The Growing Threat of Employment Fraud: Are Your Candidates Who They Claim to Be?

Employment fraud is no longer just an HR issue – it’s an enterprise-wide risk that threatens financial stability, regulatory compliance, and corporate reputation. As fraud tactics grow more sophisticated, organizations face increasing disruptions, data exposure, and legal consequences.Fraudulent hiring and fake credentials are major security risks for organizations. According to Upwork, an estimated 32.6 million Americans will be working remotely in 2025, which equates to about 22% of the workforce. The 2024 State of Hybrid Work study by Owl Labs reports that 1 in 4 workers are polyworking, with an additional 14% planning to start polyworking in the next year.

As reported by Forbes, ResumeLab’s 2023 Job Applicant Behavior Survey found that 70% of US-based workers admitted to lying on their resumes, making it harder than ever for businesses to verify candidates credentials. Additionally, the Ponemon Institute’s 2025 Cost of Insider Threats Global Report has reported that the financial impact of employment fraud has increased by nearly 95% over the past five years, with businesses spending an annual average of $17.4 million to combat these risks.

Fraudulent hiring and fake credentials are major security risks for organizations. According to Upwork, an estimated 32.6 million Americans will be working remotely in 2025, which equates to about 22% of the workforce. The 2024 State of Hybrid Work study by Owl Labs reports that 1 in 4 workers are polyworking, with an additional 14% planning to start polyworking in the next year. As reported by Forbes, ResumeLab’s 2023 Job Applicant Behavior Survey found that 70% of US-based workers admitted to lying on their resumes, making it harder than ever for businesses to verify candidates credentials. Additionally, the Ponemon Institute’s 2025 Cost of Insider Threats Global Report has reported that the financial impact of employment fraud has increased by nearly 95% over the past five years, with businesses spending an annual average of $17.4 million to combat these risks.

Fraudulent hires can:

• Disrupt operations: accessing critical systems, stealing proprietary data, or weakening security defenses.
• Trigger regulatory penalties: exposing companies to compliance violations and hefty fines.
• Damage reputations: eroding customer and investor confidence.
• Jeopardize safety: threatening employee and client safety – particularly in healthcare, critical infrastructure, and finance, where compromised credentials can pose direct risks to public safety and national security.

Deceptive applicants exploit hiring processes to gain access to organizations, putting financial, operational, and security stability at risk. After gaining access, these individuals exploit internal privileges, increasing the risk of cyberattacks and data breaches that would be challenging for external attackers to execute. In some cases, they may operate undetected for extended periods, exfiltrating sensitive data, compromising internal systems, and undermining business integrity before being identified.

Organizations lose 5% of revenue to fraud each year according to findings from the ACFE’s 2024 Report to the Nations. Additionally, organizations may face regulatory scrutiny for failing to prevent employment fraud. Failure to implement robust vetting processes can result in legal challenges, regulatory penalties, and lawsuits from impacted stakeholders, compounding the financial and reputational damage caused by fraudulent hires. These risks reinforce the need for enterprises to adopt proactive fraud detection and prevention strategies to safeguard operations, reputation, and compliance standing.

Fraudulent candidates and hires use tactics like:

• Fake credentials: falsified resumes, certifications, or employment histories.
• Fake identities: falsified or stolen identities to bypass verification.
• Deepfake images: altered images and manipulated video calls to reinforce fake identities.
• Manipulated online presence: fake online profiles and portfolios to lend credibility to their fake identities.
• Proxy hiring schemes: the use of third-party services, fake staffing agencies, or remote interview proxies to misrepresent qualifications.

Nisos research continues to reveal evolving fraud tactics that deceptive applicants use to infiltrate organizations, emphasizing the need for robust fraud prevention strategies. Intelligence-driven insights have shown how fraudulent actors manipulate digital platforms and falsify credentials to bypass standard verification processes. Recent examples include GitHub backstopping, where fraudulent applicants populate repositories with fake work histories, and online profile manipulation, where individuals build deceptive professional profiles to secure remote contracts under false identities.

To effectively combat employment fraud, enterprise leaders must embed prevention strategies into their broader risk management frameworks. Addressing these risks requires a coordinated approach that aligns with corporate security policies, compliance mandates, and HR best practices.

Collaboration across departments is also essential in tackling employment fraud effectively. HR teams, alongside legal and security departments, play a vital role in safeguarding against fraud. A cross-functional approach ensures comprehensive strategies are in place to detect, monitor, and prevent fraud at every stage of the employee lifecycle.

The best defense against employment fraud is a proactive, intelligence-driven approach.

Here’s how organizations can reduce risk:

• Advanced Background Checks: Use OSINT and identity verification to detect fake credentials and fraudulent applicants.
• Behavioral Monitoring: Track unusual access patterns, excessive data downloads, and security bypass attempts.
• Cross-Department Collaboration: Align HR, security, and compliance teams for a unified fraud prevention strategy.
• Threat Intelligence & Investigations: Leverage deep-dive analysis to stop fraud before it causes damage.

By leveraging intelligence-led threat detection, organizations can refine their hiring and verification processes, proactively identifying fraudulent activity before it compromises business integrity. With these advanced approaches, organizations can strengthen their defenses, reduce fraud exposure, and ensure compliance with evolving security and regulatory requirements.

