In today’s tough economy, the job market is highly competitive and the applicant pool is more experienced. The cost for background screening is increasingly scrutinized and evaluated due to budget concerns, and organizations are looking for more affordable ways to screen their applicants. In some cases, the ‘more affordable’ approach is to eliminate the background screening program entirely or transition to using a criminal database to screen applicants. Employers should take caution before eliminating or decreasing their level of due diligence as it pertains to background screening.
Consider this:
There is increased financial strain on the world’s population and employee morale has declined due to shortened work weeks, widespread layoffs, and business closures. On a daily basis, hundreds of people line up for job fairs offering very few open job positions.
What does this mean?
All of this creates the perfect scenario for an increase in inflated resumes, employee theft, and workplace violence. According to a recent study of 24 major retailers, the retail sector alone experienced an 18% increase in employee theft from 2006 to 2007. That translates to 1 employee per 28 apprehended for theft within the workplace. A similar survey of companies ranging in size and industry found that about 20% of employers said workplace theft has shifted from being a moderate problem to a very big problem.
Employee theft is not limited to monetary resources and office supplies; it can also include confidential information. In January 2009, the Ponemon Institute surveyed 1,000 American adults who lost or left jobs over the past year. They found that 59% of ex-employees stole confidential company data. The financial services industry was the largest sector represented in the poll. The information taken included customer information, email lists, employee records, and non-financial information. It is anticipated that these problems will continue to increase across all industry sectors as more and more people are looking for work.
Bottom line: These are now the unemployed applicants who are looking for new jobs in the United States today and the employment pool is much larger in the current economy. For these reasons, background screening has become more important than ever.
Although the majority of employers today have a background screening program for all newly hired employees, many are reevaluating the cost of their background checks and electing to modify their policies to only conduct background checks for certain job positions, and/or change the scope of their screening program to save money. This recent trend has revealed a shift in decision-making priorities. The decision to do business with a certain background screening provider used to be heavily weighed on the provider’s experience, level of customer service, and product integrity. More recently the decision is, by far, most heavily determined by cost. While cost-considerations are understandable, the equation should include more than price for services. Remember, not all background screening services on the market today are researched with the same level of due diligence. Organizations must do an equivalent comparison before making the decision to modify the background screening program. If your organization is sacrificing quality for lower costs, you could be spending money on inaccurate or inadequate information which results in wasted spending, greater vulnerability and added exposure to legal ramifications. There are several factors organizations can evaluate to maintain a quality, comprehensive background screening program, while reducing the investment of cost, time, and resources.
Set up background screening requirements based on job position
Work with your background screening provider to conduct an in-depth evaluation of your screening program. During the evaluation, look at what services you are using for various job positions and make sure you are getting the information you need – but only the searches necessary for a certain position. In some cases, this may mean adding certain services for some job positions and eliminating certain services for other positions. For instance, if it is your company’s policy to run driving record searches on all employees, you may consider only reviewing driving records on employees who drive a company vehicle, rent vehicles using company funds, or are reimbursed for mileage on their own personal vehicle. Conversely, if you are not doing employment and education verifications for certain positions where a person’s credentials are crucial to the job position, you may consider adding those components to your screening program. One of the most common and easy ways an applicant can get the job they desire is to embellish their education and employment history during the application process. With the nature of today’s competitive job market, the problem of inflated resumes will undoubtedly increase. If their credentials are not verified and they cannot do the job they promised on paper, you have wasted more time and resources on-boarding those employees.
Downsizing your screening program to save money can be risky
Simply having a background screening program does not mitigate all risk should you be forced to defend your organization in a negligent hiring lawsuit. In the course of the lawsuit, the background screening practices of your organization would be heavily scrutinized for the level of due diligence and thoroughness. If the comprehensiveness of your background screening program was reduced to cut spending, your organization could be held accountable for that decision..
Many organizations are under the common misconception that a “nationwide” or “statewide” search provides the best information. Best practice recommendations, developed by background screening industry leaders, advise organizations not to rely solely on a “nationwide” criminal search as the singular means for obtaining a person’s criminal history. While database and statewide repository searches are often cheaper, they often do not include information from all jurisdictions and are only as accurate as the information provided to them by the participating courts and reporting agencies. For instance, one court may update a database daily while the court in the next county updates it annually; potentially leaving huge gaps in the information. Furthermore, a stand alone database search (without subsequent court research) is not compliant with the Federal Fair Credit Reporting Act (FCRA).
Consider this scenario:
The switch to a database search saves you $15 per background check and you hire about 100 new employees per year. You are saving $1500 annually. However, the new search is limited to information from the jurisdictions reporting to the database. The most reliable databases in the market today are estimated to include only 50% of all jurisdictions. So, you are getting half the information and exposing your organization to an increase in theft from missed criminal convictions as well as an increase in your risk of being sued for negligent hiring. The potential cost of either of these results would most likely be substantial – and would far outweigh any potential savings.
The best practice, as recognized by industry leaders as well as the National Association of Professional Background Screeners (NAPBS), is still to search the source of the information directly – the courts.
Evaluate available tools that save time and resources
Consult with your screening provider to see what kinds of technology and tools they can provide.
Applicant Entry / Technology Integration
Considerable time and resources on the part of your staff can be reduced or eliminated if you are working with a partner that offers applicant entry technology or is currently integrated with your organization’s applicant tracking system. These types of tools require the applicant to enter their own information online, greatly reducing the level of internal data entry and the risk of duplicating requests, saving your organization time and money.
Adjudication / Compliance Tools
These types of services not only help organizations maintain compliance with applicable State and Federal laws, it allows organizations to make sure personal bias is eliminated and consistent hiring decisions are being made. The compliance steps required under the FCRA and various state laws can be time-consuming. Your organization can reduce that time by working with your background screening provider to set up a compliance program based on all applicable legal requirements facing your particular organization and industry.
With the job market flooded with people in need of a new job, hiring the best is more difficult than ever and enlisting the appropriate due diligence during the hiring process is even more important.
How will a background check identify current employees who are stealing from my organization?
Annual background checks on all current employees are a useful tool in making sure there are no “red flags” that have occurred since the previous background. A recent study shows that 32% of large organizations reported an increase in criminal activity committed by employees outside of the workplace. An updated background check would reveal those recent cases and could prevent employee theft or violence in the workplace.
If there is no public record of employee indiscretions, then background checks are not as helpful in identifying those current employees who are stealing. One reason there has been a reported increase in employee theft is because organizations are paying closer attention to their costs and more quickly notice discrepancies that normally, in a better economy, could go unnoticed for some time. Experts recommend increasing the number of audits within the organization and communicating more with employees regarding internal theft.
