Employment Fraud Isn’t Just A Risk - It’s A Threat

HR’s new reality

The nature of work has changed - and so has the threat landscape connected to it. With the dawn of remote hiring and digital-first workplaces, HR leaders now have to confront a new kind of challenge: employment fraud that is not only sophisticated, but alarmingly easy to execute.

It’s no longer enough to think of fraud as someone fudging a résumé or faking a reference. Today’s bad actors use AI, deepfakes, borrowed identities, and even outsourced labor to exploit gaps in the hiring process. As organizations continue to embrace global talent pools and distributed work, they may unknowingly be opening the door to individuals who are not who they claim to be, and who never plan to (or cannot) deliver the value they were hired for.

 

Identity Is the New Front Line

HR teams have always been tasked with finding the right person for the job. Now, they must also confirm that the person exists at all.

That may sound dramatic, but it's increasingly plausible in today’s digital hiring environment. A convincing résumé, a polished online presence, and a few well-rehearsed video interviews are often all it takes to secure a position. But what if the person behind the camera isn’t real, or isn’t working alone?

Synthetic identities, forged credentials, and even AI-generated video interviews are no longer rare. Some fraudulent candidates hire others to complete technical assessments. Others are part of coordinated efforts to extract income from multiple employers at once. These schemes don’t just hurt productivity or waste the time and energy of employers, they introduce serious compliance, legal, and security risks.

In some cases, nation-state-sponsored actors are involved. In others, it’s individuals attempting to juggle multiple full-time jobs or to subcontract their responsibilities. Either way, the damage is real, and more and more it falls to HR’s evolving scope of responsibility.

HR's Expanding Defensive Role

For many years, HR's primary responsibilities were people-focused: recruitment, retention, culture, and compliance. But now, HR has also become the first line of defense against digital fraud and insider risk.

Combating these threats requires a new mindset. HR leaders must work hand-in-hand with security, IT, and legal teams within their organizations to build a hiring process that not only assesses skills and fit, but also verifies identity, evaluates risk, and mitigates exposure to fraud. Thankfully, the next generation of HR leaders will not need to be forensics experts, but they will need to be aware, prepared, and empowered.

Because of the seriousness of these threats, waiting for a red flag to appear post-hire is no longer acceptable. The cost of onboarding the wrong person - especially someone with access to sensitive systems or information - is simply too high.

Weak Points in the Process

Employment fraud often emerges not from dramatic incidents, but from the gray areas of the hiring process. These areas include:
 

• Incomplete or rushed background checks
• Inconsistent interview formats
• Overreliance on digital communication and automated screening
• Failure to verify references or cross-check timelines

Add remote work into the mix, and the risk multiplies. When employees are never seen in person, operate on different time zones, and use personal devices, it becomes harder to detect irregular behavior. Fraudsters know this - and will use it to their advantage.

Some red flags may seem subtle at first, but should not be ignored. Some of the most common include:
 

• A candidate with unusually vague answers about their past employers
• Conflicting LinkedIn and résumé timelines
• References who are difficult to reach or overly enthusiastic without substance
• Publicly available social media profiles with duplicate pictures tied to different names

A Smarter Approach to Verification

To stay ahead of employment fraud, HR teams must go beyond the traditional playbook. That means implementing multiple layers of verification, especially those designed to confirm both identity and intent without eroding the candidate experience.

Consider building these verification strategies into your process:
 

• Multi-Touch Interviews - Conduct interviews across teams and roles. Multiple perspectives make it easier to spot inconsistencies in a candidate’s story or behavior. A person attempting to deceive may not be able to maintain the same narrative across several interactions.

 

• Technology-Assisted Screening - Use advanced background screening tools that go beyond surface-level checks. Some platforms analyze a candidate’s digital footprint, check for anomalies in work history, and even flag potential use of stolen or recycled identities.

 

• Multi-Factor Onboarding Authentication - Add verification steps to the onboarding process - such as requiring secure document uploads, identity verification tools, or real-time video ID confirmation. These measures aren’t invasive - they’re essential.

 

• Reference Vetting, Not Just Checking - Too often, references are called for formality’s sake. Instead, treat them as investigative conversations. Ask pointed questions about job duties, collaboration styles, and project specifics. Fraudulent candidates often use fake references or real people posing as someone else.

 

• Post-Hire Engagement Monitoring - In a remote environment, early warning signs often show up during onboarding. Is the new hire consistently evasive or unresponsive? Do they struggle to use tools they claim proficiency in? These can be signs that further review is needed.

Policies That Set Clear Expectations

Preventing fraud also means setting unambiguous boundaries. Employment policies should make clear what’s expected - and what’s prohibited - in order to maintain a secure, compliant, and trustworthy work environment. Some best practices to consider include:
 

• Remote Work Agreements: Clearly prohibit outsourcing job responsibilities or engaging in “polywork” (multiple full-time jobs) without disclosure.
• Device Management Rules: Limit system access to company-issued devices with pre-configured security settings.
• Role-Based Access Controls: Restrict access to sensitive systems and data based on an employee’s specific role and responsibilities.
• Behavioral Check-Ins: Schedule regular one-on-one meetings not just for performance reviews, but also to verify engagement, alignment, and presence.

Training the Next Generation

Today’s hiring challenges are tomorrow’s standard operating conditions, meaning that the HR playbook needs to be rewritten in real time. HR leaders must be fluent in digital hiring risks, data ethics, and the intersection of AI and employment. They’ll need to recognize fraud patterns, understand how deepfakes work, and know what to do when a suspected breach occurs.

That means investing in upskilling now: building digital security awareness into HR training programs, training on data protection laws - especially across different geographies, holding collaborative workshops with IT and security teams to create shared response plans, and crisis-response protocols that are understood by all, not just documented.

HR has always been at the heart of trust in the workplace. In the past, that meant resolving conflict, promoting engagement, and ensuring fairness. Today, it also means protecting the company from deception before it ever walks through the (virtual) door. Too often, fraud is seen as a problem for security teams to fix. But in reality, HR is the gateway. If the wrong person gets in, it’s already too late.

That said, as with all risks, the most effective strategy is prevention. This requires HR to evolve quickly. 

HR leaders have a history of knowing how to evolve and lead through change; building trust around people and systems has always been part of the job description. What’s needed now is the will to treat employment fraud like the strategic threat it is, and to collaborate across the organizations on the practices, policies, and partnerships that will keep the workplace secure.

Magen Gicinto is Chief People Officer at Nisos. Magen has over 20 years of experience in developing and executing strategic programs and initiatives that support the growth, engagement, and performance of the company’s employees, clients, investors, and mission.