It’s every HR, security, or risk management professional’s worst nightmare: Your phone rings late on a Friday afternoon as you wrap up the loose ends of another challenging week and look forward to a quiet weekend. A panicked voice informs him that Pat from accounting has assaulted another co-worker and threatened to hurt a supervisor. It turns out that not only was Pat stealing money, but he really didn’t have the claimed experience.
As the mess is cleared up, everyone will ask you the same question over and over again. From the company’s CEO, CFO, and corporate attorney to managers, supervisors, and co-workers, there’s one thing everyone wants to know: how did that person get hired in the first place?
If the matter escalates to litigation, legal fees for a single incident of workplace misconduct can easily run into the six figures, and jury awards can be staggering. Your company can be sued by injured co-workers, members of the public who were harmed, or even the bad employee who can claim wrongful termination. Once litigation begins, you’ll also find that, in addition to your normal duties, you now have a second and almost full-time job: dealing with the litigation discovery process and organizational fallout.
The statistics on the consequences of even a bad hire are chilling. The financial cost to businesses of theft, violence, and false credentials can be enormous. There are other costs that are difficult to measure, such as damage to employee morale or the company’s reputation. Industry statistics suggest that the cost of even one bad hiring decision can exceed $100,000, taking into account the time spent recruiting, hiring and training and the amount of time an unqualified applicant leaves the job without doing or does it wrong.
Given the huge price tag of a bad hiring decision, it’s no surprise that employers of all sizes are turning to a variety of tools to make their hiring process more efficient. Tools range from honesty and skills tests to behavior-based and group interview techniques.
Ultimately, none of these tools have proven effective in weeding out bad candidates, unless used in conjunction with a pre-employment vetting program to obtain hard data about a candidate.
Pre-employment background screening works in four fundamental ways:
o Simply conducting a background investigation can discourage applicants who have something to hide. A person with a criminal record or false resume will simply apply to a company that they do not shortlist.
o Limits uncertainty in the contracting process. Although using instinct in the hiring process can be important, basing a decision on solid information is even better.
o A screening program demonstrates that an employer has exercised due diligence, providing great legal protection in the event of a lawsuit.
o Having a screening program encourages applicants to be especially forthcoming in their interviews.
Preselection tools
Checking criminal records is a good example of a screening process that helps promote safe hiring. It is estimated that 10 percent of job applicants have criminal records relevant to the hiring process; Without a screening program, it is statistically almost certain that a company will hire someone with a criminal record. Contrary to popular perception, there is no national database available for private employers. Criminal records are normally checked by having qualified investigators visit the courthouses in the counties where the applicant has lived or worked. Because there are more than 10,000 courthouses in the United States where records are kept, most employers outsource this task to qualified firms that specialize in pre-employment screening.
Another important tool is the resume verification. Job seekers often use their resumes as a marketing tool, but the hiring company can run into trouble when resumes push the boundaries of honesty. It is estimated that up to 30 percent of resumes contain material misrepresentations related to previous employment, education, and professional licenses. A professional evaluation company can verify whether an applicant has the requested degrees or licenses. Even if a previous employer does not provide details about job performance, just verifying the dates of the job and the job title is vitally important. One of the most critical parts of the hiring process is looking for unexplained gaps in employment. That’s important to help a screening company check the appropriate courts while searching for criminal records.
Other tools may include credit reports (when relevant to the job), Social Security number traces, driving records, national warrants and orders, as well as federal and civil court records.
Common Employer Concerns
Even with all the benefits of a screening program, many employers still have questions and concerns about implementing background checks. Here are the seven most common concerns employers express:
Is it legit?
Employers have the absolute right to conduct a legal pre-employment screening to hire the best qualified candidates. A federal law called the Fair Credit Reporting Act (FCRA) balances employers’ right to know who they hire with an applicant’s right to disclosure and privacy. Under that law, the employer first obtains the applicant’s written consent to be examined. In the event that negative information is found, the applicant must be given the opportunity to correct the record. Employers must establish a consistent policy so that similarly situated applicants are treated the same. A qualified screening company will help an employer with legal compliance issues.
Does it invade privacy?
No. Employers can learn only of those things an applicant has done in his “public” life. For example, checking court records for criminal convictions or calling previous employers or schools does not invade an area of personal privacy. Employers are only looking for information that is a valid and non-discriminatory predictor of future job performance. To maintain privacy, most background companies have Internet systems with secure websites. Employers must also take steps to maintain confidentiality within their organization, such as keeping reports in a separate file from personnel files.
It is profitable?
A pre-employment evaluation will generally cost less than the cost of a new hire on their first day of work. That’s pocket change compared to the damage a bad hire can cause. Also, employers generally only review an applicant if a decision has been made to extend an offer, and not all applicants. It’s ironic that some companies spend hours hunting for a bargain on computers while trying to save money by not properly vetting a job applicant, which is a huge investment. The bottom line is that problem employees usually cause problems for employees, and money is well spent to prevent problems in the first place.
Does it discourage good candidates?
Employers who engage in selection do not find that good candidates are deterred. Job seekers want to work with qualified and confident co-workers in a profitable environment. A good candidate understands that a background check is a sound business practice that helps a company’s bottom line and is not an invasion of privacy or an intrusion.
Do you delay hiring?
No. The background check typically takes only 48-72 hours. Most of the necessary information is not stored in databases, but must be obtained by going to court or calling previous employers or schools. Occasionally, there may be delays that are out of anyone’s control, such as previous employers not returning calls, schools being closed for vacation, or a court clerk needing to retrieve a record from storage.
Also, an organization that is careful in its hiring practices should find a lower “hit” rate during background checks. There are a number of steps a company must take to ensure a secure hire long before a name is submitted to a background company. These techniques include making it clear that your company conducts background checks to screen out bad applicants, knowing the “red flags” to look for on an application, and asking interview questions that will filter out problem candidates.
Is it difficult to implement?
For an overburdened HR, security, or risk management department that already handles numerous tasks, background check outsourcing can be done very quickly and effectively. A qualified pre-employment screening company can set up the entire program and provide all the necessary forms in a short period of time. Many companies have Internet-based systems that speed the flow of information and allow an employer to track each applicant’s progress in real time.
How do we select a service provider?
An employer should look for a professional partner, not just an information provider that sells data at the lowest price. An employer must apply the same criteria that it would use to select any other provider of critical professional services. For example, if an employer were choosing a law firm for legal representation, he would not select the cheapest one; he would clearly want to know that he is selecting a firm that is competent, experienced and knowledgeable, as well as reputable and reasonably priced. . The same criteria should also apply to critical human resource services. A screening firm must understand the legal implications of background checks, particularly the federal Fair Credit Reporting Act.
Employers and applicants alike have learned that pre-employment screening is an absolute necessity in today’s business world. More importantly, they have learned that due diligence in recruitment is a way to keep companies safe and profitable in these challenging times.