2015 Annual Screening Report

2015 Annual Screening Report Insights & Advice Employee Background Screening in South Africa 2015.

Table of Contents Report Introduction 3 Criminal Record Checks (AFIS) 4 Fraud Checks (SAFPS) 6 Credit Checking 7 ID Verification 8 Qualification Verification 9 Psychometric& Competency Based Assessment 10 Global Screening 11 2015 Top Report Findings 12 Copyright Copyright 2016 EMPS (Pty) Ltd. All other trademarks are the property of their respective owners. Reproduction and distribution of this publication in any form without prior written permission is prohibited. EMPS (Pty) Ltd prepared these materials for information purposes only. These materials are not suitable for, and should not be construed as, legal advice. EMPS Annual Screening Report 2015 2

Report Introduction Established in 1981, EMPS is South Africa s oldest premier screening and vetting company. EMPS offers a full range of solutions to ensure that our clients employ the right person for the job. Annually, EMPS releases an Annual Screening Report. This 2015 Annual Employment Screening Report highlights statistics, trends and insights into the employee background checks and brings you best practice and advice that is integral for both recruitment and human resources professionals making critical hiring decisions. This report is an analysis of all checks conducted by EMPS from January 2015 to December 2015. The results of this report strongly confirm that background checks remain a crucial component of the hiring process, helping to protect employers, their employees and their customers. Screening job candidates before you hire them is extremely important for a number of reasons. In order to prevent the potential for negligent hiring lawsuits, crime in the workplace, and workplace violence, employment background checks are a vital step in the hiring process. For more information email info@emps.co.za EMPS Annual Screening Report 2015 3

Criminal Record Checks(AFIS) Applicants With A Criminal Record 2015 18% 17% 16% 15% 14% 13% 12% 11% 10% 9% 8% 11,00% 11,50% 10,70% 11,80% 11,80% 2011 2012 2013 2014 2015 Top 80% of Criminal Records 2015 2015 Industry Highlights 17,54% -Meter taxi 14,38% - Merchandising 13,66% - Government 13,22% -Courier 12,80% - Parastatal 9,77% 9,02% - Overall average -Retail -Cleaning Theft Assault Road Traffice Offences Drugs and drug related offences Driving under the influence Malicious damage to property Housebreaking Fraud 7% 3,40% 3,30% 3,20% 10% 11,50% 21% 20% 0% 5% 10% 15% 20% 25% EMPS Annual Screening Report 2015 4

Criminal Record Checks(AFIS) Repeat Offenders 2015 1 Offence; 64% 2 Offences; 19% 3 Offences; 7,6% 4 Offences; 3,4% 5 Offences; 2% 6 Offences; 1,4% 7 or more; 2,6% For the 3 rd year running over 35% of applicants have more than 1 criminal record AFIS criminal record checks take 24-48 hours for an initial result which can be a clear result or a possible record result. If an individual has a possible record, the detailed report then takes a further 4-8 weeks. However in 3,83% of cases in 2015, the result came back with no criminal record. EMPS advises clients to wait for the final outcome before making a decision. Possible Illicit Activity Checks 2015 No criminal record; 3,83% Criminal Record; 96,17% Further, if an applicant has a criminal record it does not mean that they should be declined a job. We advise clients to look at the record and decide if it is relevant to the position applied for. The client should also take into account how old the record is. EMPS Annual Screening Report 2015 5

Fraud Check (SAFPS) of job applicants screened in 2015 are listed with the South African Fraud Prevention Service for committing a FRAUD. Up 0,5% from 2014 South Africa has the highest fraud rate globally, with one in three South African businesses experiencing economic crime. While the global average is at 37%, South Africa s economic fraud rate clocks in at 69% according to Sarel Snyman, a certified fraud examiner. These frightening statistics indicate that security measures need to be a top priority, WHY DO A FRAUD CHECK IF YOU ALREADY DOING A CRIMINAL RECORD CHECK? Generally the types of fraud that are listed on the SAFPS database are not prosecuted criminally as it happens too often and it is too much of a process for the company against whom the fraud has been committed. The South African Fraud Prevention Services database houses shared data from SA businesses who are members and data includes; Credit application fraud Internet fraud False name and ID Credit card fraud Forged documents Insurance Fraud Employment application/ CV fraud EMPS Annual Screening Report 2015 6

