This startup tests employees’ “trustworthiness” with a CIBIL-like score

Sudhakar Raja faced a few incidents that changed him forever. One of them happened in 2018 when he got cheated of Rs 1.5 crore by some employees while running an insurance broking house. 

Another set of events occurred in 2021 when he was building an app with his team. He found some employees stealing money, and some candidates accepted offers but didn’t join; they wouldn’t even bother to inform him. 

At first, these incidents made him angry but also curious. He researched the extent of such employment frauds and their impact on companies. According to one statistic, around 30% of business failures in the United States are caused by employee theft. However, there is no equivalent data for Indian companies. 

Raja, the Founder and Chief of Strategy at TRST Score, is on a mission to prevent or minimise the occurrence of such events. With his team of 20 people, including consultants, he is building a software-as-a-service (SaaS) platform that calculates an individual’s trustworthiness. 

Simply put, TRST Score can verify a potential candidate’s background, and companies can base their hiring decisions on it. 

“CIBIL helps you with financial risk mitigation. We look at human risk mitigation,” says Raja. CIBIL score—issued by Credit Information Bureau (India) Limited (CIBIL)—is a three-digit numeric summary of an individual’s credit history, calculated to determine one’s creditworthiness. 

Based on extrapolation, TRST Score estimates that over $100 billion is lost owing to human risks in India. 

The perfect score

Once a company is convinced of this idea, the TRST Score platform’s application programming interface (API) is integrated with the former’s human resource tech product, which typically takes about seven days. 

The startup also helps its customers perform 15 different background verifications, a mix of both automated and manual.

During the integration process, the startup verifies and stores employees’ data, including their names, permanent account numbers (PAN), employment history, and salary levels. It excludes details like performance reviews and assessments, as they are subjective. 

The platform claims to do an employment check “in a few seconds”, compared to background verification firms that usually take a few days. 

According to Raja, the Chennai-based startup collects data after receiving explicit consent from concerned employees. The employee and their employer receive notifications, including the reason for the check done, whenever a company conducts background verification on the former. 

So far, TRST Score has over 130 customers with a cumulative workforce of a million. Of this, it has onboarded about 3.5-4 lakh employees on its platform, and in a couple of months, it will onboard the rest. The startup aims to get 3,000 customers and 10 million employees within the next three years.

Initially, TRST Score assigns each employee the perfect score of 1,000 points. Any transgression, including suspension orders, warning letters, accepting offer letters but not joining, (sexual) harassment complaints, charges for financial fraud, submission of fake documents, absconding, moonlighting (if it is against the company policy), bribery, and behavioural problems, results in point reduction. 

“Anything less than 850 points is really bad,” says Raja. “But if you see, only 5-10% of the employees would fall in this category. In a way, this is helping the rest of the 90%.”

Initial traction

Though Raja is tightlipped about its customers due to the non-disclosure agreements signed with them, he claims to have marquee companies, especially from the banking, financial services, and insurance and services sectors. 

Recently, TRST Score partnered with Sa-Dhan, an association for microfinance companies, and The Finance Industry Development Council—the association of non-banking finance companies (NBFCs)—to do human risk mitigation through TRST Score as part of their code of conduct.

The startup has onboarded over 30 companies through these partnerships. Additionally, it has joined hands with the Retail Association of India, the World Association for Small and Medium Enterprises, and the National HRD Network to recommend their members to use TRST Score.

Raja is also keen on approaching the problem with a “360-degree view”. Not only does he want to bring in salaried employees but also others in the ecosystem, including outsourced contract workers, direct selling agents, partners, gig workers, interns, students, and customers, onto the platform.

TRST Score is in talks with insurance companies to include their agents in the network. Besides, it is convincing colleges and universities to help them capture student data to verify if a potential candidate has actually graduated from an institution and if their academic records are genuine.

Once verified, these entities can enable individuals to get a “green tick” next to their relevant details. 

Customers can join and use the platform for free for about two years. Additionally, those joining within this period can run checks at 50% of the verification fees (Rs 150 per check). For the rest, it would be Rs 300 per check.

“We would like to bring the cost of risk mitigating a person to Rs 300. Currently, it is free,” says Raja, adding the company is in the pre-revenue stage. 

Next on the cards

Raja is trying to onboard companies from across sectors. Listing cases that caused companies to lose money, Raja argues the current practices are time-consuming, cumbersome, and difficult to conclude the authenticity of a potential candidate or a company.

“For example, how does a venture capital firm know that the company they are funding is not an offshoot of an intellectual property theft? How does a company know if an employee has signed a non-compete clause in their previous organisation if they don’t talk about it upfront?” says Raja. “How do you mitigate risks you don’t even know exist?”

TRST Score promises to bring down costs for its customers and save time for customers and their employees, besides making it difficult for unethical employees to find jobs. In addition to screening individuals, the platform can also authenticate a particular entity (for example, if it’s a shell company or a politically-influenced firm) in the BFSI sector.

The startup also offers risk mitigation services to all, irrespective of whether they are part of the platform, including checking Aadhaar, PAN, driving license, voter’s ID, address proof, and CIBIL score, besides court cases and prior employment verification. Those on the platform can avail of these services at lower rates.

Raja is now trying to get banks, lending institutions, and insurance companies to come on board the platform. Once the startup gets enough companies in the BFSI sector, it will integrate their employee data with their lending and underwriting platforms to enable financial use cases, such as making loan sanctions easier.

“Is there a correlation between an absconding employee and their repayment behaviour? Is somebody’s acceptance of multiple offer letters (and not joining) and their performance related? These are all new metrics we are coming out with,” explains Raja, emphasising the importance of companies’ risk mitigating themselves using diverse data points.

It is also working on providing predictive analytics and actionable insights based on the collected data, including the probability of an employee leaving an organisation, moonlighting by any individual (if both companies are on the platform), and market salary insights for a comparable job in the same industry.

The SaaS platform has a personally identifiable information vault, which the founder says is compliant with the European Union’s General Data Protection Regulation (GDPR) and Indian laws. 

The startup’s advisory board boasts names, including Girish Ramdas (Co-founder and CEO of Magzter India), Satish Mehta (former Founding MD and CEO of CIBIL), Srinivas Acharya (former MD of Sundaram BNP Paribas), and Taruna Hinduja (former HR Head of SPI Cinemas). 

TRST Score has raised Rs 2 crore and Rs 1 crore in seed and pre-Series A rounds, respectively. Now, it is in the midst of raising $4 million in a Series A round.

(Feature image by Winona Laisram)

(This story was updated with additional information from the company and a factual error was corrected.)