It's that time of year again: for the incoming class of summer analysts, many of you are going through the (depending on what you've been doing the last semester or so) potentially nerve-wracking process of background checks. And judging by the slew of recent posts, there are a fair number losing sleep over background checks.
With that in mind, let's just clear everything up: the majority of the larger IBs (both boutique and BB) use third party organizations to conduct background checks. Typically, you provide the bank a list of references and contact information, which will then be independently verified via telephone by the third party organization.
So how do these phone calls work?
The average call goes as follows:
"Hi [insert your reference's name], my name is [name] calling on behalf of [BB / boutique bank] to verify the employment history of [your name]." Here's where the questions come, "Can you please confirm that [your name] was employed from [reported start date] to [reported completion date] as a [job title] in [job location]?" After receiving verification, most agencies will follow up by confirming your reason for leaving (i.e. layoff, resignation, termination, etc.). That's it!
With that in mind, I will address a few frequently asked questions about background checks:
1) Will the third party firm verify each bullet point on my resume?
In short, no. While you should never blatantly lie on your bullet points (it will likely be exposed during your interview process), it would take 20 minutes to verify every point on your resume. Background checks do not involve a line-by-line verification.
2) My GPA dropped after poor performance during one / both of the last two semesters, which makes it lower than what I put on my resume, will my offer be rescinded?
No. It comes as no surprise to anyone that your GPA dropped during recruiting season / junior / senior year. It's your responsibility to accurately depict your GPA as of the latest completed period (typically as of the end of your sophomore year, for junior year recruiting). However, any changes that occur thereafter will not affect your offer status (barring, perhaps, a complete and utter meltdown of failing grades).
3) I realized that I made a mistake about my employment dates. Should I inform HR? Will my offer be rescinded?
First off, incorrect employment dates is something that the third party organization will likely notice, so it's in your best interests to correct the error. That said, assuming the error was made in good faith and doesn't materially change your experience, you will be fine. My advice is to bring it to the attention of HR and explain the mistake.
4) I rounded my GPA up to the nearest tenth, but my transcript shows my GPA to the hundredth place. Will my offer be rescinded?
For goodness sake, no. Honest rounding will not cost you your offer.
5) Should I inform my references ahead of time to anticipate the call?
Definitely. This is a best practice. You want prevent your references from screening the background check call and it's best that your reference not be totally caught off guard by the call. Nothing is more strange than randomly receiving a call from someone asking about a former employee. Let your contacts know before you submit their contact information.
Good luck, and I hope you all enjoy your summer! Happy to answer any other questions you may have.
Haha s/o to me on Q3! Thanks for this post - it's really useful, and will save future peeps a lot of worry.
Let's say an employer doesn't use a third party. Would the above comments still hold?
Also not specific to IB, but let's say you're a lateral hire with some experience, can you list coworkers that are on a similar level or slightly higher/lower as references even if you didn't directly work for them? (Assuming you already provided manager contacts and it's for background check post-offer)
Everything should still hold, regardless of who conducts the background check. Your former employer exposes itself to potential liability by answering questions related to specific performance.
Better to list someone who is at least one level your senior, to whom you reported with some regularity. Listing a peer would be unusual.
+1
6) "In college I was arrested for XYZ....will this show up" Ask an attorney familiar with the issue.
Please do this. Sometime the background checks use an automated greeting, which everyone hangs up on. Very annoying when one of your SA isn't cleared to start a week before training begins. It's a good networking excuse as well, presumably you got along with your references and it never hurts to have them know what you are up to.
I recently received a FT offer to work for a large buy side firm. The background check has been a huge pain in the ass to say the least. It's already pushed my start date back by a week. I have close to five years of work experience so my background check process is going to differ from someone coming straight from undergrad.
The 3rd party performing the background check is a company called HireRight. I've never seen such a thorough background check before. Unfortunately, this company moves at a snails pace as the process has been going on for 8 fucking days. I have absolutely nothing to hide on my resume so I have no clue why it has taken so long other than the fact that this company is probably vastly understaffed. I had to submit W2s for each of my last five years of employment at a previous firm prior to the F50 role...why they can't pick up the phone and call my hold boss or HR manager is beyond me. Then they came back to me and wanted pay stubs as well...They also verified my current F50 salary as well as my last salary in a previous role at a different firm. They did give me the option for not allowing them to contact my current employer which was the one and only benefit from the process.
So, be forewarned monkeys. Background checks have evolved into an upside down cavity search.
ChoicePoint is similar.
I crushed my last few assignments in order to bump my GPA toa 3.86, or 3.9 for resume purposes.
in the event that someone fails their background check, would the bank bring in one of the people that they rejected? has this happened before? just curious.
