Why Organizations Shouldn’t Skip Background Checks on Their Prospective Employees

This publication is authored by and reflected the views and opinion of PT Integrity Indonesia. More information about PT Integrity Indonesia is available on www.integrity-indonesia.com


How do you know if the candidate you offered a position to is the right one? They may have shown you an appealing resume and diploma, but how can you be sure that they are who they say they are? Is the diploma authentic? Did they really perform well in the past?

It is essential to maintain a healthy dose of skepticism throughout the recruitment process and to reinforce that skepticism with background checks. Employees are invaluable assets because they are the face of the company to the outside world—to clients, partners, and consumers alike. One bad apple can cause adverse ripple effects on the organization, from lowering morale to undermining productivity and a decreased bottom line. The organization’s reputation, which took blood, sweat, tears, and probably a great deal of funds over the years to build can be undermined in an instant.

A study revealed that 43% of organizations that fell victim to occupational fraud did not run background checks on the perpetrators prior to hiring. 

Hence, organizations are urged to invest time, money, and effort to delve into candidates’ backgrounds. Background checks provide comprehensive, accurate, and essential information about prospective employees.

With comprehensive information at their disposal, organizations can make informed decisions. This can keep organizations from costly bad hires.


The evolving era: digital technology and the pandemic

Increased global connectivity enabled by evolving digital technology has led to a rise in the employment of remote employees in both permanent and temporary capacities.

The pandemic has catalyzed this phenomenon, turning it into a new norm. Large-scale social distancing has changed the way people do businessworking from home on a full-time, hybrid, or ad hoc basis.

On the one hand, the new norm presents remote employees and freelancers with a more significant role for organizations. It provides the organizations themselves with a range of benefits, such as access to a larger pool of talent, better employee retention, lower overhead costs, etc. On the other hand, it puts organizations at more risk.

Ride-hailing drivers, package and food delivery personnel, freelance writers, etc. are the organizations’ assets. If even one of them misbehaves with consumers, the reputation of the company is at stake.

Given this situation, background checks have become a growing necessity.

The costly risks

Various checks are carried out in the background screening process, which can be tailored to the needs of organizations depending on the industry and position level. Basic checks, such as identity verification, diploma verification,  and criminal checks, are a few that are generally carried out for all levels.

However, for positions that are strategic or C-level, organizations need to tailor comprehensive and in-depth background checks, which can include competency credential checks, bankruptcy checks, reference checks, in-depth media checks, Politically Exposed Person (PEP) checks, and even drug testing.

Basically, the greater the authority of a position, the deeper the background check that is required. The risks of lax background checks at the C-level are no joke.

In the case of Adam Rapoport, the former editor-in-chief of Bon Appetit magazine, an in-depth media check may have turned up racially insensitive posts on social media. These old posts came to light following the accusation of his preferential treatment toward certain employees on the Bon Appetit team.

Long story short, this toxicity sparked outrage among print and digital subscribers, as well as current and former employees of the magazine's parent company, Conde Nast. Rapoport quit the magazine in 2020, as did other employees at all levels.

However, the damage was done. The magazine lost almost 10,000 print subscribers, its monthly subscription rate dropped by 300%, and the number of people who watched its videos each month dropped by 36%.


How background checks are carried out

Depending on the necessity, organizations may do background checks via their internal HR, in partnership with third parties, or both. Since it involves the gathering and processing of prospective employees' personal data, background checks must comply with the applicable legal framework.

In particular, Indonesia's Personal Data Protection Bill (PDP), which was enacted by the Indonesian Parliament on September 20, 2022, makes Indonesia the fifth Southeast Asian nation to establish a legal framework for personal data protection.

Some of the concepts regulated in the PDP law refer to the GDPR—a consent letter is one of the concepts. According to Article 24, organizations must obtain a consent letter from prospective employees before performing background checks.

In addition, data retention is also regulated by this law. Article 16 regarding the Processing of Personal Data Paragraph 2 (g) states that Personal Data must be destroyed and/or deleted after the retention period ends.

There is a saying that goes, “Those who do not cut corners will reap the benefits”. Conducting comprehensive, thorough, and compliant background checks can be a rewarding investment and can potentially prevent substantial losses.



This publication is authored by and reflected the views and opinion of PT Integrity Indonesia. More information about PT Integrity Indonesia is available on www.integrity-indonesia.com