Combatting fraud in the hiring process

Danny King, CEO of Accredible, warns desperate HR leaders about long-term effects of choosing the wrong person

With such a competitive labor market, HR leaders are scrambling to fill gaps in their workforce by any means necessary.

They’ll even sacrifice their due diligence on applicants and candidates just to put a warm body in a vacant position. That can come back to haunt them, ultimately impacting the bottom line.

In this interview with HRD TV, Danny King, CEO of Accredible, shares his strategy for hiring people with the necessary skills, credentials and experience.

To view full transcript, please click here

John: [00:00:18] Welcome to HRDTV. I'm John Corrigan with HRD America. And today, I'm joined by Danny King, CEO of Accredible, a digital credentialing platform provider in Silicon Valley. We will be discussing a major issue for recruiters, rampant fraud in the hiring process. Danny, thanks for joining me. How are you?

Danny: [00:00:38] Very well, John. Thanks for having me on.

John: [00:00:40] Let's get right into this because it is a hot topic. Are more applicants lying on their resume than ever before?

Danny: [00:00:48] Yeah, I mean, it's an interesting question. I think the short answer is probably yes for a couple of reasons. First and foremost, more and more people are taking more and more sort of niche credentials where I think there's less employer sort of awareness of what they are and what they mean. And some of these in fact, I'd say the great majority are really, really useful credentials that really helpful. There's genuine learning going on there. There are some, though, of course, that are not so great. And so I think it's very, very hard for employers to sort of keep up with just the magnitude, the number of them. There is a statistic I would point out, though, that sort of is quite eye opening. So there's a company called ADP. Many people are probably very familiar with them. It's the largest payroll processing company in the world. I think they handle a sixth of all Americans payroll. It's a big, big company. But they also have a background checking arm and they get about sort of two and a half million background checks through, you know, through this sort of side company every year. And what's interesting is something like twice a decade, they released these reports about what they see in these in these background checks. And so, for example, three sound bites that I remember was in recent sort of year, all of about 2.6 million background checks that were submitted for scrutiny. 41% of resumes were found to have a lie about their education. 44% were found to have an exaggeration or a lie about the work history. But for me, most alarmingly, 23% had a falsified credential on it. So I don't know about you, John, but that's sort of an order of magnitude or maybe maybe even two orders of magnitude more than I think most people would expect. So I think that fraud is relatively rampant. And because more people are taking more education, surely the numbers are therefore increasing.

John: [00:02:27] So I guess the question is, what do HR leaders do about it for how can they ensure that they're hiring people that have the proper credentials, the proper experience, the proper background?

Danny: [00:02:37] Yeah. I mean, you know, we talk to a lot of folks about this, you know, both on the sort of validation of credentials side and also, of course, the issuers of these credentials. And, you know, we've asked similar questions. And I think first, it's probably helpful to point out why on earth are these numbers so high? Well, I think there's a few reasons. Number one is I do not believe that there's that much awareness about how high these levels are. I think most people expect that actually maybe it's a fraction of a percent. We're not taking that big of a risk if we actually don't verify all these credentials as thoroughly as we perhaps could. So the the first answer to your question would be, I think it is worth spending the time to go out there and verify the credentials that people are putting in front of you. Now, for some like university credentials, it should be relatively straightforward. Either you're already using a background checking firm, like maybe good hire or some other firm like that and they can do it for you. But for the more sort of niche credentials, it is worth just reaching out to the company that issued the credential and just sort of saying, Hey, can you verify this? Often on their website they'll have a simple verification tool. Now, if you're receiving digital credentials, there's often a little button right on the credential that you can click verify. So that's number one, is awareness is quite low, I think, of the issue and therefore just taking that step really, really helps. The other side of things as well is I think that people get frustrated about how difficult it is to verify credentials and how expensive it is. It depends on the organization, but often you literally have to call a human and talk with the person to check someone's credential. It takes a long time. You know, you have to carve that time only a day. Often they can't verify it right there. And then so they have to get back to you. It's often quite expensive to verify some degrees it can be around $50. Sometimes it's cheaper, sometimes it's more. So I think there is a sort of barrier there as well. So anything that we can do as an industry to make that easier on HR professionals, I think that should very much be done.

John: [00:04:22] Now one of the ways to make that easier is through blockchain technology, correct?

Danny: [00:04:28] Well, that's right. Yeah. And so, you know, my company is credible. You know, we for context, we've issued about 55 0 million credentials on behalf of about 1800 sort of well known institutions. So some of these are universities like MIT or Harvard or Oxford or Cambridge or NYU, Kaplan, Purdue. Some of them are associations, you know, think the CFP board or Tripoli or many other of the big sort of prestigious associations. And a lot of them are sort of smaller and less well known credentials. Perhaps many people don't know that Google, one of the biggest credential issues in the world, and we do a lot of credentialing for them. Also things like Docker and New Relic and Marketo and Intercom. And so the first thing I would say is, yeah, blockchain can be really, really helpful. And in fact, of the 50 million credentials that we've issued, about 75% of those our customers have chosen to add a verification blockchain step. So happy to walk you through sort of how that works. But the short version of this is when you click that verification button, it just increases the barrier to fraud so much that essentially it makes it intractable to get away with claiming that you have either a credential that you shouldn't have or more realistically, often it's that a credential is expired is no longer valid when it used to be.

John: [00:05:41] So would you recommend then for HR leaders that are trying to cure this, this this major issue that they, you know, rely upon a service that would have blockchain technology?

Danny: [00:05:50] Well, I'm not sure. I would say, look, treat the blockchain. Verification is the only thing that will save you. I don't think it's a silver bullet. I think it can go a very, very long way. Here's what the blockchain verification process can do for you. If you click that button and it's a reputable organization, you understand the organization has issued the credential. The blockchain verification makes it essentially impossible for people to falsely claim they have earned that credential from that institution. What it doesn't do is if you don't sort of understand what is this institution, what went into earning this credential, you know, how is it still valid or did it expire? You know, questions like that, you need to sort of then take the extra step, not just to verifying the statement is correct, but then you sort of trust and understand what it is this credential represents. So more than just the blockchain. You know, one of the things that we help our customers do is issue their credentials digitally instead of, you know, maybe my customers say MIT, instead of giving you a piece of paper as your credential that you can evaluate, you also get instead a URL. And that URL is a credential. And on there, of course, you can click verify and that goes through a blockchain based verification check. But you can also scroll down and see things like what was the syllabus required to earn this credential, What were the testing criteria, what were the particular skills that we verified that we now claim this person has? And then if you don't know what the organization is, who are we? How can you find out more about us? So the blockchain verification piece is only one part of that, and it eliminates that crucial 23% of fraudulent credentials that we're seeing in these background checks. But it doesn't it doesn't go one step further and say, and this is what the person can. You still would need to sort of gain the confidence from the organization to sort of make that judgment call.

John: [00:07:31] Well, I think that everyone watching here, at least they have an idea of how to take the first step to combating fraud, especially in the hiring process. So, Danny, I really appreciate you taking the time for breaking this down for all of us.

Danny: [00:07:43] Happy to help. Thank you so much.

John: [00:07:46] And thank you, everyone, for watching. This has been another episode of HRD TV.