While trying to streamline the candidate vetting process, Josephine McGillivray was shocked to find how often recruiters were collecting too much personal information.
Long time Freightways employee Josephine McGillivray’s startup has become the logistics and information management firm’s first successful startup to come through its internal angel investor programme.
McGillivray started at Freightways 18 years ago after her big OE plans were cut short by the 2000s Dotcom Bubble.
“I lost my job and returned to New Zealand with my tail between my legs and took up a three month temporary contract at Freightways,” Needless to say, that temporary contract got extended and McGillivray went on to work in almost every part of the business.
But it was at her most recent role as a professional services manager at the firms security services subsidiary, The Information Management Group (TIMG), where McGillivray became familiar with background checks and how frequently employers collected all types of personal information.
In her initial pitch to startup accelerator programme The Startery’s Shark Tank-like investor committee, McGillivray said she wanted to fast track the employee vetting process to share information already requested about a candidate.
But after surveying more than 300 businesses about their background checks, McGillivray did a complete 180 after she was stunned to learn how much personal information employers had about their workers and how poorly it was being stored.
McGillivray says companies were more concerned about protecting their customers’ data than thinking about protecting their past, present and future employees’ data.
“I just felt icky about how much background information companies were keeping. They now know everything about you forever. Like not who you are right now, but everything you’ve ever done. They’ll get a view of how often you’re applying for finance, if you’re on top of your bills, whether or not you’ve got any convictions.”
McGillivray wouldn’t say how much money Freightways invested into MyChecks, citing commercial sensitivity, but the background checking has more than 250 customers, including Briscoes and Comvita, since its launch in between lockdowns last year.
MyChecks runs checks after getting permission from the candidate for the bits of information the employer is after. McGillivray says so far there have been two instances where the request for a background check was fraudulent.
Freightways chief executive Mark Troughear says McGillivray’s MyChecks was a “crucial first step” for the company’s product development team The Startery.
“Protecting data is a pressing concern for businesses and we know that many out there are falling short,” Troughear says.
A survey by MYOB of 511 small businesses across the country found nearly half had experienced a phishing attack over the lifetime of the business and a quarter were asked to pay a ransom.
Two in five SMEs who had experienced a cyber-attack said their private files were accessed and 30 percent revealed that their customer or client data was made available on the dark web.
The Privacy Act allows employers to collect whatever information they want as long as they have a really good reason for doing it and as long as you get rid of it once it’s no longer required. But the law states destruction of data should be when “practicable”.
Employers must notify affected employees and the Office of the Privacy Commissioner as soon as possible of a privacy breach, or face a fine of up to $10,000.
Earlier this year, catering company Spotless had a data breach which revealed workers’ IRD number and passport ID of present and past employees as well as applicants.
I just felt icky about how much background information companies were keeping. They now know everything about you forever.
– Josephine McGillivray, MyChecks
Some years ago technology conglomerate Sony’s systems were hacked with workers’ personal information and was ordered to pay US$8 million to affected employees by a United States District Court.
The next phase for the business McGillivray says will be to break into the tenancy market.
McGillivray says fixing the inequality in the rental and job market has become a “passion” for her.
“The default position seems to be capturing way too much information to make a subjective judgement call.
“There seems to be such a power imbalance between the landlord and tenant. As soon as someone wants to apply for housing, they need to give everything up, seeing bank statements and the ‘KFC test’, it just doesn’t feel right to me.”
The ‘KFC test’ made headlines when property manager Rachel Kann told a social services select committee in 2018 she looked at prospective tenants’ spending habits to determine whether they could afford rent.
“They’re paying somebody’s mortgage and I see a lot of people who are low socio-economic and their bank statements literally will read, ‘KFC, McDonalds, the dairy, KFC, McDonalds, court fine’, trucks that they buy, goods that they can’t afford. You know, I see a lot of mismanagement of money,” Kann said.
McGillivray says private information has become the new oil and its inexcusable for companies to not protect their employees data.
“Private information is highly sought after on the dark web, and the best way businesses can protect both themselves and their employees is by never actually having that information in the first place,” she says.