Employee Background

Verifications Report
2021 - 2022

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Insights from
3.5 million verifications
across 14 industries

What’s in this report?

Background Verifications are a necessity and not a formality

The growth in the Indian economy has led to a rapid rise in job opportunities. This
has led to a rise in the number of people applying for coveted jobs and careers.
Unfortunately, this has also led to people trying to misrepresent their facts to
become eligible for some of these jobs.

Organisations have been trying to prevent such practices using thorough

background verifications (BGV) of new joining employees.

The last decade has seen BGV transform from a largely human-intensive to
a technology-driven process. Organisations can today check a candidate’s
background across a multitude of areas and attributes.

However, every organisation works within the boundaries of their budgets.

Given that BGV is essentially a cost head, every organisation is trying to find
the right balance between BGV costs and benefits. Being able to prioritise BGV
checks based on criticality and importance is imperative for HR departments.

But the question is, how does one know the checks that are important for an
organisation and those that are not?

This report is aimed at helping organisations prioritise their BGV checks. For
them to know the checks that they cannot afford to ignore vis-a-vis the ones
that are simply good to have.

This report adds logic and science to your check selection process. This will
help you get the best out of your BGV budget.

IDfy’s Check Criticality Matrix plots different BGV checks on two parameters
- the frequency of such fraud appearing in a particular industry and the impact
such fraud can have on companies operating in that sector.

The report is based on 3.5 Million background verifications conducted by IDfy

across 14 industries.

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Index

Industry-wise insights report

1. Banking 1

2. Consulting 2

3. Consumer products 3

4. E-commerce 4

5. Education 5

6. Financial Services 6

7. Heathcare 7

8. Insurance 8

9. IT/ITES 9

10. Manufacturing 10

11. Real Estate 11

12. Retail 12

13. Staffing 13

14. Telecommunications 14

Types of Employee Fraud

1. Employment Frauds 15

2. Education Check 16

3. Address Check 17

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Banking
Court record checks cannot be ignored

The Banking industry has more than 70% people involved in direct cash transactions.
Ensuring that every person employed in the bank has been comprehensively and thoroughly
verified is not just expected from but also mandated to this industry.

IDfy’s Check Criticality Matrix (CCM)

High Frequency

Court

H igh Criticality
Low Criticality

Employment

Address

Education

Low Frequency

Revealing stat
In Banking, red cases due to an adverse court record check is at a much higher rate (2.16%) than the average across
industries (0.22%).

Percentage distribution of red cases in each Legacy hangover

check to total red cases
Traditionally, Banks take 3 months to do a full-n-final (FNF)
settlement with a departing employee. This is probably
down to the sensitivity of the Banking business. There’s
a greater emphasis on checking any possibility of fraud

25% having been committed by the employee before leaving.

19% However, the new Bank that the person joins often gets an
insufficiency status on the Background Verification (BGV)
report. Hence, Banks end up with a higher percentage of

10% failed BGV.

The situation doesn’t help anybody. For the sake of the

46% industry and people involved, this problem needs to be
resolved. Possible solutions can include

1. Use of advanced technology to complete F&F checks

faster
Address Education
2. Coordination within the industry by using intermediate
Employment Court BGV clearances pending final reports.
Consulting
Experience matters. So do employment checks.

Consulting is a much sought after career choice for top students across engineering and
business schools. It is lucrative, glamorous, and promises a good career for those cut out for it.
While it attracts plenty, the hiring criteria for a consultant are often stringent.

As a result, there are many who try to meet the criteria through misrepresentations,
exaggerations or lies. This creates the added burden on Talent Acquisition managers to
separate the wheat from the chaff, making sure only those meeting the strictest of criteria
qualify. The Consulting industry needs to look beyond basic education and employment
checks. Thorough reference checks are almost a necessity here.

IDfy’s Check Criticality Matrix (CCM)

High Frequency
Low Criticality

Address
H igh Criticality
Court

Employment
Education

Low Frequency

Unlikely cause for Reds

Would you believe that the cause for most failed BGV reports in Consulting comes from Address checks?

Yes, it’s true. Although this does not mean that Consultants like to lie about their address. It’s their nature of the work
that requires frequent traveling and change of locations. Given their busy work schedule, they often miss updating
their current location leading to the unexpected scenario of a failed address check.

Percentage distribution of red cases in each Non-negotiable: Employment

check to total red cases Checks
Consulting candidates have been found to be more likely
1%
to present fake experience certificates and documents
6% Address
to meet basic role qualification criteria.

