Indian Prime Minister Narendra Modi recently voiced his strong support for increasing the participation of women in the workforce.

“We have to think what more can we do for our women workforce, particularly in the emerging sectors. We can make good use of the women power by adopting flexible work hours, which is the future need,” he stated in an address to labour ministers and secretaries of states and union territories.

The Indian government has set lofty goals for its economy and infrastructure in their ‘Vision India @ 2047’ and it appears that the government is putting words into action by pushing for more social security measures and workplace welfare initiatives to support reaching their goals.

The India government recognises that encouraging the female population to participate in the workforce through initiatives like flexible workplaces, a work from home ecosystem, and flexi-work hours, are important ways to achieve their vision.

We are likely to see more government-supported initiatives like these in the coming years, and it’s important that companies adjust their hiring processes to accommodate this influx of female candidates and support increased diversity in their hiring.

Improving hiring processes to increase diversity

Just as workplaces need to become more inclusive to attract a diverse workforce, hiring processes also need to be made more flexible to retain diverse and top-quality candidates in hiring pools.

One way in which companies can offer a flexible hiring process to candidates is by incorporating digital and remote background screening and identity verification options.

Offering digital background screening options enables candidates to conduct their background screening requirements in a manner that is convenient and suitable for them.

For example, remote background screening offers candidates the option to supply their identity documents via photo capture on the weekend or weeknights, instead of during business hours. This type of convenience can be an extremely appealing factor for working mothers and women who provide other types of care during business hours. In fact, it may be the difference between retaining them in the hiring process or losing them to competitors.

Facilitating flexible hiring processes that recognise candidates may be time-poor and have other obligations demonstrates that a company values flexibility and inclusivity from the outset. In the current climate of high talent demand, it is a distinguishing feature that can mean securing the best talent and signifying your company’s values in all aspects of business.

Sterling RISQ offers a variety of digital and remote background screening solutions to facilitate a flexible and efficient hiring process. Learn more about our range of services and solutions by contacting us here or drop us an email at info@sterlingrisq.com

The Hong Kong Financial Services and the Treasury Bureau (FSTB) published its second Money Laundering and Terrorist Financing Risk Assessment Report in July 2022.

The FSTB periodically conducts a comprehensive risk assessment to identify money laundering and terrorist financing threats and to assess the effectiveness of their efforts to address these threats. The latest assessment shows that the landscape continues to evolve, particularly concerning digital financial technologies and virtual asset offerings.

This article will focus primarily on the report’s background screening and hiring process aspects.

Overview

In their latest report, the FSTB found that Hong Kong is exposed to a medium-high level of money laundering threats and medium-low levels of terrorist financing and proliferation financing threats.

However, it also observed that Hong Kong’s ability to combat money laundering and terrorist financing threats is high due to its robust legal framework, rigorous preventive measures, and significant political commitment.

The bureau identified the banking sector and money service operators as particularly vulnerable to higher risks for illicit activities due to frequent attempts to misuse corporate bank accounts and other financial and investment services, e.g. stocks and real estate.

The bureau’s report recommends several “ways forward” to continue mitigating money laundering and terrorist financing threats:

• enhancing the anti-money laundering/counter-financing of terrorism (AML/CFT) legal framework
• strengthening risk-based supervision
• stepping up outreach and awareness
• monitoring new and emerging risks, and
• strengthening law enforcement efforts and intelligence capability.

The FSTB recognises that the global payment landscape has been developing rapidly, even since 2018, when the previous risk assessment was conducted.

The growth of the internet and mobile payment services, along with general technological advancements, has equated to similar growth in the range of techniques used by criminals to achieve their money laundering and terrorist financing aims, particularly during the pandemic.

Virtual assets (VAs) are also becoming increasingly popular tools for criminals, even though they are not legal tender and are not generally accepted as a means of payment in Hong Kong. Their increasing scale has seen an increased number of VA-related fraud cases and is an area of concern for the FSTB.

