India outsourcing firms eye employee screening

India’s technology firms plan to launch an employee registry program by mid-June designed to provide initial screening of tech workers for that country’s burgeoning offshore industry.

Interest in the security of India’s offshore providers may get more attention from U.S. employers following the recent arrest in India of three former call center employees of Mphasis BFL Group in Mumbai. The three are accused of defrauding four Citibank account holders in New York of more than US$300,000.

The National Association of Software and Service Companies in Delhi expects to launch a pilot program of an employee registry within two months. NASSCOM is a leading industry trade group.

As envisioned, the program would allow tech workers, either those with jobs looking for new ones or people trying to get one, to voluntarily register in the database, said NASSCOM Vice President Sunil Mehta.

The registry would be administered by a third party, which will hire a professional reference-checking company to conduct background checks on the workers. Employers will likely pay a fee to access the data, which can be released only with the prospective employee’s permission, said Mehta.

One of the problems Indian employers face is a lack of centralized databases that collect information, in much the same way a credit reporting agency can check someone’s credit records. But that is beginning to change. Last year, for instance, the Credit Information Bureau of India Ltd. was formed with the goal of providing universal credit checking across multiple financial services firms.

Twelve people were arrested last week in connection with the theft, and police are continuing their investigation. Jeroen Tas, co-founder and vice chairman of Mphasis, believes that the theft may have been result of someone getting the phone numbers of customers and calling them outside of Mphasis facilities to gain account access PINs.

“Clearly, it is important that we keep reminding everybody that they shouldn’t give out PINs,” he said. Mphasis doesn’t allow its business process outsourcing employees to bring in any media to copy files, and calls are monitored, Tas said, noting that reference checks did not turn up any problems.

Although “a large part” of the money has been recovered, he did not know exactly how much. “Some people have expressed concern about law enforcement in India,” said Tas. “I think this is a good example that it actually works very well.”

In a report last week, Forrester Research Inc. in Cambridge, Mass., said it believes that backlash over the incident “will undermine call center expansion by as much as 30%” in India, and bring calls for more regulation and security enforcement.

But Tas called the Forrester prediction “sensational” and said that what happened at his firm was a case of identity theft. “It has us very concerned, but on the other hand it happens here, it happens in the U.S.” John McCarthy, the Forrester analyst who helped write the report, said his firm’s prediction that the incident would hurt India’s business process outsourcing industry “was predicated on there being a backlash.”

But in an interview late Friday, McCarthy said he was surprised by the lack of reaction. There hasn’t been “page one” news coverage in major media outlets or calls from political leaders for tougher regulations, he said.

“It is either a delayed reaction or it shows you just how clearly offshoring is a nonentity,” said McCarthy, adding that he may revise the forecast if the incident continues to garner little attention from regulators and media.