Credit Checking More than 15% of job applicants screened in 2015 had a negative credit listing. Negative Credit Records by Bureau 2015 20% 10% 15,75% 16,23% 12,63% 13,64% 0% Transunion Experian XDS Compuscan Companies are moving to a multi-bureau credit check in order to mitigate their risk even further as the data differs from bureau to bureau. Application: A credit check must be relevant to the position for which the person is applying. Transparency: The results of any credit check performed MUST be shared with the job applicant/ person checked. In addition, the person must be informed of the reasons, if any, of the consequences of a credit check. Permission; The candidate MUST be informed of the intention to perform the check, the reasons for performing the check; and MUST give you permission, at this stage in writing, to perform the credit check. The National Credit Act Amendment 19 of 2014 (NCAA) which came into effect on 13 March 2015 stipulates a consumer credit record may only be accessed by an employment agency, recruitment consultant, staffing company or employer when: They certify that the request for consumer credit information relates to a position requiring honesty in the handling of cash or finances There is a job description in place that stipulates the requirement of trust and honesty in the handling of cash or finances Specific and informed consent of the consumer is obtained prior to the request being made. EMPS Annual Screening Report 2015 7

ID Verification Reasons for unverified ID documents ID verified but not surname 0,04% ID never issued 0,07% ID not yet verified 3,21% ID verified as deceased 0,04% Surname does not match ID 5,81% 0% 1% 2% 3% 4% 5% 6% SMART ID CARDS SET TO REDUCE FRAUD; The new smart ID cards being rolled out by the Department will bring new levels of security to South African identity documentation. The cards are secured using PKI digital certificates, and the chip in each contains sufficient space to allow for the storage of identity information, driver's licence details, and other information relevant to state services. The secure cards will ensure that citizens can vote securely (and eliminate election fraud), and help protect social grants. http://www.itweb.co.za/index.php?option=com_content&view=article&id=70399 The process of ID verification is one of confirming that the name, surname and ID number are a match according to home affairs data. The process does not confirm that the photo is in fact the correct photo for that ID number. We hope that this additional feature will be available in the near future. EMPS Annual Screening Report 2015 8

Qualification Verification Overall Academic SA- Masters Academic SA- Doctorate Academic SA- Honours Academic SA- Degree Professional Association Membership SA POST 1992 Matric- Umalusi Academic SA- Diploma Trade Certificate Verification Academic Global Academic SA- Certificate PRE 1992 Matric- DOE 12,34% 8,43% 9,84% 10,19% 10,02% 5,88% 9,70% 3,48% 1,0% 0,0% 0,4% 0,7% 6,8% 4,8% 14,56% 1,8% 15,96% 1,9% 19,02% 18,78% 19,48% 1,6% 2,9% 4,8% 0% 5% 10% 15% 20% 25% 30% Negative result Fraudulent result In 2015 we saw some of the first cases in the history of South Africa where individuals were prosecuted criminally for misrepresenting their qualifications. The value of supporting documents; the process of certificate and qualification verification has evolved rapidly over the past number of years. With the increase in CV fraud and more specifically qualification fraud, institutions are becoming more and more prescriptive in their verification processes and require copy certificates more regularly. A well co-ordinated recruitment process should request all applicants supporting documents upfront, in order to speed up and ensure efficient verification. These documents include consent to perform the screening checks required, all copy certificates-certified, certified copy of applicants ID and drivers licence. EMPS Annual Screening Report 2015 9

Psychometric and Competency Based Assessment 86% of business leaders know that their organisations future depends on the effectiveness of their leadership pipelines. Only13% are confident in their plans. Psychometrics and Competency Assessments are going through an historically exciting period of Development. Usage is increasing globally, giving us access to new approaches to human measurement. The use of assessments in pre-employment screening to assess aptitude, honesty, personality, leadership, etc. is not only valuable in ensuring organisational and team fit but for developing talent and internal human resources. While ability is important, there is a need to also understand the soft stuff such as the ability to work well in a team or communicate well or manage stress. Tests are different across levels and the most critical element in testing is to measure competence at the right level. Psychometric testing is now used by over 80% of the Fortune 500 companies in the USA andby over 75%of the TimesTop 100 companies in the UK. Information technology companies, financial institutions, management consultancies, local authorities, the civil service, police forces, fire services and the armed forces all make extensive use of use psychometric testing. EMPS Annual Screening Report 2015 10

