IT WASN'T ALL THAT

long ago that the hiring process began and ended with a job interview. That's no longer the case. Hiring in the 21st century now can involve reference checks, credit histories, education and professional background verifications, psychometric testing, medical and fitness evaluations, police records reviews, drug and alcohol screens, and immigration and terrorism clearances.

Here's a clue as to why: Although just 5% of workers admit to fibbing on their resumes, 57% of hiring managers say they've caught a lie on a candidate's application, according to a 2006 survey by CareerBuilder.com.

The importance of more elaborate screening methods was made clear again last week when Marilee Jones, dean of admissions at MIT, was forced to resign after the school discovered she had lied about graduating from the college she listed on her resume.

Obviously, the folks at MIT didn't think they needed to check Jones out when they hired her to work in the admissions office in 1979. But if they had, it would've saved the university (and Jones) a lot of embarrassment. "The simplest of background checks for $20 would have shown this MIT dean was lying on her resume 20 years ago," says Jason Morris, president and chief operating officer of EmployeescreenIQ, a background screening company based in Cleveland.

Of course, high-profile resume padding is nothing new. In 2002 Bausch & Lomb's chief executive, Ronald Zarella, was found to have lied about having a master's degree in business administration from NYU. Kenneth Lonchar, finance chief of Veritas Software, resigned in 2002 after the company learned he misstated his educational credentials, including falsely claiming to hold an MBA from Stanford. Sandra Baldwin, president of the U.S. Olympic Committee, left office in 2002 after admitting she lied about having a Ph.D. in English (she never actually completed her dissertation). And the list goes on.

Indeed, pre-employment screening is increasingly becoming business as usual for many businesses. EmployeescreenIQ started in 1999 with fewer than 100 clients. Today, says Morris, clients number "into the thousands." ADP Employer Services, a division of Automatic Data Processing, says it's seen the number of background checks performed quadruple across their client base. Last year alone, background checks increased by nearly one million, or 20%, over the previous year.

So what exactly does a background check entail? Morris says his company does everything from calling colleges to confirm an employee's GPA to checking how many speeding tickets they've racked up.

SmartMoney.com: How common is the kind of resume-embellishing this MIT dean did?

Jason Morris: For us it's the same old story. We've seen it a thousand times. Some years ago the same thing happened with the Notre Dame football coach. We see it on a daily basis. But it makes it into the media sometimes. It's something that happens a lot, especially in a tough job market.

Our stats, our in-house survey, show that about 56% of people lie on their resumes. It can be something like three months off [discrepancy] in dates of employment or $1,000 off in salary they report. With education background on a resume, people change their major to focus on something else. Say someone was a marketing major but they're going for a job where they need a business degree. So they say business major on their resume. Or someone was a sociology major going for a marketing job. They'll change that on their resume. They don't think anyone's going to check.

SM: What kind of screening services do you provide to your clients?

JM: We have our own call centers on site. That's all they do all day long; it's one of the main services we offer. A lot of companies say they do it on their own, but they don't. A resume is nothing but a sales tool. It's an opportunity [for a job seeker] to sell themselves to somebody. It's having a specialist do a specialized job. The simplest of background checks for $20 would have shown this MIT dean was lying on her resume 20 years ago. Verification of education and employment is done by telephone and fax. We get GPA information too.

SM: How often do you do criminal checks for a company?

JM: The most accurate way to do background check and there's a big misconception that there's a big database holding all the information in the country is to find out where people lived, went to school and worked using a Social Security number. We cover every address they've been associated with. We have a network of over 3,000 [contractors] who walk into court houses all over the country to find out if someone has a criminal record. All courts are public record, so we go to the source. We look up a name in the court computer, and see if you have a record there. By the way, this is not something we invented, this is the way the industry does it.

SM: How has your business grown since it started in 1999?

JM: Educating a client on why we should do a background check doesn't happen anymore. We typically don't take on a small business. We'd want you to hire five to 10 people a month. If you're hiring, you should be doing background checks.

Our business has grown due to a number of factors: First and foremost is the general acceptance of pre-employment screening as an integral part of the hiring process coupled with the heightened awareness that security plays on all of our minds.

SM: What else does a background check entail?

JM: It depends on what responsibilities a person has. People ask: What should I do if I'm hiring a secretary? It doesn't matter what level the employee is at. Some years back a secretary at Coke was caught trying to sell trade secrets to Pepsi.... In this case an administrative assistant has access to an executive's emails.

We always do a criminal search. That's the most basic. Second, we check their driver's record. We find tickets, DUIs, suspensions. Usually that's done more often when driving is a big part of their job. You're not looking for the person with one DUI, you're looking for the person with three DUIs. Then we'll do a credit report, pre-employment credit report. We go to credit bureaus. And of course, we're going to verify their education and employment.

SM: Is continuous screening or "rescreening" employers running background checks on longstanding employees commonplace?

JM: Yes, anytime someone gets promoted, we'd do one. A lot of companies do that.... Think of a business as your home. You're bringing somebody into your home and your life. You want to make sure they're the best possible person you're bringing into your life. If you have a company and somebody steals $200,000, it's OK because you're insured. But it's your reputation that's difficult to overcome.

A couple of years ago, it was discovered that the [chairman] of Smith & Wesson had a burglary record in the '60s. [In 2004 James Minder was forced to resign Your biggest liability in your company can be your employees.