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Who Are You Hiring? The Shocking Cost of Resume Fraud

Skye Schooley
Skye Schooley
Staff writer
business.com Staff
Updated Mar 21, 2022

Resume fraud can have a major impact on your small business. Learn how to identify and combat it.

You’ve probably heard the old saying “Honesty is the best policy,” but the rising dishonesty in the employment sector suggests this virtue has gone missing – at least when it comes to resumes. Starting with slight exaggerations and small white lies in yesteryears, job applicants today have gone beyond all limits with resume fraud thanks to the advent of high-tech scams. Now a mere enhancement in education credentials is only a minor fraud, as job hunters have gone as far as coming up with fake employment histories, job references, degrees and specialized licenses. As a small business owner, it’s critical to understand resume fraud so you can avoid being fooled. 

What is resume fraud?

Resume fraud, also referred to as resume inflation, occurs when a job applicant includes false or misleading information on their resume. For example, someone might be misleading on how long they were at a job by simply stating years instead of months and years, or they might falsify their previous responsibilities to make it seem they have more experience than they do.

Resume fraud is more common than you might think. ResumeLab found that 93% of people know someone who lied on their resume. Of those who lied, only 31% were caught; of those who were caught, only 65% were either fired or not hired. This means only 21% of people who lied suffered the consequences of their actions, which makes a pretty desirable case for liars.  

Indeed, lying on a resume isn’t a crime. However, some job seekers are taking it one step further by using technology scams to back up their false claims. Online services such as Fake Resume and CareerExcuse seem to be making the most of this trend. By offering “powerful underground guides” and showing job seekers how to “fill the gaps in your employment history,” these websites can help applicants add experience to their resume, rig their resume so it’s picked by top HR software that screen resumes, get fake references and so on. But that doesn’t mean it’s ethical to do.

FYIFYI: The top five things people lie about on their resume are job experience, job duties, employment dates, skills and salary.

How does resume fraud impact your business?

Applicants lying about their professional history and skill sets can have a significant impact on your business. It’s estimated resume fraud costs employers $600 billion annually. New hires without the specialized skills or experience they claim to have can cause a lot of problems for your organization, including reduced productivity and performance.

Without the proper knowledge required for the job, these new employees can make more mistakes, costing you time and money on completing projects the right way. This can result in other employees needing to pick up the slack, train the new team member or correct mistakes – all of which can lead to employee burnout and low morale.

If an employee lies on their resume and isn’t qualified for the job you hired them to do, it can go one of two ways: You train them or you fire them. Both options cost you time and resources.

Did you know?Did you know? The cost of a bad hire starts at 30% of their salary for entry-level employees. The cost is much higher for mid- and senior-level employees.

How can small businesses combat resume fraud?

It’s undoubtedly a daunting task to check up on references and confirm the accuracy of employee applications. But given the statistics, you shouldn’t take risks on this. The frequency and high-tech complexities surrounding occupational fraud these days make it more important than ever to be confident in exactly who you’re hiring. [Learn how to create a successful hiring process.]

Consider these tips for avoiding any blunders when screening applicants:

  • Use skills testing. Conduct skills testing as part of the interview process. For example, if you’re seeking a candidate for a graphic design position, have them complete a sample graphic design project for you. This is a great way to see if someone can complete the tasks as well as they say they can. You can offer to compensate them for their work. Think of it as an investment in improving your workforce.
  • Question the applicant about their previous employment in detail. When verifying employment history, ask the applicant about their previous responsibilities in detail. This can help you gauge whether they know what they’re talking about. It can also be helpful to ask about the months in which they began and ended working for a given employer. A date range of “2004-2005” may seem like two years of employment, when in truth, it could be just two months. 
  • Research their references. Research the applicant’s references to ensure they are who they claim to be. In the digital era, nearly everyone has some form of online presence you can find. When you contact references, ask about the employee’s time with the company, including duration of employment, responsibilities, and strengths and weaknesses. 
  • Contact previous employers. Directly contact previous employers for verification. Don’t trust any “800” numbers, as they can be fake references. Always independently verify phone numbers.
  • Verify education with institutions directly. While verifying education and training, confirm the certifications as well as attendance directly with the institution. In addition, check to make sure the institution is accredited and not just a degree mill. Also verify licenses with the state agencies that issued them.
  • Check social media for consistency. Turn to social media platforms, like LinkedIn, to verify resume consistency. Does the applicant list the same colleges and companies? Are the dates and titles the same? It can be hard for people to keep their lies straight across the board.

FYIFYI: You may also want to review the applicant’s social media to assess whether they’d be a cultural fit for your organization.

If you or your HR department doesn’t have the time or experience to thoroughly check all aspects of the applicant’s resume, you should not forgo the verification entirely. Instead, enlist the assistance of an employment screening company. Employment screening companies have resume fact-checking experience and are up to date on all of the latest trends in resume fraud. You can outsource as much or as little of the applicant screening process to a third-party background check provider as you want in order to be confident that you have done your due diligence before hiring a candidate.

Take some time to know who you’re hiring. If you don’t do your homework, you could end up paying a hefty price.

Marc Bourne contributed to the reporting and writing in this article. 

Image Credit:

fizkes/Shutterstock

Skye Schooley
Skye Schooley
business.com Staff
Skye Schooley is a staff writer at business.com and Business News Daily, where she has written more than 200 articles on B2B-focused topics including human resources operations, management leadership, and business technology. In addition to researching and analyzing products that help business owners launch and grow their business, Skye writes on topics aimed at building better professional culture, like protecting employee privacy, managing human capital, improving communication, and fostering workplace diversity and culture.