What candidate fraud is costing staffing firms, and how to stop it

Almost a quarter of hiring managers report losing more than $50,000 in the past year to hiring or identity fraud, and one in ten put the loss above $100,000, according to a recent Checkr survey. For a staffing firm operating on margins, losses like that hit twice: once in the screening and onboarding budget, and again in the client relationship when a fraudulent hire surfaces on their site.

At Activus Connect, a staffing and customer-service outsourcing firm, candidates were applying, interviewing, and clearing steps in the hiring process, only for someone different to show up for new-hire orientation.

Scenarios like this rack up screening costs and training hours on a candidate you will not hire or keep onboard. Then add the cost of starting over after fraud occurs. Stopping fraud early—and saving your team and your client's time and money—starts with knowing what a background check catches and what it doesn't.

Background checks are central to any compliant, strategic hiring program. Done well, they screen qualified candidates in and fraudulent ones out, while helping you meet your compliance and risk obligations. Depending on the client and role’s requirements, background checks can provide reports on relevant information about a candidate's history: criminal history, employment, education, credentials, drug testing results, and more.

However, a background check runs based on the SSN and identity information provided. The background check doesn't tell you if that identity belongs to the candidate on the screen or standing in front of you.

Identity verification (IDV) is the fraud detection screening built to close that gap before it opens. IDV matches a live selfie against a government-issued ID in real time, confirming the candidate is a real person, holding a real ID.

The most effective, comprehensive screening partners enable staffing teams to automatically trigger IDV early in the hiring process, before a candidate even reaches the background check stage, saving teams time and resources.

In practice, IDV helps you ensure that the checks you run are associated with the real person who was hired for the job, catching an impersonation attempt before a firm spends interview time, training hours, or onboarding costs on someone who isn't who they say they are. Document and resume verification catch a different kind of fraud even earlier: a fabricated credential or an AI-generated resume that shouldn't have made it through the funnel in the first place.

Closing that gap early is where the savings compound. Catch a fake candidate with identity verification, and a firm never wastes interview time, skills-test proctoring, background check fees, or onboarding hours on someone who isn’t who they say they are.

Growing responsibility and flat resourcing mean every tool you bring on board needs to meet high efficiency standards. Cost-effective, automated fraud-detection screenings that catch a fake candidate before a firm invests in the rest of the funnel are one of the few ways to expand screening capacity without adding headcount.

Before your next placement, add up what the last fraudulent candidate cost:

That number is the case for screening earlier, multiplied by the number of placements you're accountable for each quarter. You can make that decision on your next placement. Verify identity first, and the screening you pay for is tied to the real professional your client will welcome to their team.

Checkr's fraud detection suite seamlessly adds identity verification, document and resume verification, and progressive checks to any comprehensive staffing background check. Every screening runs through one dashboard and mobile candidate portal, making it easy for qualified, verified talent to move quickly through your funnel. 200+ integrations and customizable packages make it easy to complete consistent, centralized checks for every role and client.

For staffing teams, switching to Checkr means catching fraud before it turns into a lost placement, a wasted budget, or a strained client relationship.

Kristen Ditsch

As Solutions Marketing Lead, Kristen researches the impact of the Checkr product and ensure our teams are set up to provide the greatest value to our customers. Kristen has built customer-centric marketing programs at enterprise technology companies in cybersecurity and process automation.