The Importance of Pre-employment Screening It finally happened. Your ideal candidate has just walked through the doors. Let the celebration begin! But wait, before you begin to pack away the resumes and crack open a bottle of sparkling cider, you may want to be sure he is what he seems to be. When it comes to background screening, many human resource professionals subscribe to the age-old saying, "better safe than sorry." The need for qualified and likable employees must not overshadow the need for proper employee screening. To illustrate just how "sorry" a human resource profession could become, a quick look at the numbers reveals the problem when an employer fails to evaluate the backgrounds of new hires: The average costs of hiring an employee are approximately $4,000. Now, if up to 40% of job applicants include false or inflated information, and knowing that poor hiring practices can lead to substantial turnover, absenteeism, and lost productivity, then it follows that hiring someone without following proper guidelines can be financially disastrous. Statistics show that one-third of job applicants lie on their applications. 5% falsify a name, Social Security number and/or license number. 11,000 violent incidents occur in workplaces annually, costing employers thousands of dollars per incident, as well as untold impact on morale in the workplace. 2/3 of all prison inmates were employed during the month before they were arrested for their current offense. Half of all inmates had been employed full time. It is estimated that embezzlement accounts for $4 billion in losses annually. In today's business climate, background checks should be mandatory. Failure to perform pre-employment screening could destroy everything a business owner or manager has worked hard to build. It is a company's responsibility to know their potential employees. Employee fraud and theft can weaken or ruin a business. In addition, an employee with a history of violence or drug or alcohol abuse could cause irreparable damage to a company's reputation. Based on the doctrine of "Negligent Hiring and Retention", employers may face liability issues. The company may be liable for damages if a court of law determines that the employer "knew or should have known" relevant facts about an employee's background that should have disqualified that employee from being hired. For example, an employee with a bad driving record should not be hired as a delivery person and an employee with a sexual assault conviction should not be sent into a customer's home. To minimize the risk of such incidents, companies need to implement a well-crafted hiring process that screens out those risky candidates before they become employees. Types of Background Screening An employee background screening oftentimes involves verifying some basic information such as previous employment and checking references. However, a more thorough employee background check can include data compilation, such as obtaining and/or verifying the candidate's driving record, credit history, criminal history, drug screening, and medical history. Driving record: This data can be obtained from a local DMV. This is important if the position the candidate is applying for involves operating a motor vehicle. Previous employment verification: This type of screening is used to verify a candidate's dates of employment and other details of their work. Resumes might seem very attractive when first produced, but occasional falsification of prior jobs, and dates spent working those jobs, can and do turn up during employment verification. Credit history: A credit history can prove to be helpful if a company intends to provide the employee with a company credit card or access (whether through a computer or more directly) to cash, securities, bank accounts, etc. If an individual has a poor credit history, then providing him or her with access to such financial items might prove to be a risk. Drug and alcohol screening: Pre-employment screening usually includes a substance abuse investigation. The employer can determine the type and level of screening that is most appropriate for its workplace. Pre-Employment Physical Screening: Under certain limited circumstances and for certain limited positions, the employer may make an offer of employment based on a candidate's successful completion of a physical. A passing score on a physical should be consistent with the job duties for which the candidate will be responsible. Conducting and requiring an individual to "pass" a physical which does not measure the person's ability to do the job functions could cause a candidate to challenge the employer with the validity of requiring and using a physical during the hiring process. The Laws Behind Background Screening Adopting a consistent approach to background screening is designed to prevent or minimize liability exposure based on allegations of negligent hiring and retention. However, numerous federal and state guidelines dictate the propriety of job application materials, interviews, background investigations, and hiring procedures. Among the most important of these are the Fair Credit Reporting Act (FCRA), the Age Discrimination in Employment Act, the Americans with Disability Act, and Title VII of the Civil Rights Act. These guidelines evolve continually and must be reviewed and applied accordingly. Furthermore, there are specific requirements for employee screening in select industries or positions regulated by federal government agencies. When investigating a prospective employee's background, it is necessary to advise applicants of the intent to obtain background information on them and obtain their consent in writing. The law requires employers to provide separate consent forms for some types of investigation, but not for others. Conducting Background Screening When it comes time to conduct an investigation into a potential candidate's background, employers can either hire an outside consumer reporting agency or have a department within the company itself conduct the screenings. Third parties who conduct investigations are obligated to follow certain rules dictated by the FCRA. If an employer does a background screening directly, they are not subject to all of the FCRA regulations and they are not considered a consumer reporting agency. When information is collected through a consumer reporting agency, it is the employer's responsibility to make certain the third party agency complies with all notification requirements of the Fair Credit Reporting Act. These notification requirements, while not onerous, are very specific and failure of the 3rd party agency to comply could create an issue for the employer. For example, a candidate for employment must be notified of the intent to conduct a third party investigation, who is conducting the investigation, what their rights are under the Fair Credit Reporting Act and much more. Summary Many employers hurry through the hiring process because they need someone in a position and feel they have found the perfect fit. But hiring without proper pre-employment screening could result in serious problems that may end up costing a company more time, trouble and money than they planned. A smart approach to hiring is the first step to avoiding these issues when looking to fill positions and it always should begin with a thorough background screening.
Doherty Employer Services As one of the Midwest's largest Human Resource Outsourcing organizations, Doherty Employer Services provides human resource, benefits, risk management, safety and workers' compensation and payroll services to employees in 48 states. Accredited by the Employer Services Assurance Corporation (www.esacorp.org) and a member of the National Association of Professional Employer Organizations (www.napeo.org), Doherty is nationally known as an innovative employment services and staffing firm.		If you do not wish to continue to receive our monthly newsletter please click on this unsubscribe link to be removed from our distribution list.