A recent report highlights a sharp rise in employment verification discrepancies, reaching 14.26% in FY24, compared to 9.9% in FY21, marking a 44% increase. Factors contributing to this surge include overlapping employment due to remote work and the rise of fraudulent employment verification services, according to the latest annual trends report by AuthBridge.
Increase in Education Verification Issues.
The report also found a 20% rise in education verification discrepancies, largely driven by unaccredited institutions and counterfeit degrees. This underscores growing concerns about academic credential authenticity across various industries.
Industry-Specific Insights.
The study, based on millions of background checks conducted between FY21 and FY24, provides sector-specific insights:
- Fast-Moving Consumer Goods (FMCG): While overall discrepancies declined, the e-commerce sector, which accounts for 17% of FMCG consumption, saw increased verification needs due to the rise in gig workers.
- IT and ITeS Sector: Discrepancy rates fluctuated, peaking at 19.38% in FY20-21 before declining to 9.8% in FY23-24. The primary issues in this sector were address verification and employment verification.
- Banking and Financial Services (BFSI): The sector saw a 10.4% increase in discrepancies, reflecting growing challenges in financial institutions. This rise is attributed to the rapid expansion of financial services and heightened competition among job seekers.
AI and Continuous Monitoring in Background Verification.
The report also noted a growing reliance on AI to enhance background checks, improve accuracy, and reduce processing times. Additionally, continuous employee monitoring is emerging as a standard practice, with organizations implementing periodic re-screening to detect compliance risks, criminal activities, and concerns such as moonlighting.
Adoption of New Verification Methods.
Employers are increasingly using social media screening to identify potential red flags related to behavioral concerns and affiliations. Moonlighting detection is also gaining traction, as organizations seek to mitigate risks associated with employees taking on multiple jobs.
Challenges in the Gig Economy.
The gig workforce witnessed a 12.5% increase in verification discrepancies over the past three years, primarily due to the surge in demand during the pandemic. Key concerns include incomplete address details and identity verification issues, highlighting the need for more stringent screening. Driver’s license fraud remains a persistent problem in this sector, contributing significantly to the discrepancy rates.
Rising Credential Falsification Across Industries
Certain industries are seeing heightened risks of credential fraud:
- Telecom sector: Discrepancies surged to 18.2%, pointing to increased identity fraud.
- Pharmaceutical sector: Discrepancy rates soared by 50%, signaling growing verification concerns.
- Gig economy: Verification issues continue to pose risks, with an overall 12.5% discrepancy rate.
Need for Enhanced Verification Measures
As digital-first strategies become the norm, ensuring workforce integrity and data security is more critical than ever. According to Ajay Trehan, CEO of AuthBridge, organizations must invest in robust, scalable verification solutions to maintain trust and operational resilience in an increasingly complex hiring landscape.
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