You may have heard about new web-based services that are offering fake work histories and references for job seekers. In tough economic times, some unemployed job seekers are taking desperate measures to make up for a spotty work history or poor references. As an employer, this means it’s more important than ever that you conduct due diligence on potential employees before you hire them.

Companies that are surviving and even thriving in an economic downturn face the daunting task of sifting through a mountain of job applications for any position they have open. Successful recruiting in this kind of economy boils down to information management. Hiring managers need to take advantage of the high supply in the job market and pull in the right people who can take your company to the next level.

Economic concerns are causing many businesses to look at all operating costs and find ways to reduce expenses, including the cost of finding and hiring qualified candidates. If using a recruiter doesn’t fit in your budget right now, and expensive advertising is yielding so many resumes from unemployed candidates who are desperate for work that you can’t manage the inflow, here are five strategies you can implement immediately to reduce your recruiting expenses and find qualified candidates.

When employees leave your company, whether they resigned or were terminated, you can expect prospective employers to contact you at some point for information about them. Your risk in providing references is that former employees may sue you if your references are unfavorable and lead to job rejection. Awards in successful defamation suits may include damages for lost earnings, mental anguish, or pain and suffering, and potentially punitive damages.

Employers who have laid off employees during the past couple of years may now find themselves in a situation where they want to rehire some of those employees as the economy turns around. Before rehiring, employers will need to review a number of benefits issues to ensure compliance with separation agreements, employee handbooks and Internal Revenue Codes, just to name a few. Some of the issues to consider when rehiring employees are:

Facing the expected retirement of millions of baby boomers and a smaller pool of Generation X employees to replace them, managers will need the help of another group of professionals: Generation Y. Also known as Millennials, this group consists of more than 80 million individuals born approximately between 1979 and 1999. Millennials are the workforce of tomorrow, and according to a survey conducted by Robert Half International with CareerBuilder.com, hiring managers consider this generation the hardest to recruit and retain.

By 2016, it is expected that 1 out of 3 workers will be 50 years of age or older. A labor shortage, as much as 30% by 2030, is expected as boomers continue to mature. Employers who learn how to attract and keep older workers will be able to fill the expected shortfall.