19% Education Consultants have also been found to have left their
previous organisation without informing HR. This keeps
their full and final settlement pending. Any consulting
74% Employment
organisation must ensure a full and final settlement
verification of their incoming consultants.
Court
Consumer products
Beware fake qualifications

With an annual growth rate of 9.4% till March 2021, the consumer products industry has been
less affected by the pandemic. This growth rate requires them to have a steady inflow of talent
across the board - from frontline sales to backroom office, from production to supply chain.

The speed of hiring requirements in the consumer products industry leads to a need for rapid
checks using cutting-edge ID and face verification solutions. This industry can wait neither 45
days for a police clearance certificate nor 15 days for an education verification.

However, our data suggests that a thorough education check is important for the sector.
Companies ignoring it do so at their own peril.

IDfy’s Check Criticality Matrix (CCM)

High Frequency

Address

Education
Low Criticality

Court H igh Criticality

Employment
Low Frequency

Revealing fact
2.65% of all education checks in the consumer products industry come back flagged as ‘red’. It’s way above the industry
average of 0.65%.

Percentage distribution of red cases in each Fake Universities seem to

check to total red cases be popular here
3% Compared to other industries, candidates falsifying their
education records are more likely to use a fake university
Address
8% issued certificate in the consumer products industry.

Education While address checks are more likely to fail in this sector,
24% it’s more due to non-updation of records and relocation
Employment rather than an intention to cheat.
65%
Court
E-Commerce
Don’t forget ID checks in the need for speed

In e-commerce, 70% of background verifications are conducted on off-roll employees. The

hiring of gig workers is seasonal. There is usually a sudden hiring surge before the festive
season. The lockdowns induced by the pandemic have also led to hiring surges in the industry.

This industry is on a rapid growth trajectory. Every e-commerce company is scaling its
operations, moving into new geographies, expanding their footprint into the interiors.

With the need to scale to meet rising demand, and the demand for delivery partners
outpacing supply, e-commerce players are most likely to compromise on verifications
to meet onboarding targets.

IDfy’s Check Criticality Matrix (CCM)

High Frequency

Address
Low Criticality

H igh Criticality
Education

Court Employment

Low Frequency

Revealing Fact
Address checks in this sector have reported significant discrepancies (7.55%). This is largely due to gig workers being
in remote locations where physical address verification is difficult. In some cases the address is non-existent or the
candidate has left the job for a better opportunity before the verification was done.

That’s why leading e-commerce players are starting to use digital address verification methods like reverse geo-
tagging over a live video call.

Percentage distribution of red cases in each Non-negotiable: Identity, Address,

check to total red cases and Criminal Records checks
1% 1% Given the nature of the work here, it is important for
e-commerce companies to ensure that their workers are
Address
11% safe to interact with and/or visit their customers’ homes
to deliver their service.
Education
Identity checks are non-negotiable here. The company
Employment must ensure that the person is who they claim to be. So
87% are address checks and criminal records checks.

Court Giventheneedforspeed,it’simperativetousetechnologies
to do realtime ID verifications, digital location check, and
rapid criminal records checks.
Education
Two most important checks contributing to more
than half of the fraud cases

That the education sector needs stringent and comprehensive background checks is an
understatement. Where kids are involved in a manner that shapes their entire future, ensuring
that anybody coming in contact with them has been verified is an absolute necessity.

IDfy’s Check Criticality Matrix (CCM)

High Frequency

Court
Low Criticality

Employment

H igh Criticality
Education

Address

Low Frequency

Shocking Facts
Two most important checks - education and employment - contribute to 50% of fraud cases in this industry.

It is important for educators to go into details of a candidate’s departure from previous employment. This ensures safety
of students and quality of education.

Percentage distribution of red cases in each Court checks should be mandatory

check to total red cases
Court record checks contribute 42% of total red cases in
this sector.
5%
Given that customers here are students themselves, it is
important to ensure that those interacting with them have
24% been checked for any criminal records.
42% We strongly suggest a reference check along with court
records checks for this industry.

29%

Address Education

Employment Court
Financial Services
Experience check a must to verify the expertise

Financial services companies are stringent about the work experience requirements while
hiring a candidate. This is a coveted industry for job seekers.

IDfy’s Check Criticality Matrix (CCM)

High Frequency

Address
Low Criticality

Employment

H igh Criticality
Education

Court

Low Frequency

What do they lie about and how?

In their search for high paying jobs with growth potential, people in financial services lie most commonly about two
things

1. Their experience to show they possess all the necessary skills

2. Their current locations to show they are located in or around metropolitan areas. This is to get a preference over
those in remote areas who will require moving assistance.

