Resume Fraud in Today’s Tech Driven World and How to Avoid It  

We all know that in today’s dynamic, technology driven economy, employees are a company’s greatest asset.  But while technology helps companies recruit from a broader candidate base, the resulting competition compels many candidates to lie on their resume to stand out among the crowd.  The advances in technology have also allowed candidates to become more sophisticated in committing resume fraud.  In this article we examine three advanced tactics HR professionals should be aware of to avoid hiring underqualified or untruthful candidates.

Given the competition candidates face, it should come as no surprise that over half (56%) of hiring managers have found outright lies on resumes.  Hiring underqualified employees often leads to turnover, which can cost tens of thousands of dollars to 1.5-2.0x annual salary according to a study by Deloitte.  Improper vetting has very real economic consequences.

The most common forms of resume fraud relate to education and employment history, especially prior titles and duration of employment.  Below are three tactics that candidates use and practical solutions.

1. Diploma Mills

   Diploma mills are fake institutions that sell (and often verify) fake degrees.  A google search can result in one of the 800+ diploma mills in the United States.  Many have official sounding names such as California Pacific University and Darthmouth College (not to be confused with Dartmouth College in New Hampshire).  Candidates can receive unaccredited “degrees”, such as a school principal who resigned for having questionable credentials.

   What can employers do?

   Employers should include education verifications as a standard component of most background checks.  However, employers should ask their background check provider if they check lists of accredited institutions instead of simply confirming a degree from a diploma mill.  The issue is so pervasive that the Federal Trade Commission’s has a site devoted to the topic.

2. Self-Employment Trap

   According to the U.S. Bureau of Labor Statistics, approximately 10% of the U.S. workforce is self-employed.  Unfortunately, candidates can use self-employment as cover for long stretches of unemployment or for work that was never performed.  In certain industries, such as technology, self-employed candidates are common.  But without an employer to call to verify work history, many companies are left to trust the candidate about their experience.

   What can employers do?

   Two options are 1) Reference checks and/or 2) IRS transcripts.  Reference checks with former clients can confirm a candidate’s experience.  However, references are usually provided by candidates and they typically pick individuals who will speak positively about them.  For a higher degree of certainty, some background check providers can obtain W-2/1099 transcripts directly from the IRS.  This allows companies to confirm gainful employment through an independent 3^rd party.  Usually, these transcripts will name the issuers and amounts of W-2’s and 1099s as reported by the candidate in their tax return.

3. Phantom Companies and Fake W-2s

   Many candidates without proper employment history will list phantom or bankrupt companies as prior employers.  Verifying employment history in these situations is difficult since the Company is no longer in existence.  These candidates will often produce a prior W-2 to prove employment.  HR should be aware that candidates can easily make fake W-2s or find vendors online who will do it for them.  The picture below was taken from a website that offers customized W-2’s for $75.

   

   What can employers do?

   Employers can find entity names and filing statuses on a state’s Secretary of State website.  To confirm W-2 or 1099 information, ask your background check provider about IRS transcripts mentioned above where confirmation can be obtained directly from the IRS.

The majority of candidates will be truthful during the interview process.  However, the cost of employee turnover and the other potential risks make confirming credentials an economic no-brainer.  Also, those who commit resume fraud are often more apt to be untruthful when employed, compromising a company’s employee base.  HR must make sure that it keeps up with the technologies and tactics to maintain the integrity of their organization.