Damage to the company’s reputation. The costs of replacing employees who did not have the qualifications stated on their resumes. Risk to the safety and security of fellow employees and customers. These are just some of the many problems that can arise if a company hires the wrong candidates. To avoid such instances, many employers in the U.S. have recognized the benefits of background checks and comprehensive screening programs.
And yet — as more companies look to the growing markets of the Asia-Pacific (APAC) region to expand their businesses, they often find the population to be not yet fully accustomed to or accepting of the idea of screening candidates.
With employers increasingly leveraging the workforce of the emerging markets of APAC, many have tried to replicate their domestic screening practices and apply them to their hiring efforts in the region. Unfortunately, these efforts don’t always prove to be successful, and companies that fail to get the screening process right, or lack one altogether, open themselves up to compliance risk. As a result, they may then contend with negative attention to the company, harm to the brand and excessive financial costs and penalties.
To avoid such instances and ensure a successful hiring strategy across the APAC region, a comprehensive background screening program is crucial. Yet conducting background screening in those countries can be difficult. Faced with resistance from local managers and candidates alike, as well as a complex assortment of laws regarding screening procedures and data security, the process can be extremely challenging and introduce risk for companies that don’t get it right.
In its recent research, “First Advantage Employment Screening Trends Report: Asia Pacific,” First Advantage provides an in-depth exploration of background screening processes in APAC and uncovers many facts that employers hiring workers in the region should know to ensure a successful and fully compliant screening practice. Five of the most important takeaways from this research are included here:
The Biggest Challenges
Despite the many benefits of conducting background screening to verify the credentials and identities of candidates and employees, doing so presents some significant challenges in APAC. One of the biggest concerns among employers, and one of the reasons why some are reluctant to implement a screening program in APAC, is the rapidly changing legislation regarding screening and data security. These laws vary widely between the different markets of the region and differ greatly between cities in the same country, causing many companies to fear the risks that can arise if their screening processes do not comply with local regulations.
Even companies with enterprise-wide screening programs find difficulties when transferring their processes to the APAC region. For instance, many candidates are still unfamiliar with the process, as it is a nascent practice in the region. Candidates may feel that they are being subjected to a private investigation that is beyond their control. However, candidates should be reassured that all screenings are conducted with their full consent.
Although background screening is not yet widely practiced, there is rapidly growing acceptance. First Advantage reports that there was a more than 10 percent increase in the number of background checks conducted in APAC between 2012 and 2013. As more companies seek to hire in APAC, and individuals in the region continue to relocate internationally to pursue their academic and professional goals, the ability to verify the identity of an employee and ensure they have the skills they say they do is essential for hiring and organizational success.
In particular, performing background screening can help the company ensure it hires the right people the first time, thereby eliminating the costs and extra time involved with finding replacements for an employee who resigns or is let go. The company can also protect itself from the reputational damage or potential risk to workplace safety or confidential data that result from negative hiring. In addition, there is growing acceptance of the practice among candidates, as they value how background screening can weed out individuals with forged credentials who may otherwise take the jobs of qualified applicants.
Effectiveness of Background Screening
As First Advantage has discovered, employers that do conduct background screenings of their candidates are able to screen out a large number of candidates who pose potential problems. In the first quarter of 2013 alone, one in 10 screening reports conducted in APAC resulted in discrepancies or areas of concern. Companies that conduct six checks or more for each candidate, a practice accounting for nearly half (40.4 percent) of all background screenings in the first quarter of 2013, are nine times more likely to uncover an alert than employers that only conduct one or two checks.
As background checks continue to gain acceptance, so too have the types of checks requested by employers. Employment verifications and education verifications are the most often conducted, with 81 percent of First Advantage clients requesting these checks. These are followed by criminal checks (51 percent) and financial-related checks (41 percent). Overall, discrepancies related to employment history accounted for 49 percent of all discrepancies in APAC. Although criminal history and financial-related searches result in the lowest discrepancy rates (4.9 percent and 2.6 percent respectively), such discrepancies can pose greater legal, compliance, reputational and security risks than the other types of discrepancies.
Read: How to Ward off Background Check Class Action Suits
Differences by Countries and Industries
Despite more employers throughout the APAC region conducting background screening, their use varies widely across the different countries of the region. For example, instances in which companies conducted six checks or more checks per candidate are most prevalent in the more established markets of Singapore, Hong Kong, Australia and New Zealand.
Although discrepancy rates continue to rise in certain countries, such as China and Malaysia, overall discrepancy rates have dropped in other locations. This can be attributed to increased awareness of the screening process, causing more candidates with false credentials not to apply at the risk of being discovered. In addition to large variances by country, the types of discrepancies found in background checks also differ by industry. Candidates in the manufacturing, energy and financial sectors are most likely to have discrepancies; overall, 15 to 22 percent of screening reports in these industries raised an alert.
How to Get Started
The findings from First Advantage’s research show that employers in APAC that screen their candidates find a larger number of discrepancies, and employers that have yet to adopt the practice may end up hiring those individuals with false credentials. As a result, they are opening themselves up to significant risks. To protect the company, an effective background screening program should be an essential part of any employer’s hiring strategy in APAC. Yet running a screening program requires compliance with the various – and often changing – regulatory environment of each country and local region, something which many employers may be uncomfortable doing.
In order to ensure a reliable and compliant screening program, companies can benefit from working with a background screening partner experienced in the dynamic regulatory environment of APAC. The right provider should be up-to-date on the latest legislation governing the background screening process, helping to ensure the company continually hires the right talent while checking their credentials in a safe and legally compliant manner.
A Successful Screening Strategy
As employers increasingly look beyond their home borders to find talent that can bring their businesses to the next level, APAC is a prime destination. While the region offers access to new sources of qualified talent, employers may also find themselves at compliance risk if they don’t screen their candidates – or fail to do so appropriately. With an effective background screening program in place, managed by a trusted screening solutions provider with proven expertise in the region, the company can ensure a successful hiring program across APAC.