Employers put magnifying glass on recruits as employee fraud rises
- The global background check market size is expected to grow to reach US$3.415bn by the end of 2026.
- Demand for background check software is being propelled by growing instances of data fraud by employees of academic and corporate organisations.
- In Australia there is one report of cyber attack every 8 minutes with 67,500 cybercrime reports in 2020-21 totalling $33 billion in self-reported losses.
Employers are scrutinising recruits more than ever as self-reported company losses rise on the back of growing instances of data fraud by employees of academic and corporate organisations.
The global background check market size is expected to reach US$3.415 billion by the end of 2026, with a CAGR of 3.2% during 2021-2026. This is up from 2019, when it was valued at US$2.73 billion.
Employment background checks or screening services include a wide range of verification checks, such as employment eligibility verifications, contractor screening, drug and alcohol screening, sex offender checks, motor vehicle checks, and rental payment history.
The screening services and background checks sector is burgeoning amid growing instances of data fraud by employees of academic and corporate organisations.
According to an Australian Cyber Security Centre (ACSC) report, over the 2020–21 financial year, the ACSC received more than 67,500 cybercrime reports, an increase of nearly 13% from the previous financial year.
During that period the ACSC noted that self-reported losses from cybercrime totalled more than $33 billion.
The increase in volume of cybercrime reporting equates to one report of cyber attack every 8 minutes compared to one every 10 minutes last financial year.
In one example, a former Apple (NASDAQ:AAPL) employee has recently been charged with allegedly defrauding the tech behemoth out of more than US$10 million by taking kickbacks, stealing equipment, and laundering money.
The employee allegedly exploited their position to defraud Apple via several schemes, including causing the tech giant to pay for items and services it never received.
As such instances are on the rise, albeit generally at a much smaller scale, screening services and background check software is developing at a fast rate, allowing organisations to automate the selection phase for potential recruits, as well as volunteers, to capture and store information for future use.
These solutions are predominantly used in academic and commercial organisations to monitor drug tests and criminal records but they are now being expanded to capture a raft of other data related to recruits that can help in the vetting process.
Regardless of when industry a company is, employee fraud can affect not only revenue and therefore market share, but the actual survival of the business.
Key players in the sector include Checkr, GoodHire, HireRight, Kroll, Orange Tree Employment Screening, PeopleConnect, TazWorks, and TruthFinder.
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