Employment-related discrepancies account for the biggest share of red flags across sectors including IT/ITeS, financial services, healthcare, professional services and BPO/KPO/GCCs, according to a report shared exclusively with ET by professional services firm EY.
‘The First Firewall: Background checks as India Inc’s frontline defence’ report is based on one million background checks conducted by EY across various sectors over the last year.
While employment fraud has been a longstanding menace in India, it has risen to concerning levels and is posing a big risk to most sectors.
Top reasons for discrepancies across five major sectors
| Sector | Employment | Education | Civil & criminal checks | Other databases | Address |
| Financial services | 71% | 11% | 14% | 3.99% | 0.01% |
| Healthcare | 83% | 13% | 0.3% | 2.85% | 0.85% |
| IT | 85% | 5% | 3% | 6% | 1% |
| BPO/KPO/GCC | 75% | 10% | 1% | 7% | 8% |
| Professional services | 91% | 4% | 0.5% | 0.5% | 4% |
Source: EY report
“To tackle this, today, background checks have become non-negotiable across sectors,” said Arpinder Singh, global markets and India leader, forensic and integrity services, at EY.And HR heads across industries are increasingly using technology-led background verification solutions. “There’s a growing pattern: ‘How can we use technology to make things quicker?’” Singh said.The technology sector is seeing a surge in moonlighting while the healthcare space battles rising credential fraud amid ongoing talent shortages.
“Validating the licences of healthcare professionals is essential to reduce clinical errors,” said Amit Rahane, partner, forensic and integrity services, at EY. “In financial services, ensuring employee integrity protects confidential data.”
In employment discrepancies highlighted, about 75% of the red-flagged candidates had submitted fake employment documents in the healthcare sector, while 84% had overstated their experience in the financial services sector. Around 45% of the discrepant candidate profiles in the IT sector were found to be moonlighting while 38% of the candidates called out in the in the BPO/ KPO/ GCC sectors did not provide mandatory documents, such as experience letter or service letter, or UAN linked consent, the report found.
For education-related frauds, 50% of such discrepancies that came up in the financial services sector involved candidates who had submitted fake education certificates; in professional services, 88% such cases had submitted fake documents. In 84% of discrepancy cases in the healthcare sector, candidates had obtained certification from institutes categorised as “not accredited/approved/fake” by governing bodies.
According to the EY study, the majority of the offenders are experienced professionals – 96% of fraudsters in healthcare, 88% in financial services, and 79% in IT/ITeS had already spent a few years in the workforce.
Falsified documents are inexpensive, easy to procure and can be generated in a very short span of time, it said.
IT/ ITeS, healthcare and financial services sectors have seen the largest number of recruitments and have been among the first to implement structured and third-party validated background checks.
“In today’s rapidly evolving IT industry, background verification is vital for building a reliable team,” Rahane said. “These practices help organisations by maintaining ethical standards and making informed hiring decisions.”