Fit and proper tests – who is affected?

One mechanism the FSTB proposes for mitigating money laundering and terrorist financing risks is requiring certain professionals to be subject to a fit and proper test before practising in their role.

This test is applied in various ways depending on the given profession and sector, but overarchingly the test ensures that employees are assessed as having a suitable level of integrity and background to fulfil their assigned role.

Fit and proper guidelines are in place for the following businesses and professions:

• financial institutions
• trust or company service providers
• money service operators
• legal professionals
• accounting professionals
• estate agents, and
• dealers in precious metals and stones.

Following the recognition that VAs are becoming increasingly popular in Hong Kong and that the sector is particularly vulnerable to money laundering and terrorist financing threats, the bureau proposes the introduction of a licensing regime for virtual asset service providers (VASPs).

They suggest that any person seeking to conduct a VASP should be subject to a fit and proper test before receiving a licence. The fit and proper test will cover all responsible officers, executive directors, and ultimate owners of the VASP.

Licensed VASPs will then be required to observe AML/CFT requirements and associated regulatory requirements, similar to other financial institutions.

Impacts on the financial sector

The bureau’s report is wide-ranging and encompasses many sectors – including financial, legal, accounting, real estate, and retail (precious metals and stones). All sectors have relevant administrative bodies that assess that businesses’ regulatory requirements are being met, including the implementation of fit and proper checks and licensing for the given sector.

The threats of money laundering and terrorist financing are understandably most prevalent in the financial sector, affecting banking, securities, insurance, money service operators, stored value facilities, money lenders, and virtual assets.

The first five subsets are covered by regulations under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO). They are supervised by relevant authorities, whilst the money lender sector is managed under the Money Lenders Ordinance (MLO) and subject to a rigorous regulatory regime by the Companies Registry.

The last remaining sector to be regulated is the virtual asset service provider (VASP) sector, which is subject to some multidisciplinary oversight by regulators. Still, the government plans to further enhance its regulatory efforts by including licensing of VASPs in the AMLO with supervision by the Securities and Futures Commission.

How background screening comes into play

It is clear from the comprehensive risk assessment report that the FSTB takes its role very seriously in mitigating money laundering, terrorist financing, and proliferation of financing threats in Hong Kong.

An important way in which they seek to achieve this mitigation is by regulating the licensing and fitness of professionals working in certain sectors that are particularly vulnerable to threats. The reasoning is that by filtering the integrity of people working in these sectors, the prospect of collusion between employees and criminals, or prospective employees being the criminals themselves, is minimised.

Therefore, a fit and proper test is a requirement for many professions in Hong Kong. Candidates and hiring businesses in these sectors need to be abreast of the scope of the application of the test in their respective sectors, as employees will only be able to practice if they are assessed as fit and proper.

To minimise the risk associated with employees failing the fit and proper test, hiring businesses can conduct pre-emptive due diligence when verifying candidates and hiring new employees. They can do this by implementing a rigorous background screening process to ensure that the candidate will likely pass the sector’s fit and proper test and will indeed be able to practice in the role they have applied for.

Without conducting this due diligence, a candidate may be hired – with all the time and money involved in such a process – and then fail to pass the fit and proper test set by the regulator. This would create a problematic situation where an unsuitable candidate has been hired and onboarded but is unable to fulfil their given role. Hiring teams would then need to remove or relocate the employee and replicate the process to hire a candidate that can pass the fit and proper test and complete the assigned role.

Conducting pre-emptive due diligence through background screening is particularly relevant for VASPs who are new to the realm of fit and proper tests and will require additional guidance in honing their hiring processes.

Employers in other regulated sectors, such as financial, legal, accounting, real estate, and retail (precious metals and stones), who do not currently employ a background screening program should also seriously consider implementing one in order to decrease the risk to their business and workforce, and the flow-on factors of time, cost, and reputational loss.

