mie bscreening 2015 draft1...a major challenge when conducting background checks in africa....

Background Screening IndexM A N AG E D I N T E G R I T Y E VA L UAT I O N ( PT Y ) LT D2015

BACKGROUND SCREENING CHALLENGES

• Informationavailability• Compliancerequirements*• Turnaroundtime• ITsecurity• Lackofindustryregulation

*ChallengesincludethecompliancetotheNationalCreditActAmendment19of2014(NCAA).TheProtectionofPersonalInformation(POPI)Actpromotesthemandatoryrequirementofobtainingconsentfromcandidatesbeforescreening.

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Executive Summary

2015 AT A GLANCE

ManagedIntegrityEvaluation(MIE)hasnotedasignificantincreaseindemandforbackgroundscreeningservicesinSouthAfricaandAfricaoverthelastfiveyears.

Thisincreaseisduetogrowingrecognitionofbackgroundscreening’sbenefitsforbusiness:

• Improvesqualityofhires;• Improvesstaffretention;• Mitigatesriskandreputationalharm;• Assistsinmanagingcosts;and• Uncoversdiscrepancies.

WhilebackgroundscreeninginAfricawashardlyvisibletwoyearsago,awarenessamongorganisationsoperatinginAfrica-aswellasthoserecruitingfromthecontinent-thattheserviceispossibleandresultedinmoreandmoreofthesecompa-niesvettingcandidatesacrosstheregion.

MIE TRANSACTIONS 2010 - 2015

DID YOU KNOW? Post-hire screening

• Hasincreasedindemandoverthepastdecade• Isessentialacrossallindustries• Isanecessityforpeopleworkinginthe financialsector• Frequencyofre-screeningisindustry dependant• Long-servingemployeesmayhavenever beenscreened• Employeesmayhaveacquiredacriminal recordafterbeingon-boarded

Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

Introduction

WHAT IS BACKGROUND SCREENING?

Alsoknownas‘backgroundchecks’,‘suitabilitychecks’and‘probitychecks’,backgroundscreening istheprocessofverifyingandauthenticatingvariouspersonalandconfidentialinformationofan individualororganisation.

Why do businesses utilise background screening?

• Peaceofmindthatanappropriatelyskilled andexperiencedcandidateischosentofill therelevantposition• Reducedtrainingandemployeedevelopmentcosts• Higherlevelsofproductivitywithinscreenedroles• ImprovedregulatoryandHRcompliance duringthehiringprocess• Riskandlitigationmitigation

Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

SCREENING TIP

Theprimaryobjectiveofbackgroundscreeningistoensurethatanorganisation’sworkforceishonest,appropriatelyqualified,skilledandexperienced-ultimatelyavoidingnegativefinancial,legalandproductivityimplications.

DID YOU KNOW?

Demandbybusinessesforbackgroundscreeninghasincreasedby11%overthelastfiveyears.

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Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

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Backgroundscreeningservicesaretypicallyrequiredbyin-countryorganisationsemployinglocalnationalsaswellasorganisationsfromaroundtheworldwhichemploycandidatesfromAfrica.

MIE’s African vetting services include:

• Creditchecks• Criminalchecks• Qualificationverification• Driverslicencechecks• Employmentreferenceverification• Mediasearch• Worldchecks

A

AfricaMIEoffersdetailedandspecific backgroundscreeningservices in15Africancountries (inadditiontoSouthAfrica).

EmploymentReferenceFAIS

IDLicence

QualificationCriminal

Credit

AFRICA CHECKS 2014-2015

BACKGROUND SCREENING CHALLENGES IN AFRICA

Africancountrieshavetheirown,uniquelegislation–orlackthereof.

Credit,labour,dataprivacyandfreedomofinformationlegislationdirectlyimpactsbackgroundscreeningcapabilities.Thispresentsachallengeforbusinesseswhicharerequiredtoensurethelegalityoftheirin-countryrecruitmentpractices.

Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

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SCREENING TIP

Africanqualificationscarryhighriskofbeingfraudulent,qualificationchecksarethereforevitalwhenoperatinginorrecruitingfromAfrica.

DID YOU KNOW?

Theavailabilityandreliabilityofdatapresentsamajorchallengewhenconducting backgroundchecksinAfrica.

