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Overseas Job Candidates Redefine Due Diligence

June 8, 2005
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Background checks are an accepted part of the hiring process. But as the American workplace expands to include offices, service centers and computer networks in foreign countries, U.S. companies conduct such searches across borders and oceans with greater frequency.

    Almost four years ago, language in the Patriot Act required U.S. corporations to apply "reasonable" due diligence to foreign applicants. But experts say fear of common threats to business, not terrorism, has driven the demand for international checking in the past year.

    Traci Canning, director of international operations for HireRight, a background check firm in Irvine, California, says corporate needs vary, but the intention generally is to thwart "nefarious behavior around intellectual property, facilities or applications." Hiring the wrong individual or business partner can lead to embarrassing headlines, or worse. That’s something Citibank discovered recently after three thieves posing as customer service agents at a third-party call center in India smooth-talked bank customers in New York out of $350,000.

    Now, due diligence requires companies to get acquainted with the cultural and legal differences between a background search commonly performed in the U.S. and a more complex one overseas.

    Terrance Corley, president of Global Screening Solutions in Kennesaw, Georgia, says that the first thing companies should budget for is that searches in foreign countries take longer than in the U.S., potentially lengthening time to hire by as much as a month. One reason is the absence of standards in how nations store citizens’ education, criminal and credit records. Moreover, tighter standards may make getting them more difficult. Hong Kong and Singapore have restricted access for years. Authorities in countries that are still developing information systems may opt for tighter controls at the outset.

    Even when geography and computerized files make retrieval easy, data privacy laws may prevent them from being disclosed to a third party or sent out of the candidate’s home country. That poses a particular challenge in Europe, where a search must abide by a country’s laws and by regulations established by the European Union in 1998. And when results come back, more work can ensue to determine, for example, whether a candidate’s legal violation overseas is the equivalent of a misdemeanor or a felony in the U.S.

    Though the field is attracting new search businesses, a client company may never actually contact one directly. That’s because human resource management software vendors are integrating international search capability into their products and are partnering with firms with established networks of searchers in foreign countries. Corley says the convergence is promising, but that clients still need to ask detailed questions of a search partner to ensure that they comply with the laws of the country in which the search will take place.

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