Rethinking hiring risk: practical steps alternative investment firms should take now

Introduction

Understanding the risks associated with modern recruitment is only the first step. The more important question is what firms should do next.

Alternative investment managers do not need to rebuild their hiring processes from scratch. However, they should assess whether existing controls remain appropriate for today's environment.

Review your hiring journey

Many recruitment processes were designed before generative AI became widely available. Firms should map the entire candidate journey from application through to onboarding and identify potential vulnerabilities.

Build a modern trust verification framework

Many firms still rely heavily on CVs, interviews and references. While these remain important, they are no longer sufficient on their own. Modern screening increasingly relies on building multiple independent trust signals around a candidate. This may include identity verification and biometric ID checks, employment verification and regulated references, qualification validation, HMRC and payroll verification, adverse media and regulatory screening, digital footprint analysis, device intelligence indicators and document forensic analysis. The objective is not to catch candidates out. It is to establish confidence that the individual joining the organisation is genuinely who they claim to be and has the experience, qualifications and integrity expected of someone working in a regulated environment.

Rethink candidate assessments

AI tools can now assist with written exercises, technical tests and competency responses. Where practical, firms should introduce more interactive assessment methods that evaluate judgement, communication skills and problem-solving capabilities in real time.

Create shared ownership

Hiring risk should not sit exclusively within HR.

Compliance, operations, technology and senior leadership teams all have a role to play in protecting the organisation.

Move beyond one-off screening

Historically, screening has been viewed as a recruitment-stage activity. Increasingly, firms are recognising that risk can emerge long after an employee joins the business. Changes in financial circumstances, directorships, regulatory status, adverse media coverage or external business interests may create new risks that were not visible during onboarding. For this reason, many regulated organisations are introducing ongoing screening programmes that provide periodic reviews of higher-risk employees

and regulated individuals.

Conclusion

The hiring environment has changed dramatically over the past few years. AI, remote recruitment and increasingly sophisticated fraud techniques are creating new challenges for employers. The firms that adapt their screening and onboarding processes now will be better positioned to protect their investors, employees and reputation in the years ahead.

Partnering with FeMan Consulting

As hiring risks continue to evolve, firms need screening processes that are proportionate, practical and capable of identifying emerging threats. FeMan Consulting provides comprehensive screening services tailored to regulated businesses, including employment verification, regulated references, qualification checks, ID verification, adverse media screening, regulatory checks and ongoing screening programmes. Our goal is simple: to help organisations reduce risk, strengthen governance and make confident hiring decisions. To discuss how FeMan Consulting can support your recruitment and screening processes, please get in touch.