We've all read about how candidates lie on their resumes and about the astounding percentage of resumes that contain false information. See some articles on this subject here, here, and here. But do candidates lie when you interview them? How about when they fill out application documents? Should you care? That's a question that only you and the management where you work can answer. Some businesses don't place a high value on truthfulness. But assuming that you do care, read on to see how to dig into one specific area: compensation.

I'm going to focus on compensation in this post because, once the decision is made to make an offer, putting that offer together will be based, at least in part, on representations the candidate has made about their compensation.

When I interview candidates my underlying assumption is that they will tell the truth. This is a deliberate choice because the alternative is an unpleasant way to live my life. I ask lots of questions and I always look for consistency in their answers. With compensation there are several data points. These may vary depending on your hiring process, but what follows is probably typical and you can always adapt it to your specific situation.

1. Online application - capture the candidate's current compensation when they apply online
2. Phone interview - ask specific questions about current compensation
3. In-house interview - ask the same specific questions as you did during the phone interview
4. Written application - whether this is online or paper based, collect data on current compensation
5. Background check - once the decision to move forward to a background check is made, ask the candidate for their prior year's W2 or 1099 and a current pay stub. If you're reading this somewhere other than the U.S. then use whatever tax and compensation documents make sense in your country. Often you or your background agent can get current compensation data from the most recent employer if the applicant is unemployed or releases you to talk to them.

Now the fun begins! Draw up a simple matrix with current compensation on one axis and the various data points listed above on the other axis. I do this every time and it takes about 2 minutes. The results are often illuminating! Look for consistencies and inconsistencies.

I love it when the data is totally consistent. This tells me that I've either got a candidate who likely tells the truth or a candidate who consistently tells the same lie. Challenge the candidate on inconsistencies and ask for explanations. The answers you get are also often illuminating. You'll hear things like, "I was just estimating when we spoke on the phone" or "I didn't realize when you said base compensation that you meant my compensation not including my bonus and the merit increase I've been promised." In fact you can really get a terrific insight into a candidate this way.

So what do you do if you've caught a candidate in a lie? Each situation is different. If the preponderance of the evidence is that they, at best, intended to mislead you then I recommend that you pass and look for other candidates. It's also unlikely that someone who lies will have a squeaky clean criminal and DMV record. Also, employment verifications may turn up more inconsistencies in dates of hire or even employers that have been left off the resume or application.

My astute readers will have noticed that the same techniques described here also apply to other areas of a candidate's background and not just to compensation.

As always, your comments are most welcome.