By Kyle Condon

Definition of Due Diligence:

“Due diligence is the investigation or exercise of care that a reasonable business or person is expected to take before entering into an agreement or contract with another party, or an act with a certain standard of care. It can be a legal obligation, but the term will more commonly apply to voluntary investigations”. {Wikipedia 16 January 2020, at 12:53 (UTC)}

What is important when conducting due diligence in HR:

It is in any company’s interest to conduct due diligence whether it is employing potential candidates or signing legal documents with potential vendors and/or partners.

Below are some important points to look into when conducting due diligence:

Recruitment process:

Recruitment of potential employees essentially starts when an add is placed for a vacancy to be filled. Listed below are some of the points that should be looked into when considering potential candidates:

  • Are there any spelling mistakes made on the CV?
  • Does the ID number reflecting on the CV correspond with the ID number reflecting on the ID document?
  • Does the ID belong to the candidate?
  • Are there any employment gaps and, if so, why?
  • What is the candidate’s residential address – this would be important to look into when it comes to the candidate’s ability to travel to and from work on a daily basis.
  • Is the candidate over qualified for the position advertised?

It would always be in the company’s best interest to conduct criminal record checks, qualification verifications, past employment/reference checks, credit bureau searches and ID verifications before employing a potential candidate in order to ensure that there is no substantial information found.

Employee personnel files:

It will always be beneficial to the company to have updated employee personnel files on current and past employees. Below are some important points to keep on file:

  • A copy of the employee’s ID, CV and qualification certificates.
  • Any background screening verification reports i.e. criminal record reports, qualification verifications, past employment/reference checks and credit bureau searches etc.
  • The signed contractual agreement between the company and the employee, this would include the contractual agreements between the company and temporary employees.
  • Salary details, including any increases, bonuses etc.
  • The employee’s positions held in the company i.e. was the employee ever demoted or promoted.
  • Record should be kept of the amount of leave days requested and how frequently leave is requested.
  • Record should also be kept of any disciplinary action taken against employees, this would include notes of verbal warning, written warnings and/or disciplinary hearing minutes and outcomes.
  • Record should also be kept on the employee’s time keeping, performance etc.

The above information would come in handy should another company request to conduct a past employment/reference check or when the candidate’s performance is reviewed.

Due diligence into potential vendors:

What to look into when considering to enter into a business relationship with an outside vendor:

  • Is the company registered?
  • Are any of the directors/members politically compromised?
  • Does the company’s registration number exist?
  • Does the company’s VAT registration number exist?
  • Does the company have an official email address and landline number that is registered to the company?
  • Does the company have a registered address (a site visit would be recommended at this stage in order to ascertain if the company runs its business out of a residential address or if they have an actual office building?
  • Be very aware when gmail or yahoo email addresses are provided.
  • What is the company’s annual turnover?
  • Does the company have a high staff turnover?
  • Does the company have any reputable trade references?
  • Is there any negative reviews or media content available?

It has been and will always be beneficial for any company to conduct due diligence before employing a potential candidate or forming a business relationship with another company as this would ensure that the company is aware of what they are getting into.

Call me for further information pertaining to our due diligence services.

Kyle Condon


Searchlight Background Screening & Criminal Record Checks

082 820 5363

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