a further difficulty is that while background screening is an accepted part of the hiring process in the UK and other countries such as the US, it is often unfamiliar to employers in other parts of the world. This can sometimes turn to suspicion, particularly when dealing with medium or small-sized companies overseas, says Clark. “Part of it is explaining what you are doing and why,” he advises.

Rachel Bedgood, chief executive and founder of background checking firm CBS (Complete Background Screening), says one of the biggest issues for employers is understanding what information they are legally allowed to obtain to validate a potential employee’s history. “Laws and legislation vary from country to country,” she says.

A case in point is criminal record checks, says Oran Kiazim, vice president at SterlingBackcheck. While in the UK an employer can request a basic disclosure to check whether a candidate has a criminal record, in France the individual is the only person allowed to receive their criminal record. “They may choose to provide that to the employer; they can’t be compelled to do so,” Kiazim explains.

Poland, where employment law provides a list of data that employers are allowed to ask about, and anything outside of that is illegal is even more restrictive, he says. In Germany, concerns over data privacy are such that “if an employer asks for information they are not legally entitled to, the candidate is entitled to lie”, adds Kiazim.

Steve Girdler, MD EMEA, APAC at employment background checking company HireRight, says employers also need to take into account what is culturally acceptable.
“The culture in Germany is still very much around a contract of trust in the recruitment process. Candidates still go to interviews clutching their portfolio of certificates. With technology and Photoshop we know how easy it is to falsify documents, but that doesn’t mean that background checking is culturally accepted in Germany. It isn’t.” 

Even interpreting the information that you receive from a background check isn’t always simple, says Clark. “It is widely understood in the German HR community (though not necessarily to employers outside Germany) that a reference that says ‘he did a satisfactory job’ means he was rubbish,” he says by way of example.

In contrast, says Kiazim, employers in the US are relatively unconstrained, either legally or culturally. “There isn’t the same idea that data protection and privacy are fundamental rights. It is more of a consumer protection matter and employers have a high degree of flexibility to process the personal information required.”

Kerstin Bagus, director of global initiatives at international screening company ClearStar, and a board member at NAPBS (National Association of Professional Background Screeners), a US-based trade body for screening companies, says background screening is a well-established part of the hiring process in the US. In part, she says this is driven by automation that keeps costs low. According to Girdler, the widespread availability of databases in the US means that it is not uncommon for screening to take three days and often less.

However, Bagus says the idea that the US and Europe are worlds apart in terms of screening is an exaggeration. “There is no doubt that the EU has been instrumental in raising the privacy bar for everybody. In the US we are now talking about data protection and limitations on data retention. It is not a one-way street,” she says.

Although the legal framework and attitude to screening in different countries around the world are clearly important for UK employers, the rules on right to work continue to cause concern, says Mace. There are two key aspects, she says. The first is ensuring that the checks are carried out before employment begins, either during the selection process, or literally on the first day. Mace emphasises the importance of carrying out checks in the way proscribed by the Home Office, and advises employers to use the checklist available on the Home Office website.

Sosnowski says employers need to recognise that despite the 35-page Home Office guidance, things are not always black or white. “It’s a matter of interpretation. The guidance will say you need to have this document and you need to have that document, but when you speak to a Home Office inspector in London they will say one thing, while an inspector in Leeds will say something different, and an inspector in Scotland will give you a different answer again,” he says.

Tim Richards, a specialist in UK corporate immigration law at law firm Clyde & Co, says the principle of treating people equally is an important one. In particular, he says they should avoid any sort of blanket policy that would indicate that candidates requiring a visa are treated less favourably. “They could open themselves up to a claim of indirect discrimination on the grounds of race,” says Richards.

Mace says one particular area where employers “tend to get caught out” is where they fail to do follow-up checks when an employee’s visa expires. Although an employee is protected legally if they make a new application to the Home Office before the old visa runs out, “what some employers are not aware of is that they have to do their own follow-up check with the Home Office to corroborate what the employee has said to them”. Mace says employers are being fined for not doing this.

Having documentary evidence showing the right-to-work checks were carried out should protect employers from being fined, but according to Sosnowski, checking the documentation of potential employees also has an important deterrent effect on workers looking to exploit the system. “Workers talk among themselves, and they say ‘we have got dodgy documents and they accepted us’. And once other workers know that, they are going to knock on your door,” he says.

Bedgood agrees: “It is the organisations that tend not to explain at the outset that all staff will be subject to screening – it’s there that the bad apples will appear.” In contrast, “organisations that adopt and enforce a full screening process will rarely see individuals with adverse information that would make them unsuitable”.

Sosnowski says that small or medium-sized companies may find this particularly difficult. In contrast, he says: “Most HR directors of the larger companies take it very seriously and try to mitigate the risk by stipulating that everyone we employ must be checked in a certain way.” However, he warns even they have their work cut out. “We are seeing that fraudulent copies of documents are getting better.”

And no matter how good a company’s screening processes are, in some situations a standard ‘paper exercise’ simply isn’t enough, says Clark. For example, when checking whether a particular employer or educational institution overseas is genuine, an employer may need to find someone locally who can physically visit the address.
“There have been occasions where we have sent someone to a quoted address and there is nothing there,” he says.

In India, Clark says there is no central criminal record database, so the choice is either to do a local police search or actually physically search the courts themselves.

International mobility of talent and the movement of workers around the world bring many benefits to employers. Screening undoubtedly costs time and money, but the benefits of knowing who you are employing and the risks of getting it wrong should not be underestimated.

Good practice

  • Be aware of the legal constraints in obtaining data about individuals in different countries
  • Take account of cultural sensitivities towards background screening
  • Make sure the screening process is transparent to the candidate
  • Inform your internal hiring 
  • manager that international background screening may delay a candidate’s starting date
  • Line managers can’t be expected to be experts on foreign documents, so provide them with a help desk and/or the technology to flag-up questionable documents
  • Train your staff well
  • Treat all candidates the same – otherwise you could face a discrimination claim
  • Be aware of industry-specific screening requirements – for example, in the security industry or the financial sector

Industry view

Hedley Clark, MD, Credence: “You don’t necessarily know the company they worked for, or about their education and whether the colleges are even genuine”

Steve Girdler, MD EMEA, APAC, HireRight: “The culture in Germany is still very much around a contract of trust in the recruitment process

Oran Kiazim, vice president, SterlingBackcheck: “In Germany, if an employer asks for information they are not legally entitled to, the candidate can lie”

Rachel Bedgood, CEO, CBS: “It is the organisations that tend not to explain that all staff will be subject to screening – that’s where the bad apples will appear”

Stefan Sosnowski, director, uComply: “There is also the reputational risk, which can be huge. You are likely to be plastered all over the local paper”

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