What is an Employment Verification Letter, and When Should HR Issue One?

Our global workforce looks a lot different today than it did before the world gradually went into lockdown in early 2020. As businesses try to adapt to the post-Covid marketplace, they’re simultaneously trying to anticipate how the “new normal” will impact their recruiting and hiring processes.

A part of this new environment is the widespread adoption of remote workers as organizations try to tap into the significant cost savings that can be achieved with a hybrid workforce.

The intensive competition for talent and the torrid volatility of our current job market has only escalated the importance of employment verification in modern hiring.

As HR professionals try to understand the dynamics of this new job market, the steps involved in employment verification have never been so important, considering how our workforce has become so geographically dispersed. New HR technologies, including advancements in artificial intelligence and robust applicant tracking systems (ATS), are emerging to make the vetting process of new employees less risky and less time-consuming for HR professionals, including the steps involved in employment verification.

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Employment Verification Defined

Bad hires can be tremendously costly, especially in a job market that’s so hyper-competitive. Having to rehire someone after discovering they aren’t qualified for the job, after all, equates to approximately $50k or between 30–100% of the position’s salary. With such a significant amount of money and resources at stake, HR professionals and recruiters are being held to the highest levels of accountability for properly vetting job candidates beyond just reviewing their resumes — employment verification is a critical component of ensuring that accountability.

Employment verification, or verification of employment (VOE) as it is sometimes called, is a process that verifies the credibility of a candidate in terms of absolutes during the interviewing and onboarding process. Many organizations have an internal HR staff that can handle the VOE processes capably enough, though some organizations rely on third-party relationships to administer thorough employment verification steps and background checks.

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What is an Employment Verification Letter?

The employment verification letter is simply a one — or two-page document furnished by a former employer verifying a previous employee’s dates of employment and job titles while with the former employer. In most cases, these letters also provided details about the role the employee had while with their former employer.

Also called a “job verification letter” or “letter of employment,” these documents sometimes also provide information that’s a bit more comprehensive about the organizations issuing the letter, such as information about the industry they’re in.

Purposes

There are a variety of purposes that merit an employment verification letter — they’re quite common amongst auto lenders and apartment owners to ensure their applicants have the income to pay their monthly bills.

Mortgage lenders also use these letters to help them more accurately assess borrower qualifications. However, in the world of recruitment, HR professionals obviously have their own need for accuracy when it comes to assessing the employment history of candidates they’re considering for hire. The employment verification process isn’t always as easy as verifying things with a few phone calls. Employers can run into roadblocks if previous employers go out of business or if candidates show reluctance at any request to contact their previous employers.

The fact is that the employment verification letter can serve as an official source of information that comes directly from a former employer, and it eliminates any need for HR professionals to chase down former employers.

Ultimately, the endgame of the employment verification process is that it’s administered to reveal any inconsistencies between the real employment history of a job candidate and the information they furnish on their resume or on their application form.

What are the Components

While these documents are vitally important in verifying the work history of job candidates, an employment verification letter itself doesn’t consist of much more than a few basic bits of information. If you’re ever asked to prepare one, here are the key components that you need to include:

• Include the name of the company requesting verification
• Full name of the former employee
• Date(s) of employment
• Progression of job titles
• Description of Duties
• Employee salary
• Reason for separation/termination

Of course, you can find a swath of resources and templates online that suggest other elements be included, but the best strategy is to acknowledge specifically what was included in the original request for the letter.

*First published on Manatal.com.

*To read the full article, click here.

Manatal is an end-to-end recruitment and onboarding SaaS platform trusted by thousands of brands in over 135 countries worldwide. It is an AI-powered Applicant Tracking System (ATS) and Customer Relationship Management (CRM) tool that allows companies to hire faster, better and save costs.