THE BLOG
02/21/2011 04:13 pm ET Updated May 25, 2011

Background-Check Business Booms Thanks to China

Firms that provide background checks on businesses and individuals, from university applicants to management candidates, have never been in such high demand thanks to a flood of fraudulent claims by Chinese businessmen and applicants.

Some of the world's leading commercial and private information services have reported that the growing problem of academic and work qualification fraud in China has lead to a huge hike in business for them.

Worldbox Business Intelligence founder Adrian Ashurst says a range of international company clients operating in China have found that senior people they had hired on the strength of their CVs did not have the experience and/or academic qualifications required to fulfil their positions, after checking their credentials.

The Swiss-based boutique intelligence-gathering service, with Asian bureaus in Beijing and Hong Kong, checks all details in an applicant's CV on behalf of its customers and fills information requests that cannot be served by web-based subscription services or traditional search giants, such as Experian.

Their personalised service and network of ground agents aims to provide a more comprehensive picture than their larger rivals at a time when the level of falsified information by applicants in the business and educational sectors is skyrocketing.

Resume fraud in figures

The latest Q4 Hudson Report on Employment and HR trends in China surveyed over 1,500 employers across Asia, and found that more than two-thirds (68%) of business respondents across all sectors had encountered candidates being dishonest about their background or experience in their resumes in China, a far higher proportion than in the other markets surveyed in Asia.

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According to the report, respondents in the Media/PR/Advertising sector were the most likely to have experience of candidates exaggerating or falsifying information in their resumes: 91% said they had done so. This was attributed to the very high churn rate of workers in this industry, who often make bold claims to present themselves as being less deserving of the axe than their co-workers.

Second was the Tech sector, with the highest proportion of respondents saying that candidates are dishonest about their job responsibilities/achievements and years of experience at 61% and 43%, respectively.

At 66%, the Banking and Financial Services sector had a very high proportion of respondents saying that candidates submit false information about their remuneration packages. This sector has expanded rapidly in recent years as many international banks have entered the market. Candidates are keen to switch jobs to increase their remuneration and tend to exaggerate pay levels to strengthen their negotiating position.

At 64%, the Consumer sector had a relatively low proportion of respondents who have encountered dishonesty on the part of candidates. This industry is well-established and companies often have experienced HR teams that can identify falsified resumes. In addition, recruitment specialists operating in this business are highly effective at verifying candidates' backgrounds before making recommendations to employers.

The Manufacturing and Industrial sector reported the same relatively low figure as the Consumer sector at 64%. Employers in this sector often have highly technical requirements when filling vacancies and there is a significant crossover of candidates between companies, making it relatively simple to verify the information provided by candidates. 'These factors mean that candidates are more likely to be honest when preparing their resumes,' the report said.

Respondents who said they had encountered candidates falsifying their resumes were also asked about the specific areas in which dishonesty or exaggeration occurred. Remuneration packages, job responsibilities and achievements are the areas in which candidates are most likely to distort the facts. Overall, these factors were mentioned by 59% and 55% of respondents, respectively.


    Stories of professional CV and academic qualification falsifying in China have been reported widely in the international press... Here are some recent examples:

  • After a plane crash killed 42 people in northeast China last August, officials discovered that 100 pilots who worked for the airline's parent company had falsified their flying histories.

  • In an editorial published last year, The Lancet, the British medical journal, warned that faked or plagiarized research posed a threat to President Hu Jintao's vow to make China a 'research superpower' by 2020.

  • When the Zhejiang University in Hangzhou released results from a 20-month experiment it conducted by running plagiarism-detection software across a number of scientific journals last fall, nearly a third of all submissions were suspected of being pirated from previously published research. In some cases, more than 80 percent of a paper's content was deemed unoriginal.

  • In a study of 32,000 scientists by the China Association for Science and Technology conducted in summer 2009, more than 55 percent reported they knew someone guilty of academic fraud...

Educated gamble?

