To Get Hir­ing Right, Star­tups Ex­pand Back­ground Checks

A re­cent sur­vey by First Ad­van­tage finds as much as 87% of dis­crep­an­cies at se­nior mgmt level

The Economic Times - - Careers: The Fast Track -

Sreer­adha D Basu & Saumya Bhat­tacharya

New Delhi | Mumbai: Star­tups are do­ing more back­ground checks than be­fore on their po­ten­tial em­ploy­ees, as they are faced with the pres­sure to hire right. As much as 87% of dis­crep­an­cies found dur­ing a re­cent sur­vey by back­ground screen­ing so­lu­tions firm First Ad­van­tage were at the level of se­nior man­age­ment. Of these can­di­dates, 42.3% were in the 22-30 age group, in­di­cat­ing that a sig­nif­i­cant chunk of them be­longed to the startup ecosystem.

“We see more star­tups seek­ing back­ground checks. Wrong hir­ing can sully the im­age of the star­tups, and cash-strapped star­tups can’t af­ford to hire the wrong per­son,” First Ad­van­tage manag­ing direc­tor Pu­rushotam Savlani said.

Em­ploy­ees can eas­ily go from be­ing as­sets to li­a­bil­i­ties, and pose a risk to the cred­i­bil­ity es­tab­lished by the startup, es­pe­cially those in the fi­nan­cial tech­nol­ogy sec­tor, he said. Most of the back­ground checks that the star­tups want to do are in SEC­TORS LIKE skills, lead­er­ship styles, cre­den­tials and pos­si­ble cases of sex­ual ha­rass­ment against the po­ten­tial em­ployee. Paytm has en­gaged a pro­fes­sional agency to val­i­date the past em­ployer cre­den­tials, ed­u­ca­tional qual­i­fi­ca­tion and crim­i­nal an­tecedents for all new em­ploy­ees. “Any re­ported non­com­pli­ance in back­ground ver­i­fi­ca­tion en­sures strict ac­tion against the can­di­date, lead­ing to re­vo­ca­tion of the of­fer or ter­mi­na­tion of em­ploy­ment. Can­di­dates are made aware of this pro­ce­dure as a part of the se­lec­tion ex­pe­ri­ence,” said Paytm as­so­ciate vice pres­i­dent Manav Jain.

Cus­tomer-fac­ing roles, in par­ticu- lar, are a key fo­cus area when it comes to back­ground checks dur­ing the hir­ing process. “These are the folks who are ac­tu­ally de­liv­er­ing to peo­ple’s houses, so safety is a key is­sue,” said TN Hari, HR head at on­line gro­cery player BigBas­ket. “We have two agen­cies to do back­ground checks on these in­di­vid­u­als for us,” he added. For se­nior man­age­ment, in­for­mal ref­er­ence checks are con­ducted to see where the po­ten­tial hire stands on is­sues such as in­tegrity, tak­ing own­er­ship, over­all at­ti­tude, etc., said Hari.

At on­line fur­ni­ture and home dé­cor brand Ur­ban Lad­der, the com­pany re­li­giously does three things when hir­ing em­ploy­ees and se­nior man­age­ment: manda­tory ref­er­ence checks through in­ter­nal or ex­ter­nal net­works, a le­gal ver­i­fi­ca­tion for cus­tomer-fac­ing em­ploy­ees and put­ting them through a thor­ough train­ing and in­duc­tion process. “Back­ground checks and ver­i­fi­ca­tions are es­sen­tially fenc­ing mech­a­nisms for an or­gan­i­sa­tion,” co-founder Ra­jiv Sri­vatsa said.

One of the rea­sons star­tups are seek­ing more back­ground checks is that in such early-stage com­pa­nies, there are fewer peo­ple over­see­ing pay­roll, checks and ven­dor lists, mak­ing it easier for an in­sider to siphon off money and get away with it. “Run­ning thor­ough back­ground checks and ref­er­ence checks help star­tups pro­tect them­selves from these types of bot­tom feed­ers, and is one of the rea­sons you should ex­pect a back­ground check be­fore be­ing hired with a de­vel­op­ing en­tre­pre­neur­ial firm,” said First Ad­van­tage’s Savlani.

At the top lev­els, en­sur­ing the right hire be­comes much more im­por­tant. “The im­pact of se­nior man­age­ment hires is mas­sive in a com­pany’s evo­lu­tion. You need to have a thor­ough un­der­stand­ing of that per­son’s in­tegrity and val­ues. The more com­pa­nies align on that right from the be­gin­ning, the bet­ter it is for all con­cerned,” said San­deep Murthy, a part­ner at ven­ture cap­i­tal firm Light­box Ven­tures.

But while screen­ing is im­por­tant, so also is hir­ing some­one who is the right cul­tural fit.

“We screen for ap­ti­tude, but hire for at­ti­tude,” said Murthy. Vivek Prab­hakar, CEO of Chum­bak De­sign, said while se­nior hires are al­ways care­fully vet­ted, for him the more im­por­tant as­pect is the cul­ture test to see whether the can­di­date is a good fit for the com­pany. “We don’t want peo­ple who en­gage in pol­i­tics or dis­rupt the equi­lib­rium of the or­gan­i­sa­tion. What we are look­ing for are peo­ple who gel with the or­gan­i­sa­tional cul­ture; others are weeded out,” Prab­hakar said.

At top lev­els, en­sur­ing the right hire be­comes much more im­por­tant

MOST OF THE DIS­CREP­AN­CIES are found in the em­ploy­ment com­po­nent, fol­lowed by ad­dress and ed­u­ca­tion

DIS­CREP­ANCY RATES FOR em­ploy­ment and ad­dress checks are high in south­ern zone; ed­u­ca­tion checks are more in north­ern zone

CITY-WISE, BEN­GALURU leads in em­ploy­men­tre­lated dis­crep­an­cies; Mumbai tops in ed­u­ca­tion

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