Candidate fraud: From hiring hurdle to business threat

Amid the adoption of GenAI by both jobseekers and employers, a disturbing new trend is emerging, writes Jasleen Kaur.

Everyone wants to put their best foot forward when applying for a new job. With more people adopting generative AI (GenAI), résumés and cover letters have never been more polished. Gartner research indicates 39 per cent of candidates admit to using GenAI to some extent during the hiring process.

While embellishing a résumé isn’t new, a darker side is emerging. Recruiting leaders are increasingly concerned about candidates using GenAI tools to deceive employers when they don’t have the right skills or qualifications. Improvements in GenAI-created text, image and audio (deepfakes) are enabling this activity. Gartner predicts 25 per cent of candidate profiles globally will be fake by 2028.

In the past 18 months, several companies unknowingly hired remote workers from sanctioned countries like North Korea. AI was used by these organised criminals to apply for jobs by creating fake identities with stolen or false information and to mask their location. Laptops supplied by their new employer were then used to install unauthorised software to gain access to critical systems and steal data.

This is just one of a growing number of instances where unscrupulous jobseekers have used AI to mask their location, conduct deepfake interviews or submit fake documents. While international espionage is at the far end of the scale, fraudulent candidates pose a wide range of legal, financial and cyber security risks to organisations.

As the use of GenAI becomes more widespread, recruiting leaders must combat the rise of candidate fraud. This means strengthening the screening process to ensure they know exactly who they’re talking to. This will go a long way in preventing employment offers from ending up in the wrong hands.

Start early in the recruiting process

Many organisations still use manual background checks as part of their recruiting and onboarding processes. These traditional verifications are ill-equipped to uncover fraud as they often happen in later stages of hiring and rely on candidate-provided identity data. By this stage, the damage may have already been done.

Gartner research shows that only 7 per cent of recruiting leaders are using identity document validation software during the recruitment process. It’s vitally important that automated identity verification (IDV) technology is deployed early in the process to detect candidate fraud.

At their most basic, IDV tools combine a photo ID and a selfie to confirm a real identity exists and belongs to the person using it. IDV capabilities also often include location intelligence to assess the location of a user’s device and correlate it against the presented ID. This helps strengthen background checks and ensure a candidate is who they say they are.

Introducing these tools early provides a timely solution and helps to avoid costly mis-hires. These technologies are simple to implement, enabling users to complete the ID process via a smartphone, laptop or tablet.

By integrating IDV at the video interview or testing stage, organisations can detect false identities before access to sensitive information is granted. This reduces compliance risks and demonstrates a commitment to secure hiring practices.

Due to the sophisticated nature of candidate fraud, a single instance of verifying identity may not be sufficient. Strengthen existing screening processes by cross-referencing résumés against background check results, conducting a social media screen for consistent digital identity and requesting work samples.

Partner with other teams

While the HR function serves as the first defence, it can’t solve the problem alone. Despite the best efforts of the team, they won’t be able to catch every instance of candidate fraud.

This is why collaboration between other teams is vital. Leaders across HR, cyber security, IT, and legal should work together to understand the verification capabilities already in use across the organisation.

While internal technology experts can monitor ongoing identity anomalies during onboarding, legal counsel can determine where in the recruiting process is best to verify identity to minimise the possibility of hiring discrimination.

In addition, a broader organisational strategy should be introduced between the heads of departments. Together, they can co-create a culture that recognises and prioritises fraud mitigation.

Just another part of the hiring process

The rapid adoption of GenAI tools, coupled with global instability, economic uncertainty and a desire for higher wages, will motivate candidate fraud to continue.

To attract the right candidates, clear communication from the outset is essential. Candidates aren’t the only ones using GenAI, so it’s important to transparently outline the organisation’s GenAI use policy to candidates in the recruiting process.

Also, consider evaluating candidates on their ability to complete tasks both with and without GenAI assistance to get the best understanding of how they will perform in the role.

With a multi-layered mitigation strategy in place and robust recruiting processes, candidates and employers all benefit and become more resilient.

Jasleen Kaur is a senior principal in advisory in Gartner’s HR practice.