Is Employee Verification not compatible with your Business Model?

India with its large pool of qualified work pool has become the premier outsourcing destination. In the start the outsourcing model presented a unique opportunity with large profit margins. However the large profit margins attracted more players and soon the profit margins began to dwindle. The outsourcing business model in India has come to the point where all extraneous expenses have to be bled out to ensure a decent profit. Most companies in an effort to offset increasing expenses, try to maintain a low paid staff.

The low paid employee model may perceive the employee verification process a wasted effort for the following reasons:

1. The focus is on finding low paid employees that meet minimal hiring qualifications
2. There already exists a likely tendency to overlook obvious discrepancies in the resume
3. Employee verification is considered as a unwarranted cost.

There seem to be obvious pit falls in the “save as much as possible through anyways possible” business ideology. First off the market awareness that a company does not conduct background checks is more likely to attract candidates that have something to hide or carry falsified educational or professional information. Such candidates if hired may provide less than optimal output, which overtly results in other employees having to contribute more and leads to faster employee burnout and dissatisfaction.

The hiring of an unverified employee may result in creation of a vicious fast-hiring-fast-firing circle leading to higher employee turnover. A high employee turnover not only has monetary implications but also results in dampening the morale of other employees.

If hiring a low cost workforce is your business model then so be it, low cost does not default to low quality, however a quality check in terms of a thorough employee background verification can ensure that you get the most bang for your buck. The advantages of employee verification are many but the key benefits would be as follows:

1. Statistically, employees that are hired after a thorough background check are likely to stick around longer.
2. Lower employee turnover implies more stability, less loss of knowledge base and more profits.
3. New hires perceive the presence of large number of long term employees as a positive aspect about the company

It is said that for the need of a nail…the war was lost, is this scenario true for your business? Think long term, act now and win the battle of the profits.