The Financial Express
MumbaiApril 29, 2006

In March 2006, some leading IT services companies in India such as Wipro Technologies (Wipro) and IBM India dismissed several employees, when they discovered that the information provided in the employees’ curriculum vitaes (CVs) was false. The companies also blamed some of the recruitment agencies which had recruited the dismissed employees, for helping them fake their CVs.

Police complaints were lodged against some of these recruitment agencies, and they were even asked to refund the expenditure incurred by the companies in hiring the dismissed employees. These charges and allegations highlighted the growing problem of fake CVs in the Indian job market. The phenomenon of fake CVs was not just restricted to the software industry. It was also prevalent in other sectors like ITeS, financial services, retail etc. It was estimated that Rs 400 crore was spent by Indian companies for filling 200,000 jobs a year in these sectors and 10%-12% of the selected candidates had submitted false information in their CVs. However, the extent of falsification was believed to be much higher in the IT and ITeS sectors as they accounted for 50% of the 200,000 jobs and were highly attractive to job seekers due to their high salary packages and other benefits.

The main areas for falsification were work experience, expertise and skills, educational qualifications, and previous salary packages. It was reported that in many cases the falsification of the CVs was done with active collaboration of recruitment agencies and at times even with the knowledge and connivance of the company’s recruitment managers.

The boom in the Indian job market had resulted in the growth of the recruitment industry and it was reported that 1,500 new recruitment agencies were set up since 2004 to cater to the growing demand. As a consequence of the rapid growth of the industry, the credentials and capabilities of these agencies varied widely. The issue of fake CVs highlighted concerns regarding the professional practices and ethics of recruitment agencies.

Industries which used the services of these agencies were concerned about the negative perceptions the issue might create with customers based in foreign countries. They felt that this problem, if unchecked, could negate India’s status as a favourable destination for outsourcing of software and BPO services.

The Executive Recruiters Association (ERA), the association of the Indian recruitment industry, expressed its regrets on this issue and promised strict action against the erring member agencies. ERA said that it had a well defined code of ethics and principles to guide its member agencies and their recruitment consultants. ERA also asked company recruiters to avail the services of reputed recruitment agencies instead of lesser known agencies as the monitoring of their work quality would be difficult.

However, the whole issue created serious problems for the HR managers in the affected companies.

On the one hand, they had to quickly recruit large numbers of qualified and competent people to meet the demands of growth. On the other hand, they faced the prospect of higher costs and longer lead times for recruitment, if they were to resort to background checks and verification of CVs for all their new recruits.

Dr Bindi Mehta, Professor, Nmims, Mumbai
The case of fake CVs in the Indian job market raises three pertinent issues: when job opportunities in the IT and ITeS are increasing rapidly, it is quite understandable that many recruitment agencies have come up in the last one/two years. Not all are likely to survive. There is bound to be a shake up and only the good ones, value-driven agencies will do well. But in the mean time, the Executive Recruiters Association (ERA), which is in a way a self-regulatory organisation (SRO), must perform its role of overseeing the functioning of its members.

ERA already has a well-defined code of ethics and conduct for its member agencies and recruiters. It should make all attempts to ensure compliance with the code of ethics/conduct. If any self-regulatory organisation -- an industry association (like AMFI, CII etc) or a professional body (like ICAI, ICSI etc) — does not take their responsibilities seriously, regulator or the government will have to step in, as it has happened in the past in India and abroad.

But how exactly the ERA can ensure that members follow the code of conduct and whether and what disciplinary action it can take is to be seen. In the case under discussion, HR managers in IT and ITeS companies did face the challenge of recruiting quickly in large numbers, to undertake the increasing volume and diversity of assignments as also the tight deadlines under which software and BPO companies are expected to work.

But they should have kept the long-term perspective in view. Even if it takes some time to check the credentials and the background of the people being recruited, the time would have been worth spent. This is because the potential damage that dismissing people after having recruited them can cause is very high both in terms of negative perceptions and possible loss of business opportunities from foreign countries in terms of BPO business.

This is especially true when India competes with many other low-cost destinations like Philippines for business process outsourcing opportunities and business. The social responsibility of business extends to companies and suppliers of goods and/ or services. While fast-growing companies like Wipro and the like are outsourcing some of their services, in this particular case recruitment, which is a core HR function, ensuring the quality of the service is squarely the responsibility of the IT/ITeS/software company that is oursourcing the service.

The company providing the software or business process outsourcing services to foreign clients cannot wash its hands off by blaming the recruitment agencies.

Chiranjit Banerjee, General Partner, Peopleplus Consulting
The menace of fake CVs was first identified when professional screening firms like Quest Research First Advantage and to a lesser extent, Hill & Associates, launched their pre-employment screening services in India in 2001-2002.

MNC tech companies were the early adapters to this outsourced process in line with their stringent screening policies that prevail in their home countries. The bigger Indian tech companies were slow to respond (probably due to cost issues) but eventually they did, bowing to the mounting pressure from their North American clients.

Given, however, the limited abilities of screening companies, technical skills cannot be evaluated. All that they do is to do a verification of dates of employment and positions held as well as the authenticity of educational degrees.

At times, they also work with the local police to establish if the potential candidate has a criminal history or not. The police are not known to be cooperative though and often charge exorbitant fees.

The technical ability of the potential candidate is left to be judged by the recruiting company. This is where dishonest staffing firms come into play. Sometimes, they doctor CVs to meet the demands of the hiring clients and on some occasions, they connive with employees within the hiring firm to do the same.

The larger tech companies are more vulnerable to the menace of fake CVs owing to their ramping up pressures. In the context of their larger demand for candidates, they end up working with several staffing firms which tends to dilute quality. The smaller ones simply cannot afford to screen.

The other aspect of this alarming phenomenon is the questionable integrity levels of some hiring managers within the client companies.

It is an open secret that many HR managers (especially in Bangalore, Hyderabad and Gurgaon) own ‘‘benami’’ firms through which CVs are routed.

Still some others use ‘‘favoured’’ staffing firms where the fees are shared between the firm and the hiring manager(s). Most staffing firms are not members of ERA and therefore they cannot be regulated by this body. Besides, the ERA does not have the teeth to discipline its own members. NASSCOM along with NSDL is reportedly building a database of tech workers but there is no compulsion on the part of the individual to enrol.

It is quite possible that the ‘‘rotten eggs’’ will consciously choose to stay outside this database. Convergys fired its entire HR team last year but it is believed that all the disengaged individuals found new jobs in next to no time.

Tech companies need to look within if they are really serious about expunging this demon from their system.