Graduate recruitment – do you really know who you’re employing?

 As the next generation of graduates prepares to enter the workforce, the pressure is on for HR to seek out the best recruits.  Competition for jobs will be fierce and graduates will fight hard to win the top jobs.  So how can HR mitigate the recruitment risks and be sure they are employing the best people?

Overview of the graduate job market

Clearly, the recession has had a profound impact on the graduate job market over the last two years, with vacancies falling by an unprecedented 23.3% between 2007 and 2009, according to the latest survey from High Fliers Research.  But, despite the lack of growth in graduate vacancies during this period, there has been no such decline in the graduating population with a record number of students expected to complete degrees in the summer of 2010.  As they prepare to join the tens of thousands of last year’s graduates still looking for work, competition for graduate jobs has never been fiercer.

Last year, the Association of Graduate Recruiters (AGR) reported that its member companies received an average of 49 applications for every graduate-level job. This year, they predict this ratio will be even higher, double in some cases.

But the outlook is not all bleak.  The graduate recruitment market is starting to show signs of recovery, with leading graduate recruiters increasing their recruitment targets in 2010 and optimistic about their graduate recruitment into 2011.  In this post-recession environment, organisations will look to toughen their graduate recruitment criteria in order to seek out the very best graduates and ensuring they have the appropriate tools and information on which to make the right recruitment decisions will be crucial.

Graduate recruitment risks

The recession has meant that employers now face a number of recruitment risks, such as a greater likelihood of falsehoods on CVs as people compete for jobs but also the tendency for more people to commit criminal acts such as employee fraud due to financial stress.  The implications for businesses of placing the wrong person in a position can be severe and have potentially high financial, legal and reputational consequences. 

So what are the challenges facing employers when it comes to graduate recruitment and what steps can they take to reduce exposure to these recruitment risks?

Social recruiting

Social networking sites have fundamentally changed the way in which organisations source potential candidates at all levels.  When it comes to engaging the digital natives – the next generation of workers – social media is now a critical recruitment tool.  But while social networking sites can be a great and cost effective way of sourcing and attracting potential recruits, employers should be aware that their existence also creates a greater risk of CV and career cloning.

In a survey last year, Experian found that 63% of professionals include career details in their personal profiles online and as many as one in 10 people now publish their whole CV on social networking sites such as LinkedIn, leaving themselves at risk of ‘career cloning.’ 

Background screening  candidates sourced in this way to validate identity and career history minimises the risks posed by CV fraudsters and should be the starting point in the recruitment process.

CV misrepresentation

With increasing numbers of candidates fabricating or exaggerating their CVs in order to stand out in a competitive market or in the most extreme case, to commit employee fraud against an organisation, finding ways to limit uncertainty in the hiring process has never been more important.

During 2009, Experian found that 8% of successful candidates were shown to have lied about their university qualifications, demonstrating the importance of carrying out education checking - a background screening tool specifically designed to verify student qualifications. 

Mind the gap

It’s not just qualifications that need to be checked, any gaps in the CV history should also be investigated.  For example, a ‘gap year’ could be used to hide a criminal conviction or perhaps a job where poor attendance or disciplinary action was recorded.  While organisations may not wish to appear to doubt the word of the candidate, the importance of criminal records checks as part of the overall assessment should not be overlooked and may highlight any gaps in the CV history.

Student debt

Debt is a big issue for graduates.  According to a survey last month, final year students believe they will leave university owing about £17,900, up from an average of £11,600 in 2008 (High Fliers, Annual Graduate Careers Survey).  The latest personal insolvency statistics from the Consumer Credit Counselling Service (CCCS) show an annual 31% increase in graduate bankruptcy, with historic highs expected in 2010 as graduates struggle with poor job prospects and reduced earning potential.

The financial pressure on graduates to secure employment together with the psychological stress of coping with debt means it pays to look closely at their financial history.  Financial background checks  can highlight any red flags, such as bankruptcies or other evidence of financial stress, which may provide valuable warning signs into a candidate’s character and suitability.  An individual’s performance can have a knock-on effect on the rest of a workforce, so employers should be aware of the impact that financial pressures may have on potential staff.  In the most extreme cases, financial pressure may make an employee more vulnerable to coercion or open to employee fraud as a way of improving their situation. 

Employee fraud

The possibility of hiring someone who may pose a direct criminal threat to your organisation may seem rare, but it is more common than many people realise.  According to CIFAS, the UK’s Fraud Prevention Service, the number of cases of ‘dishonest action by staff to obtain a benefit by theft or deception’ almost doubled in 2009 compared to 2008.  CIFAS also found that the average age of a staff fraudster involved in ‘unlawful obtaining or disclosure of personal data’ was just 26 years, suggesting that the young (and particularly those under significant financial pressure) may be more susceptible to coercion and less loyal to an employer due to the short length of service.

The raft of recent fraud reports and reviews suggest that the UK is heading for an unprecedented surge in fraud over the next two years, as businesses and individuals struggle to survive the economic downturn.  According to KPMG’s annual fraud barometer, the value of criminal frauds prosecuted in the courts reached a 13-year high of £1.1 billion last year but it’s feared the worst is yet to come.

In summary

Competition for graduate jobs is at its toughest for years.  The outlook for the class of 2010 doesn’t look good and they will need to work hard to find ways to stand out from the crowd.  From the employer’s point of view, a large talent pool to pick from represents a great opportunity to recruit the very best graduates.  The challenge facing graduate recruiters will be finding the right employee screening tools and techniques to effectively manage and mitigate risks in the recruitment process. 

Background screening checklist for graduate recruiters

A background screening policy can be an effective recruitment tool, particularly when recruiting for the graduate job market.  Pre employment checks provide detailed information and histories on potential candidates, arming the employer with known facts on which a final decision can be made. 

• Candidate identity checking should always be the starting point
• Always get the candidates consent
• Use background screening to deter timewasters or rogue candidates
• Use  education checking  to verify their qualifications
• Financial background  and criminal records checks can help uncover gaps in CV histories
• Using a third party can ensure compliance conditions are met

 

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