Background Checks Can Sort Out the Worst Job Applicants
In a perfect world, there would be no bad hires. If your well-dressed job candidates only wore labels that said “embezzled at her last job,” “has mountains of credit card debt,” or “was arrested for theft in 1998,” you’d know exactly what to do. But as every employer knows, the real world is far different from this ideal.
The Cost of Bad Apples
The U.S. Department of Commerce estimates that as many as 30% of business failures are because of poor hiring practices. According to the Association of Certified Fraud Examiners, employee theft alone costs businesses an average of 6% of their gross income — or $9 per employee per day — each year. And small businesses are often the hardest hit. Studies have shown that organizations with fewer than 100 employees tend to suffer the highest fraud-related losses.
Liability for negligence is an even more costly risk faced by employers who fail to carefully screen their hires. The law is well established in this area:
Employers have a legal responsibility to protect both co-workers and customers from employees who pose a threat. Damage settlements for employers found guilty of negligence often run into the millions.
How To Spot Them on the Tree
What to do? Well, when it comes to knowing a potential employee’s past, background checks are essential. Conducting these assessments usually includes:
Checking criminal records. Among the most important phases of an employee background check should be a criminal records search based on the applicant’s residential, work and educational history. If you hire a person with a criminal history and that person commits a crime on the job, someone may likely sue your company. A good background check shows that, at the very least, you made a good faith effort to protect others from harm.
Examining credit reports. It’s an unfortunate fact that employees with pressing financial needs (or wants) tend toward fraud. A simple credit report can let you know which job candidates are in over their heads or facing potential legal action by disgruntled creditors. Protect your company by checking the credit reports of potential hires.
Tracing Social Security cards and other IDs. Identity theft is one of the fastest growing white-collar crimes in the United States. Convicted felons, illegal aliens or persons with shattered credit sometimes find switching identities a tempting proposition. Your background check won’t mean a thing if the person you’re screening isn’t who he or she says. Do what you can to make sure they are — by verifying their personal identity.
Verifying previous employment. A significant number of job applications falsify past employment information. So, verifying previous employment can weed out candidates who are prone to exaggeration or dishonesty. Valuable tidbits of information to look for include the employee’s job title, length of employment, salary, reason for termination and re-hire status.
Confirming education records or professional certifications. Submitting false educational degrees or professional certifications is another favorite ploy of those who, for whatever reason, struggle to get or hold a job. If you find a potential employee has falsified credentials by listing experience or schooling they don’t have, your response should be swift and decisive. Don’t take chances on someone who has already demonstrated dishonesty.
Reviewing driving records. A quick motor vehicle record check can protect your company from a human resources nightmare down the road. Imagine your dilemma if you hire an employee who later gets into an accident with a company vehicle, causing serious injury to others. If the victim’s lawyer uncovers the fact that your employee has a history of reckless driving, your company may pay dearly.
Of course, if you choose to follow any of these suggestions, check with an attorney to make sure you adhere to the letter of the law. Otherwise, checking up on potential employees could hurt more than it helps.
Can You Afford Not To Check?
Certainly there are costs attached to human resources due diligence. But employers can justify these expenses by considering background checks as a form of risk management. After all, one criminal employee can cost an employer literally millions of dollars.
Although background checks fall short of foolproof, they can definitely increase your odds of avoiding bad apples. Please call us to discuss the best way to structure your prehiring due diligence program. We’d be glad to help.
Due Diligence — Before the Interview
Many employers find it worthwhile to conduct employee background checks, or at least some minimal screening, before the initial interview. After all, why waste time on an interview if the candidate isn’t viable in the first place? Candidates you afford an interview, but don’t hire, may later accuse you of discriminatory hiring practices. Avoid such troublemakers, if possible, by never interviewing them to begin with.
A significant number of job applications falsify past employment information.