Credit Reference Checks Made by Hong Kong Employers Jump by 8.1%

TransUnion (NYSE: TRU), a global information and insights company, and Sterling RISQ, a leading background check and identity screening firm, have announced new data and insights revealing trends around Hong Kong employers using financial probity checks during the recruitment and compliance process. Figures from TransUnion show the number of employee reference enquiries requested by employers during the recruitment process in the first quarter of 2021 recorded a 8.1% year-on-year increase, indicating potential signs of a recovery from the negative impact of COVID-19 on the job market.

As a part of background checks on potential employees, employers may examine the financial background of a potential candidate, including their payment, debt and bankruptcy records. In certain highly regulated industries such as financial services, banking and insurance, conducting these checks is often a compliance issue for employers to assess whether the preferred candidate meets the regulatory requirements for working in their industry. The check can take place at the point of hire as well as throughout the entire employee lifecycle through the process of rescreening.

In Hong Kong, around 80% of employee reference requests include credit checks, according to Sterling RISQ. Credit checks are increasingly embedded in the talent recruitment and acquisition process across multiple industry sectors, regardless of seniority and salary. Though it is primarily mandatory in the financial services industry, more employers across markets, industries and management levels have introduced these checks in the last decade.

While credit checks are more common in senior-level recruitment, the same check is increasingly being conducted for front-line positions such as bank tellers, traders, relationship managers and mortgage brokers.

In recent years, roles with access to sensitive proprietary, financial information, or even those holding some form of monetary responsibility such as IT, HR, accounting, and secretarial, are now likely to require a credit check.

“Credit checks are becoming a reliable reference source for employers evaluating a potential candidate, serving as an indicator of their trustworthiness. The risks are perhaps becoming too big for recruiters to ignore.” said Irene Foo, Director, Consumer Interactive at TransUnion. “For job hunters, it is very important to maintain a healthy credit record by repaying loans on time, not over borrowing and not just making the minimum repayment, even during difficult times like under the pandemic. Maintaining good credit behavior for around six months may already raise your credit score, improving your chances of securing a desired job position.”

“Having a good credit score is extremely important, especially for those taking up financially related roles. It provides employers with the assurance that the candidate is financially healthy, and able to protect the integrity of their position. It also creates a safe working environment for the workforce and minimises the risk of internal fraud which costs companies billions annually,” states Elizabeth Fitzell, Managing Director APAC at Sterling RISQ. “In most locations in Asia Pacific, including Hong Kong, companies will consider withdrawing a job offer based on a negative financial probity check.”