Due to the high level of risk involved in hiring new employees, the increased demand for employees in these highly regulated sectors, and at a time when most onboarding and employment now occurs remotely, background screening has become a vital step in any Hong Kong business’s hiring process.

Sterling RISQ can help

Background screening in Hong Kong requires awareness and consideration of various legal and cultural nuances. This knowledge helps to ensure the suitability of a business’s screening program to Hong Kong’s laws and the respective sector’s regulations and guidelines.

Sterling RISQ is a global expert in conducting background screening and identity verification in Hong Kong. We offer a wide range of screening services, including identity employment, education, professional memberships verification, criminal background, credit history, financial regulatory AML and PEP, adverse media and directorship searches and social media screening.

We have significant experience operating in Hong Kong and a local office with staff who have a nuanced understanding of relevant screening requirements and regulations. Contact us at info@sterlingrisq.com  if you want to discuss a background screening package for your business or have any questions about conducting background screening in Hong Kong.

We’ve all heard the stories – a senior executive fools everyone and somehow gets top jobs based on fake work experience or educational qualifications.

We think we’d never fall for it, but it’s incredibly easy to be the ones fooled. Just ask the National University of Singapore (NUS), Peking University, and the South China University of Technology.

Professor Chen Chunhua was a visiting professor at the NUS Business School, the Dean of Beijing International MBA Business School at Peking University, and a professor and doctoral supervisor at the School of Business Administration of the South China University of Technology before being called out for faking her academic credentials and employment history.

Chen was found to have provided details of a doctorate from a fake university in Ireland and had claimed to be a “military adviser” for tech company Huawei but Huawei denied this and stated publicly that they had no knowledge of Chen.

Chen had even previously been included in Fortune’s China’s 25 Most Influential Businesswomen Leaders list for four consecutive years from 2015 to 2018.

The boldness of Chen’s lies and fraud, combined with the long period of time that she was able to get away with those lies, shows just how easy it is to miss a major issue when recruiting new staff.

Recruitment is a busy time and there is often significant pressure to fill roles and onboard staff quickly. Conducting thorough background screening and taking the time to genuinely investigate candidates’ credentials inevitably starts to take a backseat.

But we guarantee that extra time spent on background screening is worthwhile. Background screening saves organisations time and money in the long-run, and also ensures that genuine candidates with real experience and knowledge are filling roles.

As can be seen in the case of Chen, even Fortune magazine and prestigious universities can be duped by failing to take the time to conduct proper checks.

We also see how the effect can quickly snowball – once a fraudulent candidate gets entry into one role, future organisations mistakenly rely on the belief that the original employer would have conducted thorough checks and offer new employment, allowing the candidate to build their experience – all while the original lies remain uncovered.

One way to guard your organisation against these fraudulent individuals is to conduct thorough background screening and checks on all candidates.

For senior roles in particular, we recommend implementing a comprehensive suite of background screening that includes education checks, reference checks, social media checks, and adverse media checks, to ensure that candidates genuinely hold the experience and education they claim to have and to identify any red flags before an offer of employment is made.

In this modern world of “always-on” social media and news websites, many potential issues can be identified quickly by conducting thorough social media checks and adverse media checks.

Implementing a comprehensive background screening process will help your organisation to:

• ensure that candidates have the knowledge and experience to fill the role they are hired and paid for
• save money, time and headache further down the line if an employee’s fake credentials are exposed, and
• protect your organisation from negative media exposure and associated concern about the quality of your services.

 

Sterling RISQ are experts in offering background screening services in the Asia-Pacific region. We have significant experience in tailoring background screening packages for all roles and organisation types. Protect your business from fraudulent candidates – get in touch at info@sterlingrisq.com to discuss a background screening package suited for your organisation.

If you’re debating the merits of adding social media to your background screening process, you aren’t alone. A Harris Poll survey found that 70% of hiring managers consider screening candidates’ social media profiles to be useful during the hiring process. Recently, we discussed the benefits of social media screening with Ben Mones. As CEO and Founder of Fama, a world-leading social media screening company, Ben knows both the potential pitfalls — and real-world benefits — of incorporating social media into the background screening process.

