Workplace assaults total 2 million each year. Employee theft costs $40 billion annually and causes 30 percent of business failures. Lawsuits for negligent hiring are on the rise and can cost a company millions.
But for about $40, businesses can make workplaces safer, prevent employee theft and mitigate the chance of a lawsuit. Forty dollars is the cost of a basic background check on a potential employee. Increasingly, it’s an expense that human resource departments are willing to pay.
“Our business has grown by leaps and bounds,” said Barry Nadell, president of California-based InfoLink Screening Services. “It’s growing in every way possible. Our revenue is up over last year, we have more new clients month after month, and our present clients are doing more.”
Statistics show that nearly 40 percent of job applicants lie on their resume, and Nadell said that 8.4 percent of employees vetted by his company have a criminal history. The highest rate of criminal records (11.8 percent) was in the retail sector.
“It amazes me,” he said. “People know they are undergoing a background check; they sign a release form to allow it. And still, we find this many people with criminal histories.”
The cost of background checks varies by company, Nadell said, and by package. His basic package includes a national criminal history check, a driving record check and tracking Social Security numbers.
“We tend to have more health care companies, since those were the first to realize the liability issues,” he said. “But our clients represent about 98 percent of all businesses – we cover everything from retail to manufacturing.”
Negligent hiring lawsuits are becoming more frequent, especially among nonprofit and religious groups, said Steve Durie, president of Trak-1, a Castle Rock company that performs Internet background searches for many Colorado Springs clients.
“Our existing business primarily works with nonprofits,” he said. “We perform background checks for Focus on the Family and New Life Church, for example. Goodwill Industries, Woodmen Valley Church are also clients.”
The focus on nonprofits makes sense, he said, because children and special needs adults can be placed at risk by employees who are not properly researched before they are hired. That failure can lead to negligent hiring lawsuits, costing a nonprofit money and reputation, he said.
“We check for relevant criminal history – exposure to violence,” he said. “Someone with a violent history could not get hired if they are using my company.”
Founded in 2003, Trak 1 has offices in Houston and Atlanta and serves about 4,000 clients. ServPro in Colorado Springs is one of those clients.
“We do these checks on our employees for a number of reasons,” owner Mara Simmerman said. “We deal with insurance companies, and our employees go into people’s homes. We’ve committed to provide that level of service to ensure that our people have clean backgrounds.”
ServPro is part of a national franchise that cleans the damage from water or fires. Employees must be vetted for criminal history because they are often alone in people’s homes, Simmerman said.
“We also check credit history and motor vehicle history,” she said. “A credit check is just another way of verifying someone’s identity. We’re not really interested in their credit standing; we just want to make sure that people are who they say they are. They also drive our vans, so we have to make sure they have a good driving record.”
Nadell and Durie said their companies tailor the background investigations to the position. For example, an employee responsible for a company’s budget would undergo criminal history and credit history checks, Durie said.
“Background checks should go beyond organizations like the CBI (Colorado Bureau of Investigations) because only 60 percent of the people who get arrested get fingerprinted, and that’s what they go by,” he said. “You also have to know if there is guilt, instead of just an arrest.”
Both companies use the Internet to perform at least part of their research, although many criminal databases are not yet available on the Web. Durie said that more than 200 million criminal records are available via online sources.
In addition to credit history, driving records and criminal activity, background companies also verify education credentials – something that many applicants lie about on their resumes.
“Just look at the CEO of Radio Shack,” Nadell said. “They didn’t check his credentials when they hired him in 1994, and it turns out he lied about his degrees and was forced to step down.”
Companies need the best, most in-depth information about a potential employee, said Nadell, who has written a book about the subject, “Sleuthing 101: Background Checks and the Law.” He also talks to national groups about the importance of checking out possible employees.
“I get phone calls every day asking, ‘How fast can we implement this?’” he said. “And I always ask, ‘What happened?’ Because there’s usually something – embezzlement, a violent act, something. And it scares an employer when there’s an incident. It’s a shame they take action after something happens, but sometimes it takes a kick to get them to do it.”
As an employer, there are a number of things that you can do now to protect you and your company from hiring a criminal.
1) Place prominent signs around your company that state you conduct background checks and drug testing. Promoting the fact that you pre-screen new hires is a great way to deter unwanted individuals from applying for employment. Many individuals (but not all) with criminal convictions and falsified resumes will not waste your time because they know that they will be screened out in the hiring process.
2) Place a notice on your Web site that you perform background checks and drug testing. Just as a sign on company premises will deter unwanted individuals from applying for a job, so, too, will a notice on your Web site.
3) Create ominous disclosure and authorization forms requiring authorization for a background check and drug test. Hand it to every applicant with the employment application, not after they have completed the application. Create thorough documents that encompass all federal and state laws. If the applicant has something to hide, your disclosures will make unwanted applicants think twice about completing the application process.
4) Advise all employees that your company performs background checks and obtain their authorization in advance. Write a background screening policy and distribute it to all employees. In your policy list the required searches for each job position inferring that promotions are based on the satisfactory response from a background check.
5) Insist that your temporary employment agency perform background checks and get a copy of the background screening report prior to employing any temporary worker. It is common for applicants with criminal records to work through temporary agencies because many agencies do not conduct background checks.
6) Require every vendor and independent contractor who comes to your premises to perform background checks on their employees. This requirement costs you nothing and protects your employees, customers and the public. Create a policy indicating what they should check.
7) Have a complete employment application that asks all the questions you can legally ask. Have a large notice at the top of your application stating that you perform background checks and drug testing. Use your application form as a deterrent and a reminder to everyone that they will have a background check. The federal Equal Employment Opportunities Commission has listed several questions that can legally be asked prior to making an offer of employment. Employers should include all those relevant on their application.
Source: Barry Nadell at www.greathire.com