Percentage distribution of red cases in each Watch out for Address and
check to total red cases Employment frauds
2% In financial services, the average discrepancy rate in
6% court checks (0.20) and education verifications (0.64) is
around the average across industries.

14% However, the rate of discrepancy in employment (1.34%)

is 2.5 times higher than the industry average (0.47) and
78% discrepancy in address checks (7.51%) is somewhat
higher than the industry average (6.18).

Address Education

Employment Court
Healthcare
Remote hiring a major obstacle in physical
verification

Healthcare companies source talent from remote corners of the country. The growth in this
industry is significant, driven to a large extent by staff with the right qualifications and training.

However, a few basic hiring bottlenecks are proving to be a stumbling block in this industry’s
growth trajectory.

There’s also a strong trend of candidates in the healthcare industry misrepresenting their
salaries. Salary checks, thus, need special attention in this sector.

IDfy’s Check Criticality Matrix (CCM)

High Frequency

Address
Low Criticality

Employment

H igh Criticality
Education

Court

Low Frequency

Remote locations
There’s a strong trend of people shifting from their hometowns to cities. When they do so, they often fail to update their

Many people working in this sector have studied in institutes located in remote locations. Verifying these certificates
often ends up taking weeks. Many times the records do not even exist.

Percentage distribution of red cases in each 25% address checks turn out red!!
check to total red cases
Because of the various problems mentioned above 1 out
of every 4 address verification cases gets marked as red.
1%
3% 1%
Address This industry needs to adopt technology for effective
hiring

Education
1. Digital Address Verification for quick lat/long capture

Employment 2. Digital Court record check

95%
3. Instant Employment and Education document
Court
validation
Insurance
Collecting the right documents for verification is a
major headache

is especially true for areas such as document collections of new employees.

This industry conducts pre-onboarding and post-onboarding checks leading to multiple

submissions and re-submissions of the same documents. Other than causing friction in the

a massive problem.

IDfy’s Check Criticality Matrix (CCM)

High Frequency

Employment Education
Low Criticality

H igh Criticality
Court

Address

Low Frequency

Revealing stats
Candidates in the Insurance sector are more likely to lie about their education and employment details. The percentage
of red cases in these checks are higher in Insurance than the average across industries.

Employment : 1.09 red cases out of 100 checks (Average - 0.47 red cases out of 100 checks)

Education : 1.13 red cases out of 100 checks (Average - 0.68 red cases out of 100 checks)

Percentage distribution of red cases in each Holding two jobs

check to total red cases
Dual employment and HR being uninformed about
candidates quitting are significant factors in Insurance.

The problem of dual employment can be attributed to a

10% Address
higher attrition rate and availability of opportunities in this
15% Education industry.

Our reference checks data reveals that it is not rare in

15% 60% Employment this industry for the HR remaining uninformed about an
employee’s resignation.
Court
IT/ITES
Specialised courses a must do and a must check

The IT/ITES sector has played a central role in the story of Modern India. The rise of this industry
is known all over the world. This has made the sector one of the most sought after career choices
in the country.

By its very nature, technology is right at the centre of this industry. Having the right skills and
knowledge is critical to working in IT/ITES. This makes it prone to candidates using fraudulent
certificates or claiming certifications they have never done.

IDfy’s Check Criticality Matrix (CCM)

High Frequency

Employment
Low Criticality

H igh Criticality
Court

Address

Education

Low Frequency

Stat that you can’t miss

130% more employment fraud cases appear in IT/ITES compared to the average across industries.

Percentage distribution of red cases in each

check to total red cases
What IT/ITES companies need
IT companies must save time by conducting a pre-
employment reference check and check the validity of
7% the certificates and the certifying authority.
10%
The attrition rate in this industry is high. Many tend to
switch jobs within a few months of joining. So this industry
54%
should conduct basic pre-onboarding checks like ID
29% checks and reference checks. Complete deeper checks
once the probation period is over.

Address Education

Employment Court
Manufacturing
Employment checks are non-negotiable. One bad
hire can cause some serious quality issues

rolls compared to some other conventional industries. The industry requires specialised skills
for specialised roles.

HR and operations managers understand this. That’s why they tend to put a lot of focus on
employment checks. An employee with a past negative record or one with a fake technical
certificate can cause a lot of damage to the company.

IDfy’s Check Criticality Matrix (CCM)

High Frequency

Employment
Low Criticality

H igh Criticality
Court

Address

Education

Low Frequency

Employment checks are important here

The rate of fraud in Employment (1.46%) is 3 times higher in manufacturing than the average (0.47%) across industries.