Global Screening International Local Insight and Advice 1 2 3 4 5 6 7 8 9 10 Government Oversight and Enforcement of Accuracy in Background Check Industry to Increase in 2016 FCRA Lawsuits Will Continue to Increase in Target Rich Background Screening Environment in 2016 Background Check Industry Will Continue to Both Expand and Consolidate Simultaneously in 2016 Employers and Human Resources Will Be Bombarded with Meaningless Marketing Buzz around Supposed Disruptive Technology in 2016 Background Screening Firms, Human Resources, and Employers Will Be Focused on Legal Compliance and Accuracy in 2016 Domestic Terrorist Attacks Will Put Social Media Background Checks in the National Spotlight in 2016 Ban the Box Movement May Reach Tipping Point But Could Also Inadvertently Do More Harm than Good in 2016 Applicant Tracking Solutions Will Review Integrations with Screening Partners to Address Emerging Legal Risks in 2016 Job Opportunities for Ex-Offenders with Criminal Records Should Increase in 2016 Privacy Concerns Will Loom Large Between EU and US in Terms of International Background Checks in 2016 The SA Background Check industryhas largely been ungoverned over the past number of years. There is no specific focus on this industry at present. However, due to the nature of the services offered the industry does fall within the scope of The National Credit Act and Protection of Personal information Act. The National Credit Act is the equivalent of the Fair Credit Reporting Act. The NCA certainly is having an impact on background screening through its control over the use of credit information for employee screening purposes but our environment certainly isn t as big on lawsuits as the US. The background screening industryin South Africa is still very much in an exponential growth phase. The popularity of employee screening is still growing annually and the increase from government side is due to high incidence/awareness of CV fraud in the government sector. Given the fact that background screening in South Africa requires service providers to have thee mostup-to-date technology in order to be able to offer criminal record (AFIS) checks-this has limited the ability of fly-by night solutions to come to market. This is most certainly a focusfor background screening companies and their clients as we look to comply with requirements of POPI. Socialmedia checks are still new and growing for South African recruiters. We need to be aware of legalities and pitfalls around using social media screening as we are still in infant stages of doing this. This is a current and important think that South African business needs to be aware of-just because a person ticks the box and has a criminal record- doesn t mean they should not be considered. Applicant tracking systems are growing and becoming more popular, our biggest challenge is the storage of applicant data and compliance with the NCA and POPI. Ex-offenders need access to the job market in SA in order for them to rehabilitate and education of SA business could go a long wayto reduce many social ills. Thisis the reason that POPI has become such an important piece of legislation for South Africa. If we wish to do business across borders in the future we will need to comply as a country. International trends taken from Employment Screening Resources (ESR) Founder and CEO Attorney Lester Rosen for the 9th annual ESR Top Ten Background Check for 2016. EMPS Annual Screening Report 2015 11

2015 Top Report Findings 11,8% of job applicants have a criminal record 21% of criminal records are for theft related convictions Over 35% of individuals who have a conviction are repeat offenders In 3,8% of cases, a person with a possible illicit result could still come back with no record 1% of job applicants have been listed on the SAFPS database for a fraud related offence Over 15% of job applicants have a negative credit record 9% of ID documents cannot be verified for some reason 15,8% of qualifications were unverifiable for some reason 3,48% of unverified qualifications were confirmed fraudulent Candidate experience extends into screening: The candidate experience has become increasingly more important. Regulations: it is more important than ever for employers to be well versed in employment and labour law. As they relate to the background screening process in particular, these laws are becoming increasingly more complex Ongoing screening: We foresee a greater emphasis on ongoing screening in coming years as employers strive to create a more secure and safe work environment. Globalization of screening: Screening is becoming an increasingly worldwide phenomenon as employers have to consider the international component of their labour force. How do you choose the right provider for your company? There are several key factors to consider when making your decision. For a well-rounded search, consider the following: Demonstrated expertise Legal compliance & client education Consumer protection & information security Quality & accuracy Product evaluation Be sure. Ask how long they have been doing background screening Ask for references from current clients Check they are affiliated with relevant bodies like AFISwitch, SAFPS and NAPBS EMPS Annual Screening Report 2015 12