CompaniesmakinguseofbackgroundscreeningservicesinAfricashouldnotonlyrelyonverifyingcandidate’squalifica-tions,butalsochecktheircreditandcriminalhistoryintheircountryoforigin.

Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

Increasingdemandbybusinessestoverifythequalificationsofpotentialandexistingstaffislargelyduetoincreasedawarenessoftheworldwidequalificationfraudepidemic–atrendwhichisrifeamongentryleveltoseniorexecutivelevelemployees.

ThemajorityofMIE’squalificationverificationsareprocessedthroughtheNationalQualifications Register(NQR®)whichisownedandoperatedbyMIE.Withadatabaseofover3.5milliongraduate recordsand24subscribingtertiaryinstitutions,NQR®verificationsarerenownedfortheiraccuracy.

In2015,MIEconductedatotalof478264

qualificationchecks.

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QualificationVerification

MAJOR VS. MINOR DISCREPANCIES

MIE’sresultshighlightthatacandidate’seducationalhistoryisthemostlikelytocontain discrepancieswhencomparedtoallotherbackgroundscreeningchecks.

Withagrowingcultureofdishonestyandoverstatementinthisregard,itisimportanttonotethe differencesbetweenminorandmajordiscrepancies.

Minordiscrepanciesincludenegativeresultssuchasacandidatecurrentlyintheprocessof completingtheirqualificationratherthanhavingbeenawardedtheirqualification.

Majordiscrepanciesontheotherhand,includefraudulentresults.Examplesoffraudulentresultsincludeacandidateforgingoralteringtheircertificatedeliberatelyorneverhavingbeenawardedthequalification.

DID YOU KNOW?

MIEhasfoundthatqualificationchecksarethemostrequestedbackgroundscreeningservice.

SCREENING TIP

InlinewiththerecentNationalCreditActAmendment(NCAA)19of2014inMarch2015,qualificationverificationscanonlybecarriedoutonindividualswhohavesuppliedwrittenconsent.

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Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

FRAUDULENT VS. NEGATIVE VS. CANCEL VS. POSITIVE

QUALIFICATIONS - 2015

QUALIFICATION RISK 2010-2015

International

African

NationalSecondaryDepartment

TertiaryCourse

NationalTertiary

NationalSecondaryUmalusi

NationalQualificationsRegister

Membership

QUALIFICATION BY CATEGORY DISCREPANCIES

Fraudulent2219

Positive402422

Negative33972

Cancel39651

2010 2011 2012 2013 2014 2015

18.20%

16.97%

16.42%

15.92%

15.64%

15.57%

Criminalrecordchecksprovideorganisationswiththeinsightandinformationtheyrequireregardingtheirpotentialandexistingemployees’criminalbackgrounds.

MIE’scriminalbackgroundchecksareconductedthroughtheSouthAfricanPoliceService’sAutomatedFingerprintIdentificationSystem(AFIS)-themostup-to-datecriminalrecorddatabase.

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SCREENING TIP

Toensureaccurateandlegalemployeevetting,useareputablebackgroundscreeningcompany.

DID YOU KNOW?

Expungentofone’scriminalrecordispossibleif:

• Ithasbeeninexistenceforaminimum of10yearswithnosubsequentconvictions• Youweregiventheoptionofpayingafine oflessthanR20000• Theoffenceisconsideredtobeofa trivialnatureorthepunishmentisno longerconstitutional• Ifyouweretoldthatpayingafinewould notresultinacriminalrecordandhave sincediscoveredtheexistenceofsucha record

In2015MIEconducted

582203criminalchecks

Criminal Checks

Itisimportantforcompanyleaderstoconsiderthepositiontheapplicantisapplyingforandtoweighuptheirpastcriminalbehaviourwiththejobathand.Ifanapplicantcommittedaminoroffence(suchasshop-lifting)anumberofyearsago,itisarguablethatthismaynotimpacthisorherabilitytoperformwellintheworkplaceenvironment.

Inthiscase,thehiringcompanycanplayacriticalroleinassistingtheindividualintheirrehabilitationprocess.Beingacceptedinthecommunitytotheextentthatoneisabletofindajob,lessensthepossibilityoftheindividualturningbacktocrimeasaformofincome.

Ontheotherhand,applicantswhohavearecenthistoryofwhitecollarfraudortheft,maynotbebestsuitedtoacareerinwhichtheyareresponsibleforlargesumsofmoney.

Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

CRIMINAL BY CATEGORY STATS

2015 CANDIDATES WHO DISCLOSED THEIR CRIMINAL RECORD VS. THOSE WHO DID NOT

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582 203CRIMINALCHECKSCONDUCTED 47 916

UNDISCLOSEDRECORDS

Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

Criminal bycategorystats

Pendingcriminalbycategorystats

ViolentCrimes

TheftOffences

CrimesagainstState

Narcotics WhitecollarCrimes

40%

35%

30%

25%

20%

15%

10&

5%

0

8%

Credit Checks

WHO SHOULD CONDUCT CREDIT CHECKS ON EMPLOYEES AND WHY?

Utilisingcredit(orBureau)checksenablesbusinesses toidentifyhowemployeesmanagebudgetsandfinances.Thisisparticularlyvitalforfinancial industrieswhoinvestagreatdealoftrustinemployeesresponsibleforhandinglargeamountsofmoney.

Withanincreaseincandidates’credithistoriesbeingfoundasunfavourable,itcanbearguedthatmoreindividualswhoarequalifiedtoworkinthefinancialindustrymaynotbesuitabletodoso.Financialdepartmentsandinstitutionsarethereforeathigherriskoffacingliabilityandunnecessaryfinanciallossesiftheydonotscreenpotentialandexistingemployees.

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SCREENING TIP

TheHRpoliciesoforganisationswhichrelatetovettingemployeesshouldbe reviewedonaregularbasis.

DID YOU KNOW?

MIEonlyconductscreditcheckson candidatesandemployeeswhomeetthelegalcriteriaforustodoso.

Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

2015 LEGISLATION CHANGES

MIEisaregisteredCreditBureauandisthereforerequiredtocomplywiththeregulationsassetoutintheNationalCreditActAmendment19of2014(NCAA)whichcameintoeffecton13March2015.InlinewiththerecentAmendment,aconsumercreditrecordmayonlybeaccessedbyanemploymentagency,recruitmentconsultant,staffingcompanyoremployerwhen:

• Theycertifythattherequestforconsumercreditinformationrelatestoapositionrequiring honestyinthehandlingofcashorfinances• Thereisajobdescriptioninplacethatstipulatestherequirementoftrustandhonestyinthe handlingofcashorfinances• Specificandinformedconsentoftheconsumerisobtainedpriortotherequestbeingmade.

Thevolumesbelowindicatedaninterestingtrend–duetotherecentAmendmenttotheCreditAct,MIEhasnotedadeclineinthenumberofrequestsreceivedtoconductcreditchecks.

CREDIT CHECKS

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Anycompanycollecting,storingandreportingoncertaincategoriesofpersonalinformationhastobearegisteredCreditBureauintermsoftheNationalCreditActNo.34of2005.

Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

PercentageRisk

Volume

650 000

600 000

550 000

500 000

450 000

400 000

350 000

300 000

0

2010 2011 2012 2013 2014 2015

35%

30%

25%

20%

15%

10%

5%

0

40%

Lookingaheadinto2016,MIEforecasts continuedgrowthindemandforbackgroundscreeningservices.

Afactorcontributingtothisgrowthisthatbusinesses areincreasinglyrecognisingthebenefitsofscreening theirexistingandpotentialemployees.Fromimproving thequalityofhires,touncoveringdiscrepancies,backgroundscreeningnotonlyensuresthatanorganisation’sworkforcestandardsareupheldbutalsomitigatesfinancialandreputationalrisk.

SOUTH AFRICA’S UNEMPLOYMENT RATE

Thejobmarketisbecomingincreasinglycompetitiveandjob-seekersarebecomingmoreandmoredesperateforemployment.Thisdesperationincreasestheriskofjob-seekerslyingabouttheirprofessional,criminalandacademichistories.

Whilestudentswereoutofclassprotestingfor#FeesMustFall,theymayhavemissedoutoncrucialtimeneededtopreparethemselvesfortheirfinalexaminations.Itisaconcernthatduetothislackofpreparation,thesestudentsmaynotperformtothelevelrequiredtoentertheircareerofchoiceandmayfindthemselvestakingextrememeasures(suchasmisrepresentingoroverstatingtheir qualifications)tosecureanopportunity.