First, the potential pitfalls. Correctly identifying candidates’ social media accounts is challenging on its own, but manually combing through them can slow your hiring process to a crawl. For more common names, like John Smith, identifying the correct person can be especially difficult. Ben notes that using advanced technology (i.e. natural language processing and machine learning) complemented by human expertise helps HR staff to filter out the noise and view the most relevant information.

Another pitfall comes from the regulatory landscape. Compliance with federal, state, and local employment and privacy laws is always a top-of-mind concern for human resources teams. Social media screening can reveal more than what you might discover in interviews, including candidates’ views on religion, politics, lifestyle, and other topics they feel passionate about. But because of the wide variety of information that may be shared on social media, it’s important to align your process and policies to meet Equal Employment Opportunity Commission (EEOC), Fair Credit Reporting Act (FCRA), and other relevant compliance laws and guidelines.

As our recent article in Recruiter.com notes, “Everyone you hire is someone who will represent your brand, influence your customers, and have access to your company’s resources and assets. You need to tailor your social media screening policy toward the areas of most concern for your business. For example, if branding is your biggest area of risk, you want to look at how candidates’ social media activity reflects their ability to be positive ambassadors for your brand.” Certainly, HR leaders need to set a clear process reflective of their corporate values while also establishing what kind of information is relevant, making sure to only consider information as it applies to the role being filled.

Now for the advantages: clear reasons that your organization may want to incorporate social media screening in its overall background screening process:

#1: Meet the Expectations of Today’s Consumers & Employees

A strong, fair background check process demonstrates your commitment to these values. Ben notes: “Modern background checks cover elements like employment history, education verification, and criminal background checks. I don’t think that’s ever going to change. But now we’re finding that employers are also starting to look at the sorts of things that their customers and employees care about.”

Social media is filled with this type of information. Ben encourages employers to consider what their brand stands for: what important stances should it take? By doing so, brands can identify what matters most. For example, when deciding how best to support a strong commitment to diversity and inclusion­, HR professionals could decide to add social media screening to their hiring process to help detect behaviors which violate specific laws or policies identified by their employers. After all, background screening is about protecting your employees, your customers, and your brand. “The wrong hire could alienate people and make them not want to patronize your business,” says Ben.

This benefit leads to our next reason for social media screening:

#2: Strengthen Your Organizational Culture

A strong workplace culture is all about authenticity: do workers really share your organization’s corporate values? To this end, social media screening helps organizations spot patterns that an interview or typical background check might not capture (for example, extreme political beliefs). According to a recent survey on authenticity in the workplace, candidates and employees alike may act less authentic at work for a number of reasons. In fact, 7 in 10 people said they adopt a different personality at work than they do at home. The survey also found that 3 in 5 people admit to hiding something from their current employer:

• 37% hide their political views
• 36% hide information about their families

Most often, these details are hidden for specific reasons:

• 49% do it so people won’t feel uncomfortable
• 43% do it to avoid stereotyping
• 41% do it because they fear it will impact career advancement

This is especially true for individuals in the LGBTQ+ community and those of different religions, races, or nationalities:

• 85% of LGBTQ+ employees say they have a different personality at work, compared to 64% of heterosexual employees.
• 52% of African Americans have hidden information about themselves or their lives out of fear of stereotyping and 47% out of fear of being discredited.

Interestingly, remote work has a freeing effect, with 92% of people reporting that they were in fact authentic at work. The survey also found they also felt more relaxed (61%) and more inclined to speak their mind (40%) compared to in-person or hybrid employees. Cultivating authenticity across your organization helps HR staff to build a happier, more productive workforce. To this end, adding social media as a component of your background screening process can help maintain a strong work culture. “Authenticity can be a key component of job satisfaction. Employees who feel they can be authentic in the workplace have a sense that they’re valued as individuals and trusted,” the survey found. Which leads to our third reason for social media screening:

#3. Improve Employee Retention by Avoiding a Toxic Workplace

Not sure how background checks­ lead to good or poor employee retention? Social media screening can be used as a way to help identify if the people coming into an organization might contribute to a safe and productive workplace culture. That’s particularly important now, as companies everywhere struggle with both hiring difficulties and a flood of resignations.

