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India -Employment fraud on the rise: EY Study calls for tech-enabled vigilance in hiring amidst risi
According to an EY study titled ‘The First Firewall: Background checks as India Inc.’s frontline defense’, employment frauds have surged significantly over the last year. In cases of fraud, most offenders were experienced professionals: 96% in healthcare, 88% in financial services, and 79% in IT/ITeS had already spent a few years in the workforce. The study is based on an analysis of over 1 million background pre-employment screening conducted across more than 90 mid- to large-sized organizations.
As technology permeates every aspect of our lives, the risks that come with it are evolving equally rapidly. From resume fraud and submission of fake job documents to dual employment, and the use of deepfakes for virtual interviews—digital hiring risks are challenging HR professionals to find ways to maintain workforce integrity while hiring talent.
Arpinder Singh, Global Markets and India Leader, Forensic and Integrity Services, EY said, “Employment fraud has been a longstanding menace in India. To tackle this, today, employee background checks have become a non-negotiable across sectors. As we rapidly adopt technology in the workplace, the risks associated with it are evolving equally fast. HR professionals are struggling to keep up with the changing landscape of hiring frauds in India. While technology poses challenges, it is also the solution to this issue. Technology-led background verification solutions help organisations with insightful and accurate reports for better decision making and significantly reduced turnaround time.”
Employment fraud detection in healthcare: 83% fail background checks, 13% linked to education discrepancies
As a leading destination for medical tourism, India attracts large numbers of health travellers, annually. However, the country’s healthcare sector has been grappling with a talent shortage. In response to the increasing demand for professionals, fraudulent candidates are resorting to unethical ways to get hired. Of the candidates with discrepant profiles, 83% failed to comply with employment checks and 13% had education check-related issues. Fake document submission by candidates has been the biggest challenge in this sector.
Alarmingly, 75% of such candidates submitted fake employment documents while 30% fake experience letters mentioned being employed by 10 of the largest healthcare facilities in India to make their profiles appear stronger. 84% of such candidates submitted certificates from institutes that were not accredited/ approved by the government.
The report also revealed that many large healthcare providers do not conduct criminal background checks as a regular hiring practice.
Amit Rahane, Partner, Forensic and Integrity Services, EY said "Validating the licences of healthcare professionals is essential to reduce clinical errors. In financial services, ensuring employee integrity protects confidential data. In today’s rapidly evolving IT industry, background verification is vital for building a reliable team. These practices help organizations thrive by upholding core values, maintaining ethical standards, and making informed hiring decisions."
84% of job check discrepancies in Financial Services tied to candidate misinformation
The financial services sector typically conducts more rigorous background checks compared to other sectors, since they are responsible for managing monetary assets and confidential information. These checks encompass various aspects, such as verification of previous employment, educational credentials, and criminal backgrounds. Automating background checks is becoming a common practice in the sector.
Among the 6% discrepant profiles in the sector, 71% were highlighted during employment checks, 18% failed civil and criminal checks, 11% had gaps in their educational qualifications while the rest were found to be discrepant during credit score checks.
Notably, 5% of discrepancies in employment checks were attributed to candidates submitting forged documents. Salary proofs and reflecting inflated compensation emerged as the most forged documents. In certain cases, candidates were discovered to have records of parallel employment or had left previous jobs without completing their notice periods.
A significant 84% of discrepant employment checks stemmed from misleading information shared by candidates that emerged during checks. Using tools for employment verification, several instances were noted where candidates remained employed with their previous organisations while some also had records of hidden employment which were revealed during background checks.
Among the candidates who failed education checks, 50% submitted fake degrees, with universities later confirming that the candidate was not listed in their records. The remaining 50% submitted degrees from institutions that were not accredited/ approved by the government. Additionally, some candidates were also found to be involved in criminal or civil court cases.
Vivek Aggarwal, Partner, Forensic and Integrity Services, EY said, “The risk landscape is shifting—and CHROs are at the forefront of managing its complexities. In this environment, adopting a strategic approach to risk management is crucial. Leveraging technology to detect and address these risks, including advanced tools to identify anomalies in documents, prioritizing employment background checks, and developing comprehensive policies are essential steps for success."
Swift background checks crucial for India’s IT/ITeS sector: 45% found moonlighting
While the country’s IT sector is progressing towards innovation, it is not devoid of frauds. The rapid growth in this sector has led to an increase in hiring, making swift background verification in India more critical than ever. The prevalence of dual employment and moonlighting, fuelled by the hybrid work model and remote hiring, poses significant confidentiality risks.
Among the discrepant profiles highlighted, 85% were due to employment checks, 6% failed other database checks, 5% had discrepant educational claims which was highlighted using forged degree verification and 3% had pending civil or criminal cases against them.
Surprisingly, during background verification for IT sector, 32% candidates submitted fake documents from companies that didn’t exist or where the employer denied issuing the documents. The non-existence of these companies was confirmed during site visits. Furthermore, 45% candidates were found to be moonlighting either through leveraging tools for dual employment check or having active GST registrations associated with their PAN.
The prevalence of fraud in hiring process has risen to concerning levels and is currently posing a big risk to most sectors. Falsified documents are inexpensive, easy to procure and can be generated in a very short span of time. As businesses navigate the complexities of the modern workforce, it is important to understand the relevance of tech in recruitment and adopt digital verification process as one of the most crucial HR compliance tools.
Notes to Editors
EY is building a better working world by creating new value for clients, people, society and the planet, while building trust in capital markets. Enabled by data, AI and advanced technology, EY teams help clients shape the future with confidence and develop answers for the most pressing issues of today and tomorrow. EY teams work across a full spectrum of services in assurance, consulting, tax, strategy and transactions. Fuelled by sector insights, a globally connected, multi-disciplinary network and diverse ecosystem partners, EY teams can provide services in more than 150 countries and territories.
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About EY Forensic & Integrity Services
Embedding integrity into an organization’s strategic vision and day-to-day operations is critical when managing complex issues of fraud, regulatory compliance, investigations and business disputes. More than 4,000 EY forensic and technology professionals help leaders balance business objectives and risks, build data-centric ethics and compliance programs, and ultimately develop a culture of integrity. EY teams consider your distinct circumstances and needs to assemble the right multidisciplinary and culturally aligned professionals for you and your legal advisors. They strive to bring you the benefits of leading EY technology, deep subject-matter knowledge and broad global sector experience.
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