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News of prime minister's 'mid-level' checks on Andy Coulson, highlights the importance of background research for employers

The subject of background checks has been brought into sharp focus by the News of the World phone hacking scandal. With David Cameron being under pressure to explain why he hired Andy Coulson, how can employers really know who they are hiring and if their references can really be trusted?

Yesterday news broke suggesting the prime minister's press secretary Coulson underwent only mid-level security vetting - rather than comprehensive and rigorous checks on his background.

The press has debated if, had he been put through the higher level of security vetting, there would have been detailed background checks on his finances and interviews designed to find out if anything in his past might embarrass the Government.

Mutual trust and confidence is the most important unwritten term in employment contracts. The recession has inevitably led to greater competition for jobs which in turn has led to more candidates embellishing their CVs with exaggerated skills, experience and qualifications. Background checks used to be considered a 1984-Big Brother sort of thing. Not any longer. Companies are increasingly seeing a clear need for them. In America, the majority of companies do background checks. In Europe the percentage is very small… but it's beginning to change.

Typical CV embellishments include claiming to have earned an MBA at a better school than they attended, and inflating a job title, such as claiming to have been the global director of sales and marketing, when they only held the position at the regional level. Another common find during employment screening are gaps in employment histories which have been covered up by falsifying employment dates.

For example, novelist Jeffrey Archer's CV boasts of having attended Wellington and Oxford. But he chose not to mention that it was Wellington School in Somerset rather than the more prestigious Berkshire public school Wellington College. Still further, his study at Oxford Brookes (then a Polytechnic) was for a postgraduate diploma in education, for which he was unqualified, as he had never obtained an undergraduate degree.

Small indiscretions such as these do not mean a candidate is unsuitable and will not get the job but in reality many employers find the fact a candidate has lied to be a good reason to not offer employment.

There are three main reasons for employers to undertake background checks, these are: Compliance, Integrity and Skills.

At a basic level employers need to check that employees have the right to work in the UK, have a full driving licence if they have a company car, car allowance or drive as part of their job, and depending on the sector, that requirements for working with vulnerable children or adults are met, amongst others. This process ensures companies meet compliance requirements set out by law.

Secondly, it is important that prospective employers learn about the integrity of a candidate prior to employment. Reference checking offers verification of a candidate's précis of previous employment; helps establish what they are like to work with, how they handle pressure and how they take feedback or criticism, amongst other factors. This enables employers to build an idea of a candidate as a whole and fully understand if they would fit into their organisation.

Finally, skills checking allows companies to know that post graduate qualifications and accreditations, which applicants claim to have achieved, have actually been awarded. ADP has found that through their background checking service, approximately 10% of candidates falsify education and credentials.

Background checks also help during interview stages and, ultimately, if and when a candidate is employed. As this year's final of BBC's The Apprentice showed. Tom won the competition even though there were discrepancies in his references, with his former employer describing him as 'not a starter/finisher'. By knowing this the interviewer and Lord Sugar were able to probe him on this point and question his motivations to succeed in business. He ultimately won and Lord Sugar now has a clear understanding of how Tom works as he sets out on a new business venture with him.

Background checking can also remove interviewer bias as it is an independent view which allows firms to really understand who they are hiring. Seventeen percent of candidates reference interviews are flagged meaning, among other factors, that they have discrepancies in their performance, skills or attendance. They may have falsified their strengths and weaknesses which is why background checking is designed to paint a whole picture of a candidate, by investigating and speaking to their former employers. Interviewers are trained to probe and ask questions which will paint a clear image of a candidate's suitability for a role.

Background checks offer employers the opportunity to recruit with confidence, while improving the efficiency of the process. It pays to be thorough as getting the wrong person into an organisation can be very costly, as recent events show.

Frances McCormick, product manager at ADP