Withthisinmind,backgroundscreeningwillbe vitalconsiderationforbusinesseshiringentrylevelemployeesin2016.

The 2016 Background Screening Landscape

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DID YOU KNOW?

MIEexpectsbackgroundscreeningto continuegrowinginAfricain2016.

SOUTH AFRICA’S UNEMPLOYMENT RATE

Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

2015-05-06 2015-07-29 2015-10-27 2016-02-10

**Q4forecast–source(www.ieconomics.com)

CHANGING BUSINESS NEEDS

Asthebusinessenvironmentisconstantlychang-ingandadaptingtonewtechnologicaltrends,theneedsoforganisationstomeetbusinessandstaffingobjectiveshaveevolved.MIEhas,inturn,developednewproductsandservicestofulfiltheseneeds.

Theindustryisbecomingmoreautomatedandelectronicbackgroundscreeningverificationswillsoonbecomethenorm.

MIE’selectronicCandidateCapturingSystem(eCCS)isthefirstofitskindinSouthAfricaandispoisedtochangethebackgroundscreeninglandscape.Theportalrequiresforclientorganisationstomakeascreeningrequest,therespectivecandidatethenreceivesalinkandisrequiredtocompletetheprocessonline.

AnothertrendunfortunatelyontheriseintheSouthAfricanbusinessenvironmentiscorruptionandprocurementfraud.Beinginthespotlightofacorruptionscandalexposescompaniestoincreasedcostsfromfinesorinvestigationsaswellasreputationaldamage.

Recentlydevelopedandintroducedtothemarket-asapossiblesolutiontomitigatesuchriskandcombatprocurementfraud-ZoomOut™,isasoftwareapplicationwhichfiltersthroughemployeeandvendorinfor-mation.Potentialconflictsofinterestorcorruptrelationshipswithinanorganisation’ssupply-chainisthenflaggedforattention.

Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

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Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

AFRICA

MIEexpectsbackgroundscreeningtocontinuegrowinginpopularityinAfricain2016withtechnologicaldevelopmentstransformingthewayvettingisconductedonthecontinent.

Inadditiontoexpandingit’slistofAfricancountriesinwhichMIEoffersscreeningservices,thecompanyaimstoaddanumberofinstitutionstotheAfricaQualificationsRegister(AQR).

Copyright

AllRightsReserved.Copyrightinallworksfoundinthisindex,includingbutnotlimitedto,text,imagesandgraphics,whichhavebeencreatedanddevelopedbyManagedIntegrityEvaluation(Proprietary)Limited(hereinafter“MIE”)shallvestinMIE,andnopartthereofmaybecopied,reproduced,distributed,disseminated,adapted,commerciallyexploited,publishedordisplayedinanyformorbyanymeanswithoutMIE’s expresswrittenpermission.Inadditionanyotherintellectualproperty,whetherregisteredornot,containedinthisindex,includingbutnotlimitedto,MIE’slogosandtrademarks,whichareproprietarytoMIEareandshallremainthepropertyofMIE.

About MIE

Establishedin1988astheveryfirstcommercialBackgroundScreeningcompanyinSouthAfrica,MIEwithstoodturbulentpoliticalandeconomictimestoemergeasSouthernAfrica’sBackgroundScreeningmarketleader.Conductingonly500backgroundchecksin1988,MIEembarkedonagrowingspreethatcontinuesunabatedtoday–completingover2.5milliontransactionsin2015.

KeytoMIE’ssuccesshasbeenthecompany’suncompromisingcommitmenttoprovidingafocused, cost-effectiveandhighqualityBackgroundScreeningservice.Havingaccumulatedawealth

ofknowledgeandexperience,MIEhasdefinedscreeningprocessinSouthernAfrica,andhasrevolutionisedthetechnologicalsystemsrequiredtobethemostreputableandtrustworthyvettingcompanyinSouthAfricaandAfricaalike.

TheEOHGroupacquiredMIEinNovember2014,signallinganeweraforthecompany.Thismergerbroughttheexpertiseofbothcompaniestogether,culminatingincontinuedgrowthandquality services.TheacquisitionresultedinMIEbecoming100%ownedbyEOHHoldingsLimited.

Managed In teg r i t y Eva luat ion (P t y ) L tdA l l r i gh ts reser ved .

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