Retail Industry Combats Hiring Fraud by Adopting Identity Verification Technology
Joy Henry, Head of Technology and Business Services Industries, Sterling
Within the retail industry, employees serve as the public face of their brand. As a retail business, you want to hire authentic people who you trust to represent your brand effectively. This starts with hiring people who are who they claim to be.
Identity fraud in the workplace has risen exponentially since 2020, in part because it’s so difficult for hiring managers to detect without the time and resources to vet every candidate themselves. Employment has become a major attack vector especially via remote positions, as the FBI warned in its 2022 PSA on hiring fraud.
As incidents of identity fraud continue to pose a significant threat to all industries, retailers are increasingly implementing identity verification in the hiring process, before even running a background check or offering employment. This identity-first approach maintains a commitment to trust both among employees and the customers they serve. For many not already implementing these services, it’s on their roadmap. Sterling’s Retail Leadership Council polled over a dozen employers, finding that 67% of the council’s members plan to add identity verification to their candidate or employee screening.
Retailers’ adoption of identity verification services is helping employers to verify candidate identity at the start of the hiring process, protect against fraud, create safer workplaces, and hire confidently throughout the year with seasonal fluctuations and scale.
Hiring Fraud Spikes, Threatening to Impact Retail Employers
Verizon’s 2021 Data Breach Investigations Report (DBIR) revealed that 40% of data breaches involved personal data (such as names, phone numbers, and physical addresses). Retailers are especially vulnerable to this type of fraud, owing to high-volume hiring. Employers sourcing hybrid or remote workforces face additional risk, since hiring managers often can’t physically meet and personally vet candidates.
Employers often discover too late that their candidates aren’t actually who they claim to be. Worse yet, the fraud risk to businesses extends far beyond financial damage. The cost of a fraudulent or otherwise bad hire can directly threaten retail brand reputations and (potentially) customer safety.
Increasingly, retail employers need an effective but efficient way to avoid potential fraud by verifying candidate identity upfront in the hiring process, before extending candidates an offer to join the workforce and interact with customers.
Retail HR Investment Seeks to Minimize and Mitigate Risk
Contrary to many employers’ assumptions, identity is only rarely verified during background screening. In fact, three out of four HR professionals mistakenly believe (or are unsure) that identity is part of a background check, according to Sterling and HR.com’s 2022 Employee Identity Verification Research Report.
For this reason, a background check alone may not be sufficient to detect identity fraud, since they often depend on candidates manually entering accurate data (name, DOB, etc.). Meanwhile, intentional (or accidental) errors often go unnoticed, leading to inaccurate background check results.
Retail investment in identity technology aims to close a critical security gap present in many retail organizations.
Starting with Identity Verifies Candidate Identity Early
Of course, time-to-hire is still of prime importance for employers, and today’s hiring landscape requires more adaptable ways to run background screens, especially during seasonal hiring. In fact, Sterling’s “Hiring Reimagined” special report found that 80% of large retail companies are looking to reduce time-to-hire.
While it’s always paramount to reach hiring targets, retailers also need to do all they can to help protect brand reputation, and that starts with the face of their organization: their candidates.
Adding identity verification before a background check helps maintain the velocity of retail hiring by being easy to incorporate and use.
In fact, Sterling’s roundtable of retail businesses found that candidates can quickly and easily complete a new identity verification process in 90 seconds or less. Recent results from Sterling’s polled early identity technology adopters also uncovered an average of 45% more criminal results across 110K background checks when identity verification was completed as part of the hiring process.
Retailers are fighting the elevated risk of hiring fraud by adding identity verification services as a vital first step in the hiring process before each background check, helping to detect and avoid fraud before making a job offer. Digital identity services are an effective way for employers to vet candidate identity, strengthen pre-employment checks, and hire at scale and speed in 2024.
This originally appeared on BenefitsPro: https://www.benefitspro.com/2024/01/26/retail-industry-combats-hiring-fraud-by-adopting-identity-verification-technology/
Sterling is not a law firm. This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.
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