Ethical AI and Modern Background Screening

Harnessing technology to frictionlessly screen, assess, and hire great people using their online footprint

Introduction

In the ever-evolving landscape of recruitment, companies have been tirelessly refining their hiring processes to identify and attract the best talent. Despite these efforts, most organizations continue to struggle to hire great people.

A recent HR.com study revealed that 75% of companies wouldn't rehire 80% to 100% of the individuals they hired within the past year. This leads us to ask:

• Why are we still struggling with quality of hire?
• Why isn’t our current process working?
• Why aren’t our talent acquisition technologies helping us make meaningful improvements?
• What approach might be better?

Let’s take a look below.

Unveiling the Misconduct Factor and its Impact on the Workplace

New research on misconduct at work and in the hiring process analyzed hundreds of thousands of candidates last year and found that 11% of candidates were engaging in some kind of misconduct. This is not good. This is more problematic when the financial impact of misconduct starts when 5% of workers are engaging in misconduct.
 

Misconduct within the workplace encompasses a range of behaviors, from accidents like being late to work because of traffic to more severe transgressions like workplace violence and other illegal activities, like fraud. This often-overlooked aspect can have a profound impact on employer cost, team dynamics, company culture, and overall success.

Companies spend trillions of dollars each year identifying, investigating, and handling these issues. Harassment, the most common form of misconduct, costs companies between $300 and $1,000 per employee per year, occupational fraud costs 5% of annual profits (totaling several trillion dollars globally), and employee theft costs $50 billion a year.

The research underscores that even a small percentage of employees engaging in misconduct can exert a disproportionately large negative influence on an organization, made even worse because misconduct is contagious. Harvard Business Review reports that financial advisors are 37% more likely to engage in misconduct when they come across a new coworker engaging in misconduct.

The prevalence of such behavior raises a critical question: why isn't misconduct given more attention during the hiring process?

Where We Look for Character and Misconduct Matters

Many companies rely solely on traditional background checks to identify candidates with problematic backgrounds. However, this only addresses criminal behavior. Harassment, antisemitism, islamophobia, homophobia, and other behaviors that violate workplace codes of conduct are often overlooked because they do not often result in criminal charges. Simply conducting a criminal background check will, in more cases than not, fail to show you which of your candidates have difficulty following a workplace code of conduct.

Beyond traditional background checks, many companies use pre-hire assessments and video interviews to screen for some capacity of candidate conduct. However, at a point in time when the FBI has to warn companies about deepfakes in interviews and tools like ChatGPT can pass tests like the MCAT, one has to ask are these long-regarded solutions to assessing candidates still reliable?

Expanding your tech stack to align with societal and technological changes is critical. That’s why more companies are starting to diversify how they screen for misconduct, character, and overall candidate quality by adopting more modern and holistic methods.  

Shifting the Lens to Screen Talent with a Modern, Holistic Approach

In today's digital era, where personal and professional boundaries are often blurred, a candidate's online persona provides a wealth of information beyond what's presented on a resume. Traditional background checks and pre-hire assessments, while still valuable, may miss out on critical insights that can be derived from a candidate's digital footprint. By adopting a holistic approach that combines the conventional with the modern, employers can achieve a more comprehensive understanding of potential hires, ensuring a better fit for both the role and the organizational culture while also safeguarding the organization from potential legal risks.

Earlier this year, Fama Labs published a study on the impact online screening has on quality of hire. It walks through some of the key ways that advertisers and marketers leverage insights from the content people put online to personalize ads and sell consumer products. With the right tools, insights, and processes, hiring teams can similarly screen and assess talent for things like business acumen, personality archetypes, integrity, and misconduct in ways that are frictionless to the candidate and as accurate as the world’s best pre-employment assessments.

The Technology Conundrum

The discrepancies in the screening approach extend to the technology used for recruitment. It's not surprising that roughly 75% of hiring managers are Googling candidates and friending them on social media to get additional insights into candidates during the hiring process. The practice has become common. However, this strategy comes with compliance concerns.

Hiring managers can easily see protected-class information when viewing a candidate’s online profile, and once something is seen, it cannot be unseen. Organizations now have a way to gain the desired insights without the harmful repercussions of violating candidate privacy and increasing the risk of discrimination lawsuits for organizations by adopting ethical and compliant third-party online screening solutions.

The Power of Enhanced Candidates Screening

Fama’s research validates these enhanced candidate screening practices and offers a transformative solution allowing companies to conduct enhanced online screening on candidates in an ethical and compliant way. This involves delving deeper into a candidate's background, scrutinizing not only their professional history but also their ethical conduct and interactions beyond the confines of a resume or an interview to ensure their conduct is aligned with an employer’s code of conduct
Embracing Change and Ethical AI for a Better Quality of Hire and Improved Retention

As organizations seek to improve the quality of their hires, it's crucial to screen at the pace of today’s candidates. By doing so, hiring teams can significantly enhance their ability to identify candidates who align not only with the desired skill set, but will also adhere to the values and ethical standards upheld by the company so they can contribute positively to the team.

By focusing on mitigating misconduct risks during the hiring process as well as reducing the friction and frustration that come with traditional pre-employment assessments, companies can improve the safety and inclusivity of their workplaces, improve engagement and retention, as well as reduce costly legal action.

Conclusion

The journey of refining the hiring process is an ongoing one, marked by continuous learning and adaptation. As we reflect on what’s working and what isn’t, we're presented with a compelling realization: the very metrics we've relied on to assess candidate quality might have been perpetuating our hiring challenges. By embracing new AI-powered tools in an ethical and compliant way that picks up on the modern signals of character, integrity, and misconduct, companies can enhance their quality of hire while creating an engaging, productive, and profitable workplace.

Author Bio

Micole Garatti is the Director of Product and Content Marketing at Fama.io, the online screening solution that makes hiring great people easy. She’s passionate about creating safe and inclusive workplaces, which led her to Fama as well as to found The Most Inclusive HR Influencer List and the #HRforAll Community that diversifies voices of influence in HR and Recruiting. She’s spent nearly a decade working in HR Tech, at companies including Aspect43, Fairygodboss, Talview, Ultimate Software (UKG), and more. Featured as an HR and marketing expert, find her in Inc., Venture Beat, ERE, and SHRM. Connect @socialmicole