Why Enterprise Leaders Choose Nisos to Combat Employment Fraud

Staying ahead of employment fraud requires a proactive and intelligence-driven approach. Nisos provides strategic solutions that align with corporate risk management and security priorities, ensuring that fraud detection efforts integrate seamlessly into broader security initiatives. Our fraud prevention solutions provide organizations with the intelligence needed to detect and eliminate deceptive hires before they pose a threat.

Nisos’s fraud prevention strategy combines intelligence-driven insights with proactive monitoring, offering solutions such as:

• Employment Risk Assessments: Detecting fraudulent credentials, hidden employment histories, and potential security risks.
• Proactive Monitoring & Intelligence: Identifying bad actors before they can cause harm.
• In-Depth Investigations: Conducting detailed investigations on heightened risk profiles.

By adopting these intelligence-driven solutions, organizations are able to proactively detect fraud, mitigate risks before they escalate, and maintain a secure, trustworthy workforce. These measures not only enhance security but also support compliance efforts and safeguard business integrity.

Strengthen Your Enterprise Security Against Employment Fraud

Employment fraud isn’t a distant threat – it’s already infiltrating organizations like yours, exposing you to financial, legal, and security risks. Without proactive measures, fraudulent hires can continue to bypass traditional vetting processes, putting your critical systems and data at risk. You need a partner who understands the evolving nature of these threats and can provide intelligence-driven solutions to stop them before they cause harm.

We offer specialized Human Risk Management solutions tailored to combat employment fraud and reduce risk from individuals inside and outside the organization. Our Employment Shield services are an analyst-led solution designed to identify and prevent employment fraud by assessing hiring risks, conducting deep investigations on high-risk individuals, and monitoring for ongoing threats. We also provide Insider Threat Intelligence services that are aimed at preventing data leaks and reputational risks – these solutions involve assessing risks, investigating suspicious activities, and continuous monitoring to safeguard against insider threats.

By leveraging our expert insights and advanced investigative capabilities, you can strengthen your security posture and guard against the growing threat of employment fraud.

Don’t let employment fraud put your company at risk. Strengthen your defenses with Nisos’s expert fraud prevention solutions.
Contact us today.

Frequently Asked Questions (FAQs) About Employment Fraud

1. What is employment fraud, and why is it becoming a bigger problem?
   Employment fraud happens when employees or applicants manipulate hiring processes using fake credentials, fake identities, or deceptive practices to secure roles they aren’t qualified for. As remote work and polyworking become more common, these schemes are easier to pull off and make it harder for companies to detect. The result? Increased risk to your data, your people, your assets and your reputation.
2. What are some signs that an applicant or employee might be fraudulent?
   Some signs or red flags include inconsistent resumes or work history, suspicious gaps in employment or generic digital footprints. When applying for remote jobs, fraudulent applicants may rely on deepfake images, proxy hiring schemes, or manipulated online profiles to make them appear more credible.
3. How can employment fraud impact my business?
   Fraudulent employees can gain access to sensitive information, leak proprietary data, and weaken internal security. This can result in financial loss, reputational damage, regulatory penalties, and even lawsuits from stakeholders.
4. Which industries are most vulnerable to employment fraud?
   Any organization with sensitive data, high regulatory requirements, or a remote workforce is at risk. Industries like tech, finance, government, healthcare and infrastructure are often targeted.
5. How can businesses detect employment fraud?
   Advanced background checks, identify verification, behavioral monitoring post hire, collaboration between HR, security and compliance teams, and deep dive investigations when risk indicators emerge are key to prevent fraudulent employees.
6. What is polyworking? How does it relate to employment fraud?
   Polyworking is when an individual holds multiple jobs at once, often without the knowledge of the employer. While not always malicious, in some cases it’s part of a broader scheme, where threat actors gain employment to carry out fraudulent activities, access sensitive data or support adversarial agendas.
7. How can Nisos help prevent employment fraud?
   Nisos helps you uncover the people behind the threat. Our analyst-led Employment Shield solutions go beyond regular background checks. By assessing hiring risks, conducting deep investigations on high-risk individuals, and monitoring for emerging threats, we provide you with the intelligence your team needs to make informed decisions.
8. How does Nisos help protect against insider threats?
   We offer Insider Threat Intelligence solutions designed to prevent data leaks and reputational risks. We focus on assessing individual risk, investigating suspicious behavior, and continuously monitoring for warning signs – helping you stay ahead of threats from within.
9. How common is resume fraud?
   More common than most people realize. A 2023 ResumeLab study found that 70% of U.S. workers admit to lying on their resumes – often about education, experience, or skill level.
10. Can deepfakes or AI tools be used in employment fraud?
    Absolutely. Fraudulent applicants can use deepfake videos for remote interviews, create AI-generated work samples, and fake developer profiles to build convincing but entirely fake identities. That’s why vetting resumes is not enough – you need to verify the person behind them.

About Nisos®

Nisos is a trusted digital investigations partner specializing in unmasking human risk. We operate as an extension of security, risk, legal, people strategy, and trust and safety teams to protect their people and their business. Our open source intelligence services help enterprise teams mitigate risk, make critical decisions, and impose real world consequences. For more information, visit: https://nisos.com.