According to the findings of a recent research study conducted by First Advantage, the global background screening partner of TransUnion (NYSE: TRU), there had been a 200 per cent increase in the number of employers requesting credit checks on candidates since 2008. Almost 18 per cent of all job applications collected in the study had recorded with inconsistent information in Hong Kong, the highest across Asia. This indicates the importance of conducting background screening during the recruitment process.
Trend towards need for candidate credit checks grows in a rapid pace to avoid any unwarranted and compromising situations
It is a common practice for employers to screen candidate profiles during the recruitment process. There is also a growing trend towards conducting credit checks. As TransUnion reveals, the number of employers requesting such credit checks doubled in 2017 as against 2008 and increased by 30 per cent since 2016. The credit reports indicate the candidates’ financial status including their lending records, on-time repayment or excessive lending. This also reflects one’s personal credibility and chances of being financially overextended. The reports can also show candidates’ public records, such as bankruptcy.
First Advantage revealed that industries like banking, financial services, security, pharmaceutical, luxury retailing, IT vendor services, cleaning, courier, and gambling often require credit checks on candidates. Main reason for this is that these are positions that require a higher level of trust. Successful candidates might need to handle vast amounts of sensitive data or there might be high chances for employees obtaining client personal particulars, cash or valuable items. Over all industries, it is most common for financial services organisations to review candidates’ credit reports. The Guideline on Anti-Money Laundering and Counter-Terrorist Financing implemented by the Hong Kong Monetary Authority since 2008 mandates financial services organisations establish, maintain and operate appropriate procedures to review references of existing employees and ensure integrity of new employees up to required standards.
Extending employment or education dates to cover up job transitions
Background screening also covers social aspects of the candidates, such as civil litigations or criminal records, not focusing on verifying their work experience and education background only. As per First Advantage’s study, the percentage of inconsitent information provided by candidates in Hong Kong was the highest across Asia, reaching 18 per cent, the actual reality varying from the records in curricula vitae. Such phenomenon was also found in other Asian cities. Singapore was recorded with a 17 per cent discrepancy, Japan and Korea about 9.2 per cent and China 7.5 per cent only.
Discrepancies regarding the actual and provided dates of employment and education were noted in one out of every 12 candidates’ reference checks. As per TransUnion, candidates might extended the dates to cover up job or study transition periods. Whilst, there was misinterpretation of internal with external job titles among every 19 candidates.
One in four Hongkongers’ credit scores changed every six months; regular credit checks play safe
Along with background screening, TransUnion has also suggested an annual credit checks on employees of, for example financial services organisations, or vendors involved in handling vast amounts of sensitive data or client personal particulars. Credit scores are highly dynamic and change over time. According to TransUnion, the credit scores for every one in four Hongkongers changed every six months (information as of October 2017 - April 2018). It is advisable that employers or buyers review the credit checks regularly to ensure staff and vendor integrity.
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