Chinese educators say the culture of cheating takes root in high school, where the competition for slots in the country's best colleges is unrelenting and high marks on standardised tests are the most important criterion for admission. The Ministry of Education announced two major anti-fraud campaigns in the 90s, but the bodies they established to tackle the problem have yet to mete out any punishments.

Dishonesty about academic qualifications, cited by 42% of respondees in Hudson's report, was more than twice as common in China as in the other markets surveyed.

This chimes with Worldbox's reports that they are experiencing a sharp uptrend in the number of falsified qualifications submitted by young Chinese students to international universities they are applying to study at.

These student checks can be broken into two tiers; a regular check where the student will have had little or no work history to check; and, checking of MBA students' claims of qualifications and of their related or attached work experience.

The padded resume of Tang Jun, the millionaire former head of Microsoft China and something of a national hero, was widely reported last summer to have falsely claimed to have received a doctorate from the California Institute of Technology. This story was broken by Fang Zhouzi, a Chinese blogger whose website, New Threads, has exposed more than 900 instances of fakery, some involving university presidents and nationally lionized researchers.

Tang was subsequently quoted by the Beijing News as saying: "Losers cheat some people and get caught. Winners cheat the whole world all the time." His supporters argued that it was fine for him to make such a mistake as long as his admirable business success is real.

Employers in China have adopted stricter background checks on potential employees following the Tang Jun story and many employers now leave no stone unturned to crosscheck their job applicants' credentials and credibility.

Qiu Jialu, an HR specialist at a real estate investment company, says her company is stepping up investigation on potential employees' background information.

"Our company has strict procedures for recruitment, especially for those applying for high and middle-level positions. Now, we are planning to expand background checks on those applying for rank-and-file positions," Qiu said.

"Tang Jun's case reflects a social problem. With the increasingly cut-throat competition, many people buy fake academic credentials to advance their careers," said Zhu Shibo, manager of the recruitment service centre at the China International Intellectech Corporation Shanghai foreign enterprises service company, one of the country's leading human resources service providers.

Zhu said her centre has received unprecedented commissions to investigate job applicants in recent years. "The number of employers who hire our services for background investigation, which usually covers highest educational qualification, criminal record and work experience, has doubled in the past two years."

Corporate manhunt

Conducting research on existing directors of Chinese companies is one of Worldbox's more expensive services, and arises when businesses come to doubt the credentials of a manager they have already employed. Background checks are normally conducted in the final stages of the selection process, but more in-depth research is sometimes required at a later stage.

Prices are highest for senior management checks because applicants' education and work history is generally more extensive than for people applying for normal positions.

Worldbox additionally undertakes corporate research services for key accounting and legal firms to provide accurate information on Chinese companies and their subsidiaries and has recently extended its range of reporting services to provide legal documents on Chinese companies as well as Companies Investigation Reports.

"From our Beijing and Hong Kong offices, we can supply Research Reports and Company Registration Documents on most Chinese companies, with personalised services tailored to each customer," Ashurst says.

The full range of offerings from Worldbox in China includes Credit Reports, Investigation Reports, Company Profiles, Legal Document Research including Memorandum & Articles of Association, Certificates of Approval, Capital-inspection report, Business licenses, Applications for change in registered information, Annual Inspection Report and extract from the Company Register document (e.g. information related to shares capital, legal representatives, registered office, financial statements). As well as Land Register in Shanghai, Panyu and Guangzhou.

Their investigation work often involves the retrieval of information that customers have not been able to find on the giant information providers they first turned to, including the likes of LexisNexis, who Worldbox works with to serve the search giant's customers that it cannot cater for by itself, launching their investigation processes on the ground, locally.

Ashurst says: "We maintain complete databases on the financial statements of Hong Kong-quoted companies as well as full details on their subsidiaries and investments. We are positioned between the expensive services who also use our information at times and the traditional business information companies like Dun & Bradstreet, Experian, and Graydon in the UK," he adds.

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The author of this article, Richard Powell, works for the global communications group, Presswire.