Whether you’re opening a new office due to rapid growth or replenishing your core workforce, getting the hiring process right is essential. The cost of getting it wrong cannot be overstated, particularly for businesses operating in highly scrutinised sectors such as financial services.
Whereas a good employee can stay with your company for years, progressing through the ranks and adding great value to your business, a bad hire can be a drain on your resources, time and energy—so it’s important to give yourself the best chance of getting it right. Background screening cannot guarantee that your next hire will be a high flyer, but it can help to ensure that your next hire is who they say they are and that they have the qualifications and experience they claim.
The real cost of bad hire
A report from the Recruitment and Employment Confederation (REC) reveals that 33 per cent believe that a hiring mistake costs their business nothing, when in reality, a bad hire with an annual salary of AED 213,734 can cost a business three times this (more than AED 671,735), due to the money wasted on training, lost productivity and increased staff turnover.
The consequences of a bad hire can also include reputational damage, additional recruitment costs and a low staff morale, all of which can have a lasting effect on the bottom line. Fortunately, there are steps that you can take to help mitigate the risk posed by a bad hire.
We’ve seen an increase in background screening in the Middle East in recent years, as more and more businesses are seeing it as a crucial part of the recruitment process. Many large multinationals already have a consistent company-wide background screening policy in place.
This means that any new employees joining the company in the Middle East will go through an equivalent level of screening to their American or British counterparts. Others, however, may only be screening domestic candidates in the region, which could be leaving their businesses open to risk.
SMEs in the Middle East are also seeing the benefits of having an international screening policy in place, not least because of the high population of expats working in the region. Figures released at the end of 2018 found that 91 per cent of the UAE workforce is made up of expats, as well as 75 per cent of the workers across the wider Gulf Cooperation Council (GCC).
A multinational workforce can offer many benefits, such as additional language skills, international experience and cultural diversity, but it also has its risks. You can help to mitigate these risks by screening all of your new hires consistently and proportionately before they start working for your company (and rescreening them periodically once they’ve joined).
Having a robust background screening programme in place for your entire workforce (including remote workers, contractors and interns) shows that as a business you are treating your candidates fairly and not discriminating based on where they are from or where they have previously worked or lived.
Early adopters of background screening
The background screening market in the Middle East is still developing, particularly when compared to countries like the US, where candidates expect to have a background cheque as part of the recruitment process.
From our experience, the sectors which have been adopting background screening the most in the Middle East (and the wider EMEA region) are banking and finance, technology and healthcare. Something that these industries have in common is that they all potentially carry a higher level of risk than most. For example, employees working in banking and finance organisations often have access to large amounts of sensitive personal and financial data and/or money which may be at a greater risk of fraud, or theft.
The fallout from the financial crisis means that financial institutions across the world are now expected to accept a level of accountability and responsibility for their hiring decisions. As a consequence, an increasing number are now implementing background screening as a way to reassure the public and mitigate their own business risk, even when it is not yet required by law.
Background screening in the financial service sector
In the UK, many roles in the financial services sector are regulated by the Financial Conduct Authority (FCA). This means that individuals applying for one of these regulated roles must undergo a thorough screening process including employment and education verifications, a criminal record check of, character references, a credit check, an identity check, and a regulated reference.
Whilst background screening within financial services isn’t yet regulated in the Middle East, the 2018 HireRight EMEA Financial Services Employment Screening Benchmark Report suggests that these companies could be missing out on some of the key benefits of background screening.
The report shows that t h e respondents from the finance and banking sectors consistently saw the benefits of background screening, with improved regulatory compliance (72 per cent), and more consistent safety and security (61 per cent) listed as the top perks of their screening programme.
Other benefits listed include a better quality of hire (24 per cent) and a better company reputation (22 per cent). It also found that across the Europe, Middle East and Africa (EMEA) region, 85 per cent of employers have seen candidates misrepresent information on their CVs or applications.
Furthermore, 31 per cent of financial services businesses have uncovered issues with senior-level screens—an area which can often go overlooked when it comes to pre-employment screening.
Recruitment at all job levels in the financial services sector in the Middle East can pose more risks than others in the region. With the cost of a bad hire being too high to ignore, it can be useful to ask yourself “what could a bad hire cost my business?” and “am I doing everything I can to mitigate my employment risk?” Background screening can help businesses to minimise the risk that each new hire can bring by verifying their credentials, experience and qualifications, to help make sure your next hire is an informed one, rather than a risky one.