2016 was a tumultuous year for financial services and screening. New regulations meant more scrutiny on employees, particularly those in senior positions. Since the stricter regulations have come into force, the background screening process has been in the spotlight. Re-screening is now a requirement at certain levels, new conduct rules have to be adhered to, and senior managers face more scrutiny. Knowing who you are hiring is of utmost importance.
Our latest report on the key challenges and trends for financial services businesses in the year ahead revealed some unsurprising results. Regulatory concerns are the top issue for firms in the year ahead, and risk management also features in the top three. These results emphasise the concern the FCA regulation is causing firms when hiring new talent, or checking existing employees. Failure to comply can result in some major repercussions for businesses, so what can you do to reduce the risks to your business?
We summarise the key changes and how to address them in our whitepaper, ‘Regulation Ready’. With input from industry experts we look into the global implications, how to deal with any information discovered, and best practice for compliance.
Aside from the regulatory concerns, Brexit is looming large and will have a huge impact on financial services in the UK and beyond. From concerns over UK recruitment, to the complexity of screening post-Brexit, see our blog to find out more about how Brexit could impact background screening.
Challenges in screening
It’s not just the business challenges that differ. We’ve already spoken about the key concerns in background screening for the year ahead, but the picture changes when we look at financial services.
Whilst time to hire remains the top concern, improving efficiency jumps ahead of candidate experience for financial services firms. 40% named it as a significant challenge, with 53% stating that making HR processes more efficient was a top investment priority for 2017. This could be a result of the stricter regulation placing more pressure on recruiting teams. A robust and thorough screening process is a necessity, particularly with more regulation to adhere to, but with a demand to hire quickly, teams need to find a way to get their processes as smooth and efficient as possible.
There are many ways to ensure there are no delays with screening new or existing employees, and a lot begins with education. Keeping candidates informed of what is required of them, including the documents and information they will need, is key in ensuring there are no delays and allows them to prepare ahead of time. It is also vital to emphasise to them the importance of being honest, as even an innocent error in employment dates will be flagged and can cause unnecessary delays in the process.
Further findings show that 49% of the financial services HR staff we asked plan to invest in finding qualified job candidates, and 51% want to invest in keeping good employees, so the issue is not just restricted to the screening process. Teams need to find ways to not only get them through the door quickly, but find them in the first place. In such a competitive job environment, the top talent is often snapped up quickly, and your best staff may be enticed away.
Solving the problem
Whilst the screening process in financial services is improving due to the tighter regulations, issues are still rife. 78% admitted they have found issues when screening that otherwise wouldn’t have been found. Whilst these issues are most commonly found at junior level, 29% of firms we asked said they had discovered issues with senior level staff, and 23% saying it is even possible that members of their board have never had their qualifications, experience and criminal records checked.
A robust screening process is essential to make sure these issues are discovered before an unfit candidate makes it into your business. Avoiding a bad hire is vital, as the wrong employee can have a significant negative affect on your business, and sometimes the damage cannot be truly seen until they have left.
Financial services and background screening has seen a lot of change, and the impact of the new regulations is still yet to be fully discovered. The key for businesses in the industry is to stay on top of best practice, ensure their processes are thorough, and keep staff and candidates informed to keep the delays in the process down to a minimum. Communication is key in screening, by improving that, HR teams may make the efficiency gains they seek.
For more, download your free copy of our Financial Services Focus: 2017 HireRight EMEA Employment Screening Benchmark Report.