ClearStar floats the idea of CV screening for all

ClearStar floats the idea of CV screening for allA company that checks whether job applicants are lying on their CVs is floating this week on London’s AIM, bringing to more than £2.4 billion the money raised on the junior market in the past 12 months — almost three times as much as the year before.

ClearStar, which is based in Alpharetta, Georgia, is the first US business to come to AIM this year and will begin trading next week.

The company is looking to expand into the less developed British and European markets. In Britain, it has long been possible for people to tell a white lie, or even a whopper, when handing in their CV into a potential employer. Talking up a university degree, inflating a former job title or forgetting to mention a criminal record in an interview has been a low-risk gambit when landing a plum job.

However, in the US it is much more difficult to slip through the net, with 90 per cent of all but the smallest companies using CV screening services to weed out inappropriate applicants.

ClearStar has raised $15 million (£8.7 million) and expects to have a valuation of $35 million with Cenkos, which handled the AA float, advising.

Eighty-two companies have floated on AIM in the past 12 months compared with 46 the year before, according to UHY Hacker Young, the accountancy group, raising £2.4 billion, the biggest year for IPOs since 2007-08.

AIM has also made a net gain of 12 companies listing in the past year, the first time it has grown since before the credit crunch. Last year it shrank by 38 companies and has made a net loss of 759 companies since 2006-07.

The biggest IPO on AIM in the second quarter was Safecharge International, the provider of payments services for online businesses, which raised £75.5 million. Other high profile floats have been Boohoo, the youth online fashion retailer, and Patisserie Valerie, the café chain.

ClearStar was founded by Robert Vale and Ken Dawson 19 years ago and established a CV checking technology that has been used by other companies that work with employers. Its platform conducted 5.6 million screening checks on 1.7 million people in the US last year, on behalf of 20,000 companies including Toyota, IBM, Microsoft and FedEx.

CV checking was once the preserve of large multinationals willing to spend thousands of dollars on executive candidates but the move to a cloud-based database has opened up the process. KFC, YMCA and Wendy’s utilised the ClearStar system last year and Mr Vale said that service-based industries were the biggest users of CV checking technology which can cost as little as £50 per request.

Landlords and companies taking on volunteers are also using CV checking technology to vet tenants and workers for criminal records and to explain mysterious gaps on their CV.

Cenkos estimated that the market for software used to screen employees is worth $4 billion a year. The largest companies include Symphony Technology, which paid $300 million for Reed Elsevier’s screening business last year, and Altegrity, but there are 3,600 companies offering such services in the US.

Mr Vale admitted that obtaining records in Britain could be much more expensive than in the US but that there was a big opportunity with more requirements being put on screening for tradesmen and nannies.

Degrees of inaccuracy led to to their downfall

Richard Gonzalez: the pharmaceutical industry veteran was listed as having a bachelor’s degree in biochemistry from the University of Houston and a master’s degree in biochemistry from the University of Miami in a series of regulatory filings between 2002 and 2007 at AbbVie, then part of Abbott Laboratories. He returned to run AbbVie in 2009 but his education record was amended after reports that he had received neither degree.

Scott Thompson: the former PayPal president was appointed in January 2012 to run Yahoo! which was in turmoil at the time. He was out by May after Third Point, the activist investor alleged that he had never received a computer science degree from Stonehill College. He had an accounting degree.

Robert Irvine: the British chef was fired from his own TV show on Food Network after it was revealed he had not designed Price Charles and Princess Diana’s wedding sake as he claimed.

Jack Grubman: he was once Wall Street’s highest-paid analyst on $20 million a year at Salomon Smith Barney. However the revelation that he had attended Boston University, not MIT as his CV claimed, led to his downfall.

Lee McQueen: the son of a milkman won a £100,000 a year job with Sir Alan Sugar after he won The Apprentice in 2008 despite an issue with his CV. Mr McQueen, a recruitment sales manager, had spent four mouths at university rather than the two years his CV suggested. “I wasn’t actually lying about my CV, I’d say misconstrued information,” he said at the time.