The Importance of Due Diligence within Recruitment 

by Jun 29, 2023All Posts, Recruitment

Identity crimes costs Australia over $1.6 billion per year (Australian Federal Police, 2022), with identity fabrication and manipulation a common occurrence within recruitment. If businesses fail to initiate adequate due diligence upon the hiring of new employees, it can have substantial monetary, psychosocial and/or legal consequences. 

Due Diligence in Context 

Due diligence refers to the taking of reasonable steps to avoid a negative or harmful response to others and/or their property.  In the HR context, this refers to employers making reasonable efforts to vet potential candidates thoroughly. Done properly, due diligence verifies the resume content of a job candidate, providing an educated and informed decision for selecting the most suitable candidate(s).. This is often achieved through background and reference checks, interviewing strategies, and pre-employment and profiling assessments. 

Repercussions Should Employers Fail to Conduct Due Diligence 

The most common occurrence for employers that do not conduct qualitative due diligence is the realisation that the recently hired employee has fabricated skills, experiences, and references on their resumes. In addition, the lack of due diligence allows for false understandings of employee character, and this can result in theft of confidential information, or physical and intellectual property. All instances can greatly damage the reputation, production and income of a business.  

Reasons to Conduct Qualitative Due Diligence 

Each industry differs in workplace legislation and requirements for compliance. An effective due diligence process safeguards employers by ensuring that all new hires meet these requirements as a minimum. Therefore avoiding imposed penalties, investigations of negligent or vicarious liability, and legal proceedings. It is reassuring to potential candidates to see you conducting your due diligence, and you are more likely to receive an acceptance from the right candidate if they feel assured of your Company policy and process. Respectively, it demonstrates employer effort to assure that there are no conflicts of interest amongst potential employees and provides your HR with accurate data when reviewing for candidate selection.  

Do not conduct the recruitment process on face value alone, take the time to implement strategic planning and due diligence to determine and fulfill your exact workplace need. The AHR Team can advise and show you how to start and approach this, or we can do this on your behalf. We can provide assistance within any stage of the recruitment process, from strategic planning, advertising, through to interviewing and assessment profiling processes. Call the AHR team today on 1800 577 515 and allow us to take your recruitment and due diligence stress away! 

Australian Federal Police. (2022). National identity fraud awareness week.  Commonwealth of Australia.

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