Percentage distribution of red cases in each Careful about the checks that matter
check to total red cases
Negative address verification contributes 50% to the
total red cases in manufacturing industry. However, as
6% a percentage of the total address verifications, the reds
7% here are a measly 1.82%. This is against an average of
6.18% across all industries.

48% Manufacturing companies should focus on employment,

education and court records in this order of priority.
39%

Address Education

Employment Court
Real Estate
Need to ensure safe customer interactions

The real estate industry is known for large ticket size sales. A typical work profile in this industry
involves close and personal interaction with customers. There’s site visits, conversations, phone
calls galore. Many times there is access to potential customers PII data and financials details.

IDfy’s Check Criticality Matrix (CCM)

High Frequency

Employment

Court
Low Criticality

H igh Criticality
Education

Address

Low Frequency

Ignore criminal records checks at your own peril

Factors mentioned above make criminal background verifications of employees an absolute must in the
real estate sector.

Percentage distribution of red cases in each

check to total red cases
The demand in this sector is highly influenced by cycles
of recession and inflation. So the hiring is seasonal too.
When things are looking up, there’s great demand for
good candidates. During these times, candidates often
19%
hand.

40%
20%

21%

Address Education

Employment Court
Retail
Ensure your candidates are not job hopping

Retail is known for its high employee turnover rate. As a fast growing industry in India that’s
rapidly expanding its footprint in the interiors, there’s opportunities galore for those looking
to start their careers. The skill requirement is not very high and companies often have in-house
training to get people up to speed.

However, the industry is plagued with long working hours in tough conditions. This makes it
the perfect breeding ground for attrition and uninformed absenteeism.

HR managers invest a lot of time, energy, and resources in hiring good candidates.
Unfortunately, they see several of them leave in a matter of weeks. On top of that, they have
to ensure that those who stay refrain from theft and other types of fraud.

IDfy’s Check Criticality Matrix (CCM)

High Frequency
Low Criticality

H igh Criticality
Employment

Court Address

Education

Low Frequency

Keep a close eye on employment history

Employment fraud contributes 26.75% to the total red cases in background checks in the retail industry. Needless
to say, employment checks are extremely important in this industry.

A focus on employment checks helps you spot hidden inconsistencies in a candidate’s career graph. This includes
factors like leaving an organisation fast, behavioral issues and integrity issues at work.

Percentage distribution of red cases in each Don’t ignore gaps in employment

check to total red cases history
Gap checks are an emerging trend in this industry. This
4% 3% allows companies to take a close look at unexplained
Address gaps in employment and education. Candidates usually
use gaps to hide termination of employment or
Education imprisonment by law.

27% 66%
Employment Address checks are
mandatory
Court
Two out of every three red cases in background checks
in the industry are attributed to Address checks. 66.49%
to be specific.
With power comes responsibility

The staffing business works on trust. Customers trust their staffing company to provide them
with the best people possible. However, this trust is earned and built over time. But just one
mistake can bring down years of hard work.

IDfy’s Check Criticality Matrix (CCM)

High Frequency

Employment

Address
Low Criticality

H igh Criticality
Education

Court

Low Frequency

Unmissable Fact!
Fact is that staffing companies simply cannot trust their people to present themselves in the most honest way possible.

That’s because candidates in staffing jobs are 6.5 times more likely to commit employment frauds than in any othe
industry.

Percentage distribution of red cases in each What are they lying about?
check to total red cases 3.32% of all employment checks in the staffing industry come
back flagged as ‘red’. It’s way above the industry average
1% of 0.47%.

5% Forging of employment documents is a common problem

seen in this industry. This, however, is not too different from
trends in other industries.

But a strange spike observed is in the number of people lying

about their tenure of employment. This, certainly, seems to
36% 58% be a problem more seen in staffing jobs.

Don’t ignore the Address

verification
Address checks contribute 58.20% of total red cases in
background checks in this sector.

Address Education
Frequent shift of addresses is a major contributing factor
as people working in this industry are often in jobs that
Employment Court
require them to shift their residences regularly.
Telecommunications
Prevent data breaches with criminal
records checks

The telecom industry handles a lot of sensitive Personally Identifiable Information (PII) data.
It is one of the most sensitive topics of discussion in these times.

It’s probably not surprising that 20% of data breaches in this industry are a result of misuse
of sensitive information by an insider.
IDfy’s Check Criticality Matrix (CCM)

High Frequency

Employment
Low Criticality

H igh Criticality
Court

Education Address

Low Frequency

Every check an equal contributor

Data from background checks in this industry show that every factor needs to be checked with equal attention.
The average rate of fraud in employment checks and court record checks in telecom show up higher than the
average across industries.

