In today's extremely competitive job market, organizations throughout India increasingly are embracing hiring remote employees. However, the recent increase in resume fraud, partly due to job cuts in economic downturns, has become a reality to make thorough employee background checks more imperative than ever before.
As Indian business entities continue to expand in scale, verifying the credentials of possible employees is one of the critical moves that leads to the prevention of risk as well as guaranteeing value compliance in any employee joining the companies. Employee background checks in India are one of the fundamental parts of the hiring process to verify the credentials of the individual and his suitability for the job. This guide shall discuss the current status of employee background checks in India, including legal requirements, types of information, benefits, and best practices for ensuring compliance and accuracy.
An employment background check in India is an essential tool for organizations that are interested in verifying the authenticity of a candidate's qualifications and work history. It involves an exhaustive review of a candidate's personal and professional background to ascertain the genuineness of their claims and to ensure they are fit for the role. For employers, the background check information avails aspects such as criminal history, education qualifications, employment history, and much more. Verifying this information minimizes the chance of hiring individuals who may be problematic for the reputation, security, or operations of the organization.
There is no all-inclusive legal requirement in India for all employers to conduct background checks. However, some industries and positions may require it under different regulations. For instance, the banking, financial services, and insurance sectors generally require strong background checks since they deal with very sensitive work that has to meet certain regulatory requirements.Background checks do not lie in the scope of all countries, but there are certain advantages to the reduction of risk and ensuring that your workforce is of the highest integrity. Employers are encouraged to consider their industry, the nature of the job, and any relevant legal obligations when deciding whether or not including these checks in the hiring process is in their best interest.
In India, background checks vary according to the position and industry. Still, some of the basic elements that make up the entire process usually follow these:
Common checks carried out by employers
It verifies the identity of the candidate by using documents like a PAN card, Aadhaar card, passport, or driving license.
Talking to previous bosses or colleagues to get information regarding the work habits, performance, and character of the applicant.
Reference check or direct verification with the previous employer for job titles, dates of employment, job roles, and reasons for leaving the previous positions.
This is highly essential for any position that has financial responsibilities. It checks the credit score and outstanding debts of the candidate.
Testing the candidates for drug or alcohol usage, especially if the position involves operating machinery or driving.
Since there has been a growing incidence of false educational claims, verification of the genuineness of degrees, diplomas, and certificates issued by the concerned educational institutions is a must.
Criminal record check, that is, to find out whether or not there exist any criminal records or ongoing criminal cases against the candidate.
Checking the necessary licenses or credentials to practice the profession, such as a medical license or even a driving license.
Verification that the address details of the applicant is correct
Examination of the public profiles on social media to evaluate the applicant's digital identity and work character.
Legal restrictions for an employer also need to be kept in mind. For instance, privacy law in India governs what type of information is collected through background checks. It is thus very essential to be guided by such laws.
Did you Know?
Do you know that up to 30% of resumes are false or overstated? A background check will pick up these inconsistencies before they cause the wrong hiring.
There are several compelling reasons why conducting background checks is important for companies in India:
Background checks help identify red flags such as false credentials, criminal histories, or discrepancies in employment records. This reduces the risk of hiring candidates who could jeopardize the company's reputation or security.
Some areas in India such as finance and healthcare are supposed to conduct criminal checks as regulatory requirements. Failure to observe these will incur fines, litigations, or loss of an organization's integrity.
Carrying out criminal checks among other related background checks ensures low risks of incidences in the workplace hence giving a secure working environment to workers.
Verification of qualifications and previous work experience through employee background checks in India means more informed recruiting decisions and candidate selection that fits within the organization's values and culture.
Proper checks prevent any fraudulent claims done by the applicant such as fraudulent educational degrees, and employment records.
Usually, background checks occur after a conditional offer of employment has been extended. Most employers screen their applicants as part of the pre-employment process to ensure that the candidate meets all the necessary qualifications and standards before officially joining the company.
Companies that invest in employee background checks can enjoy several advantages, including:
Clean Brand Image
The hiring of individuals with a clean record and also a credible background protects the company's reputation and brings about customer confidence.
Compliance with the Law
Following the background check requirements in regulated industries will ensure that the company remains free from legal punishment and, therefore, will create an atmosphere of integrity.
Improved Employee Retention
A background check proves useful in detecting candidates who will be hard workers and desire to work for long; thus, this improves the retention of employees.
Reduced Turnover
Background checks ensure good performance in jobs by employing the right individuals and thus less turnover rate.
Little-known Fact
Ever known that a company with background checks on candidates reduces the percentage of turnovers to as low as 30%. This is due to the high percentage of qualification and reliability when hiring employees.
Background checks are performed differently by companies, depending on the requirements and availability of resources. Larger companies hire third-party agencies, which specialize in compliance and conducting thorough investigations. Smaller companies may do it internally, within their HR departments.When conducting background checks in India, the following factors must be kept in mind by employers:
There must always be a proper business reason to conduct the background check, whether or not legally required.
There must always be written consent obtained from candidates indicating the purpose and scope of the background check.
The process is communicated clearly with the candidate to allow them the right to review and correct information where necessary.
All information collected should be kept confidential and secure, shared only with authorized personnel.
If you choose to outsource your background checks, make sure that you are dealing with a credible and accredited provider that adheres to industry best practices.
Here is a step-by-step breakdown of the typical background check process in India:
Get the Candidate's Consent:
Get written consent from the candidate with an explanation of the scope and purpose of the check.
Information gathering:
The screening agency is going to collect all the personal and professional information a member of the workforce may provide for the employment process, including work experience, educational qualifications, criminal history, and financial status.
Duration:
The period taken ranges between a few days to weeks according to the details of the background check.
Verification:
The organization will verify all the information derived from different sources like public records, previous employers, and institutions of learning.
These are the legal requirements that must be followed by an employer to conduct background checks in India:
There should be written consent from the candidate.
The candidate should be informed of the purpose of the background check.
The process should be fair and without bias.
The employers must maintain strict confidentiality and ensure the security of the data collected.
To avoid compromising the integrity of the background check process, companies should be aware of the following mistakes:
Skipping Candidate Consent:
Conducting a background check without obtaining explicit written consent from the candidate is both unethical and illegal.
Over-Collecting Data:
Avoid data collection by privacy laws and do not collect too much or unnecessary data.
Ignoring Data Security:
Protect your data with adequate measures to avoid unauthorized access or breaches.
It would be advisable to collaborate with a third-party reputable background verification service in India as the most effective manner of doing the background check. These companies focus on providing such information, hence ensuring local legal compliance and the entire process starting from taking candidate consent to providing the outcome.
Alternatively, employers may choose to work with an Employer of Record (EOR), who can manage the background check process on your behalf, ensuring compliance and confidentiality.
Planning to Hire in India?
Here’s How Credible Corporate Services Can Help
While hiring employees in India, it is essential to understand the local regulations related to background checks. Credible Corporate Services will guide you on how to conduct ethical, compliant, and accurate background checks. Our team is well-versed in India's employment laws and can help you navigate the complexities of background screenings from obtaining candidate consent to interpreting results. We could ensure background checks as part of hiring both domestically and globally since we have experience working with Indian employment law and maintaining an international network.