Citing a study into drivers of the Great Resignation, MIT Sloan Management Review notes, “Not surprisingly, companies with a reputation for a healthy culture, including Southwest Airlines, Johnson & Johnson, Enterprise Rent-A-Car, and LinkedIn, experienced lower-than-average turnover during the first six months of the Great Resignation.” And while many attribute hiring and retention problems to poor compensation, a worker’s hourly rate or salary isn’t the biggest issue. When the researchers evaluated 170+ cultural topics, they found that a toxic culture is 10.4 times more likely to contribute to attrition than compensation.

The article suggests that “The leading elements contributing to toxic cultures include failure to promote diversity, equity, and inclusion; workers feeling disrespected; and unethical behavior.” By defining what’s most relevant to their business, employees, and culture, HR leaders can customize social media screening and empower their HR teams to make well-informed decisions.

Ben explains, “Screening isn’t like a Klout score: it’s not a thumbs-up or thumbs-down. You determine your goal and draw the line to flag what is most critical to your culture, including signs of intolerance, threats, or harassment.” When management hires people who have a history of acting intolerant or threatening towards others, it can have a negative impact on everyone’s productivity and make good employees want to leave. Employee background checks are a good investment. Companies already have an existing focus on employee recruitment, onboarding, training, engagement, and retention. Investing in expert background checks and social media screening can be a great way to support all these initiatives, particularly if it helps attract and hire candidates that support a positive culture.

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.

Sterling RISQ has been operating in the background screening and verification industry for over 25 years. During this time, we have global offices across key markets, and we conduct 95 million searches for over 25,000 clients across geographical lines annually.

Although we have grown and evolved, our overarching aim has largely remained the same – to create safer work environments and experiences for our clients.

We have developed a unique delivery model of our services to clients to achieve this aim after plenty of experience and by iterating and testing different approaches.

Our service delivery model is based around a client-first approach, and the primary tenets of the model are to:

• support and advise our clients throughout the background screening process and foster a positive and effective working relationship with them (via our account management services), and
• deliver timely and accurate background checks (via our case management services).

Account management services

In order to provide effective support and advice to our clients and to nurture a positive working relationship, we assign experienced account managers to each client as their primary point of contact. Account managers provide progress updates on searches and checks to their clients to ensure the lines of communication are clear, timely, and relevant.

Account managers also support their clients at a strategic level by recommending suitable and tailored screening packages for the needs of their client companies. They can further provide more in-depth analysis such as risk vs cost benefits for each screening service.

Case management services

Our delivery model is also designed to provide accurate and timely checks to our clients, as we understand that our clients are working in a busy, fast-paced business world where time is of the essence.

Our case management services are therefore in place to provide support on each account at a transactional level. Case managers fulfill the day-to-day requirements of processing checks, ensuring they are conducted in a timely manner, and managing back-end processes like populating reports and results into a client’s portal.

Case managers are truly the backbone of our company in terms of processing checks quickly and accurately – a characteristic that Sterling RISQ prides itself on.

Our unique delivery model

With their forces combined, case management and account management staff are both vital to delivering optimal services for our clients. Case management staff ensure the speedy processing of checks, whilst account management staff provide the client-facing service needed for a smooth and synchronised relationship.

We have developed this unique delivery model over our many years in the industry and have found this model to be the most effective for delivering our services in an impactful and timely way.

We hope you find our services delivered on these goals – please contact us on info@sterlingrisq.com if you have any feedback or any other suggestions on how we could improve our service delivery to you.