Common reasons job candidates fail background checks 

Globally, more than one in 10 people applying for jobs last year had unexplained gaps on their CVs (14%) or employment history (10%).

Meanwhile, 9% of candidates failed to disclose that they, or a company they had been on the board, had been sued in a civil litigation case. 

In Singapore, the top three reasons for applicants failing background checks were due to issues with their academic records (26%), a failure to disclose significant financial problems or bankruptcy (23%) and inconsistencies in employment histories (19%). 

These are among the findings of a new report by Veremark, the global background checking and applicant screening HR tech, which reveals the most common discrepancies surfaced by running online background checks on potential hires during 2021. 

The report highlights strong trends sparked by the shift towards global and remote hiring, which the pandemic has made more commonplace. For example, national ID checks were the sixth most common check carried out last year globally, as employers sought to verify that a candidate had the right to work in a particular country. 

The data is based on a sample of more than 100,000 background checks run by businesses, of all sizes and across all sectors, in 180 different countries in 2021.

Background checks encompass everything from academic achievement checks – which verify that a candidate did indeed graduate from the university or college they claim to have attended – to ‘conflict of interest’ checks, which consider whether any existing business associations a candidate has could be problematic.

Properly vetting potential new hires is vital for employers eager to uphold their business reputation and avoid costly mis-hires, mainly when remote hiring means it’s not uncommon for firms to hire people they have never met in person.

In Singapore, a global talent hub, the government has a process to ensure foreign talent has qualifications from an accredited institution to be eligible for an employment pass. In addition, in line with Ministry of Manpower requirements, employers ensure their candidates’ qualifications are genuine.

Academic achievement checks are therefore run routinely. The high discrepancy rate of 26% is likely due to candidates with not globally recognised qualifications or having attended institutions no longer in operation. 

Which checks were job candidates most likely to fail globally?

Globally, employment gap or CV gap checks were the most common areas to return discrepancies. While background checks will highlight a gap of any length of time, employers will typically seek an explanation if a candidate has had a period of unemployment lasting three months or more. 

As a result of the upheaval of the pandemic, more job applicants than before are likely to have gaps in their employment, and employers must make sure these are accounted for. 

Employment history checks – which look at the start and end dates for previous employment, job title and reason for leaving – were another area likely to return discrepancies. Firms will want to investigate any issues highlighted to ensure that the candidate is not willfully misrepresenting their experience and level of competency. 

Which sectors have the highest number of failed checks?

The top three sectors which saw the most background checks picked up inconsistencies in 2021 were fintech and financial services, followed by HR, staffing and recruitment, and technology and software. 

Companies in the fintech and financial services sector ran the highest number of checks when vetting potential employees – an average of seven – followed by professional services businesses with six. 

Top five checks failed per sector (global):

Which checks should each sector be running?

The report reveals that companies are not necessarily running the most relevant checks for their sector. 

For example, the most common checks carried out by businesses in the fintech and financial services sector were global sanctions checks, criminal record checks and adverse financial history checks.

Yet the checks most frequently failed by candidates in this industry were CV gap checks (25%), employment history checks (14%), civil litigation case checks (13%) and conflict of interest checks (7%).  

This suggests that employers need to increase the number of checks they run on potential hires to cover these areas. 

Globally, social media checks, which scan a candidate’s online activity to identify offensive or inappropriate behaviour, amounted to only 0.02% of all checks carried out. Similarly, adverse media checks, which will highlight any negative coverage of a candidate in the press, amounted to 0.71%. 

However, both are valuable checks for employers who want to ensure any new employee aligns with their brand’s culture and values and avoid reputational damage. 

The pandemic has seen the world of work change massively, and HR teams face several new challenges. For example, remote hiring and onboarding have become more commonplace, and, with this, the risks of hiring have increased. For example, candidates who never meet their new boss face-to-face might find it easier to fib about their credentials, while firms rushing to fill vacancies might inadvertently overlook inconsistencies on CVs. 

But hiring dishonest or unsuitable candidates could have serious consequences for any business. Therefore, it has never been more vital to vet candidates, no matter where they are based globally, by running multiple background checks quickly and efficiently and with as little intrusion as possible. Firms across all industries should take note of these findings and consider widening the scope of the background checks they run. While this will potentially increase costs in the short-term, the long-term benefits are invaluable.

Daniel Callaghan, CEO and co-founder of Veremark