I don't think there is such a thing as "failing" a background check. Have never come across someone who has been through this, but likely the third party organization would flag your profile and you should expect to hear from HR. Assuming it is an honest mistake, you'll be fine.
Contrary to what paranoia would have you believe, these guys aren't trying to get you fired, they are just covering their bases.
This is an anomalous situation, but we recently were looking to hire a couple lateral analysts. One guy interviewed well and was extended an offer. A couple weeks later, I was in my staffer's office working on a deal when he took a call from HR. It turns out the kid had 1 DUI on his record from while he was in undergrad; subsequent to us extending him an offer he got another DUI. We pulled the offer and replaced him with another candidate.
Tl;dr a candidate had 2 DUIs we didn't know about and we hired someone else instead. So I guess it's possible.
+1 very helpful
Do we have to note which courses correlate with which courses listed on our resumes?
No, they will never go into this level of detail.
God an applicant could troll the shit out of this. Good post.
Could you do the same for drug tests?
Specifically, what should I do to pass my drug test if I have been a meth addict for 8 years?
No judgment here. Stop using. It's a good start; then do a complete detox for a few weeks.
Meth will be out of your system quick, stop using asap, drink and sweat a lot for one to two weeks and you should be okay. The most important, and hardest, part is going to be stopping immediately. I'd recommend benzos and just straight sleeping for three days to avoid wd's then a week or two of sobriety and detox.
Don't do any meth for a good 3-4 weeks prior to the drug test and do your best to stop completely once you start the role. Sounds simple, but best advice.
Good stuff, Northsider. It hardly ever gets more complicated than "Did they work here and how much did they make?"
What about things school related such as education and extracurriculars. Should I let undergrad office and presidents of my organizations knoow
They generally do not call references for student organizations or your school. They will ask for a copy of your official transcript.
Thanks northsider.
Only happened once but being the president of a club I had a reference call from an organization checking on a particular executive's involvement with said club. Needless to say it couldn't have caught me more off gaurd. Hope he got the job.
Just to clarify, after you've submitted your official transcript, they will ask your university for another set of transcript? What is the point of asking you to submit the transcript in the first place then?
Out of curiosity how often is employment verified via tax information (e.g. pay stubs etc) as opposed to just a normal phone call? If a potential employee doesn't list a prior salary and refuse to provide salary information how does that affect his/her candidacy?
Thats more than it takes to obtain a US secret security clearance lol.
interested to know whether there is a pretty much indentical prcoess in the UK or something different?
Should I expect that they will check the level of saving on projects that I led over my previous employment?
I've been asked for paystubs or tax forms to verify pay and time of employment. As for DeltaHedge's question, depends on if you piss them off. Personally, if I've filtered through 200 candidates for a position, and 3-4 are relatively indistinguishable, I'd be willing to ding someone for failing to provide requested data.
If you earn a FT offer after being an SA, do you have to go through this background process again? Is it even worse for FT? BB IBD SA this summer from target school. Would like to enjoy my senior year and the rest of this semester before coming to NYC and don't want a .3-.4 drop in my GPA to matter.
It won't matter. Yes, you have more background checks (not the least of which is FINRA's check for your securities licensing), but no one is going to scrutinize your GPA movements. Have a good senior year, stop fretting the background check.
Does anyone know when this takes place for returning full-timers?
the bank i am working at uses Hireright, does anyone know what kind of information they pull? TIA
Same as in the original post.
Agreed with above. However, they do ask for paystubs/W2 in the event that they can't reach your employer over the phone.
Holy hell, going through the background checks now, so many different groups asking for reams of paper. Makes me double glad that no one's ever found out about those hookers in Vegas.
how do they verify self-employment?
probably tax returns
and so if you didnt report it on your tax return, youre screwed?
deleted
What about volunteering for a company? Won't have W2.. how to verify times?
Via your references.
My background check status changed to completed 2 weeks ago and I havent heard anything from the third party company or HR, should i assume im cleared?
Yes, unsurprisingly, they verified that you didn't completely fabricate employment on your resume.
whew! that was a close one lol
Northsider how do you know all this or are you just assuming/common sense? Also are you on WSO at work? is that allowed!?
Been through multiple background checks through internships / full-time roles. Once you know how the process works, the answers to these questions becomes fairly straightforward. Very few offices block WSO, and you can usually find analysts at banks across the street on the forums from time to time.
To agree anecdotally with Northsider, when I was waiting to quit my job and avoiding new projects, I spent a lot of time on WSO. Now that I'm at home waiting for the new job to start, I haven't been on in a while.
Will they check to make sure you didn't lie about your race and gender?
When the system online shows that "background check is complete" does that mean everythings good to go?
No, it means that they have reported their results to your bank. If you don't hear from HR within a reasonable amount of time, you're good.