Watch out for these two checks.

Percentage distribution of red cases in each Revealing Stats

check to total red cases Candidates in telecom are more likely to lie about their
education and employment details. The percentage of
red cases in these checks is higher than the average
across industries.

20% Employment - 2.21 red cases out of 100 checks

(Average - 0.47 red cases out of 100 checks)
32%
Education - 1.64 red cases out of 100 checks
(Average - 0.68 red cases out of 100 checks)
21%
Court checks are important here
27%
1.71% of all court checks come back flagged as ‘Red’
which is way above the industry average of 0.22%.
Given the sensitive nature of jobs in this industry,
Address Education court record checks are important and should be given
due weightage during hiring in telecom.
Employment Court
Employment Frauds
Common ways to deceit recruiter

The Indian economy is certainly seeing a rising trend in job opportunities - in terms of avenues
and growth potential both. However, there is also a flood of talent that is vying for these jobs.
Complicating matters further is a situation where a large pool of people without the necessary
skills are misrepresenting their records to get ahead in the race. Broadly, this constitutes
employment fraud. Specifically, this is exactly what employee background checks are meant
to detect and prevent.

A falsified employment record can be relatively easily caught if the person is mentioning an
organisation he/she has never worked for. But that’s not the only way people are falsifying their
resumes. There’s a higher proportion of people misrepresenting their designations and salaries.

Using data of more than a million employment verifications, here are a couple of red flags you
simply cannot ignore.

Top frauds in Employment Check

Not eligible for rehire Terminated

2%
3%
Issue with the date of joining
6%
Issue with the last working day 7% Forged Docs
27%
8%
Issues with Designation

11%
Issues with Salary 25%
14%
Issues with Tenure
FNF pending

Industry wise distribution for Industry wise distribution for

discrepancy in salary fake/forged documents

Telecom Banking

Others Others

27% 27% 25% 29%

Real Estate
7%
10% 14%
Media
7% 17%
10% Real Estate
Insurance
Telecom
12% 15%
Manufacturing
IT/ITES Health Care

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Education Check
Blacklisted Universities

The primary purpose of an Education check is to ensure that the certificate presented by a
candidate is valid. However, there’s an overflow of people using certificates from fake universities
to get considered for coveted jobs.

That’s why, in today’s world, not only does one need to verify the certificate but also the certifying
authority. A quick check on a fake or blacklisted Universities database is becoming an essential
step in the background verification process.

Top frauds in Education Check

2%
Course not complete Mismatch in qualification
5% information
No record found
5%
Blacklisted institute/ university

34%
20%

Unapproved University

34% Fake/Forged documents

Industry wise distribution for Industry wise distribution for

blacklisted institute/university fake/forged documents

Others
Banking Others Insurance
15% 17%
Financial 27%
Services
6% 32% Manufacturing
6%
Health Care
Media 7% 7%

16% 17% 23%

23%
Insurance
Banking

Telecom
Telecom

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Address Check
Need for technology

While verifying a candidate’s address is a necessity, the actual verification process is often
arduous and challenging. The vastness of the country, inaccessibility of certain regions,
inaccuracy and inconsistency in addresses, and frequent shift of addresses without updates
in central records are all contributing factors to challenges in address verification.

There is a dire need for the industry to adopt digital technologies for address verifications. The
use of mobile technologies and geotagging is an obvious way to go. There’s also a need to use
technology like mobile apps to stop field agent level fraud when it comes to verifying physical
addresses.

The table below explains the most common verification issues faced by the companies in India.

Industry wise distribution of top frauds in Address Check

Candidate left the job 2%

No such person
5%

16% Shifted from the given address

Unfulfilled insufficiency
34%

18%
Refused to corporate
with verification 25%
Untraceable

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 IDfy helps businesses engage with
genuine people. We provide verification
solutions that accurately identify entities
to prevent fraud and reduce risk. Our
solutions increase trust and safety while
adding the least possible friction.

IDfy’s AI helps validate identity documents,

verify their credentials, recognize faces
and automate workflows. This allows our
clients to streamline customer KYC and
smooth employee onboarding. It also
helps reduce transaction risks among
digital marketplaces.

Since 2011, IDfy has performed more than

70 million verifications for 500 clients.
We consistently rank amongst Asia’s Top
5 Regulatory Technology companies.
Our institutional investors include Blume
Ventures, MegaDelta Capital (NEA), and
Dream Incubators.

Get In Touch

[email protected]
www.idfy.com