A new report has revealed that employment verification discrepancies rose to 14.26 per cent in FY24 as compared to 9.9 per cent in FY21, marking a 44 per cent rise, attributed to factors like overlapping employment due to the rise in remote work and the prevalence of fake employment verification services. The latest annual trends report from authentication firm AuthBridge noted the increased discrepancy rates across various industries.
Additionally, education verification discrepancies surged by 20 per cent, the report added, with unaccredited institutions and fake degrees playing a significant role.
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The report, drawn from millions of background checks conducted during FY21-FY24 period presented crucial sector-specific insights.
Gig economy challenge
The gig economy saw a 12.5 per cent increase in discrepancies over the past three years, driven by the surge in hiring due to the pandemic. The report noted that challenges like incomplete address information and identity verification issues have persisted, highlighting the need for more robust screening processes in this fast-growing sector. Meanwhile, driver’s licence fraud remains a prominent issue among gig workers, with a significant portion of discrepancies attributed to this.
Industry-specific trends
The findings point to significant issues in credential falsification and identity fraud, particularly in the telecom sector, which saw discrepancies spike to 18.2 per cent. Meanwhile, the pharma sector reported a 50 per cent rise in discrepancy rates, while the gig economy is also facing significant risks, with a 12.5 per cent discrepancy rate.
The FMCG sector experienced a general reduction in discrepancies, while e-commerce, which accounts for 17 per cent of FMCG consumption, saw an increase in verification requirements, driven largely by the rise of gig workers.
The IT and ITeS sector experienced fluctuating discrepancy rates over recent years, peaking at 19.38 per cent in FY 2020-21 but significantly dropping to 9.8 per cent by FY 2023-24. The most problematic areas in this sector remained address and employment verification.
In the Banking and Financial Services (BFSI) sector, discrepancies saw a notable rise, a 10.4 per cent increase, highlighting mounting challenges in financial institutions. The discrepancies were driven by the rapid growth in financial services and the increasing pressure on candidates to differentiate themselves in a competitive job market, the report noted.
“As industries rapidly adopt digital-first strategies, the need for secure, reliable, and scalable verification solutions has become essential for maintaining trust and operational resilience. Organisations across sectors are facing an increasingly complex environment where workforce integrity and data security are paramount,” Ajay Trehan, CEO of AuthBridge, said.
Increased use of AI and monitoring
The report highlighted the growing adoption of AI algorithms for background checks, to improve accuracy and reduce turnaround times. Besides, continuous monitoring of employees has also become a new trend, with periodic re-screening becoming common practice to ensure ongoing compliance and detect potential risks such as criminal charges or moonlighting, a rising issue in the workforce.
The report also highlighted several new verification methods that are gaining traction, including social media screening and moonlighting detection. Social media checks allow employers to assess potential red flags, such as problematic behaviour or affiliations it said.
First Published: Oct 08 2024 | 5:12 PM IST
