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In our mobile society, it's rare to have firsthand knowledge of a new hire. And the days are gone when an employer would dare to hire an individual based solely on a grade point average and a transcript from a school or college.
Today, an employer needs to know more about applicants — much more. Otherwise, the employer risks hiring problems. To protect your company and its staff members, the trend in hiring is toward intensive pre-screening of job applicants.
With fierce competition for a limited number of jobs, applicants may exaggerate and embellish the experience they have — or don't have. They may also try to hide things like a criminal record or previous job termination.
For busy employers, background checks on applicants can seem like a luxury, a task that requires more resources or time than they have available. But failing to do good background checks can hurt your bottom line, harm your reputation and dull your competitive edge in three critical ways:
Wasting time and money on high turnover due to poor hiring.
Theft by employees, which also could damage your business reputation if a staff member steals from a client or customer.
A negligent hiring lawsuit could ruin your business. If an employee hurts someone while they are on the job, or in your workplace, or if their shoddy work causes injury, your business could be liable.
New hires aren't the only staff members who require screening. Many employees promoted to a job with different responsibilities should get criminal background checks — for instance, a grounds person who is now going to have the keys to tenants' apartments.
One employer wisely decided to check out an assistant manager before promoting him to manager. The employer found out the assistant manager had three convictions for credit card fraud and was engaging in the illegal activity while at his current job.
Background checks should be routine if there is particular liability. In other words, an employee's level of responsibility should determine how involved and extensive a background check should be. For example:
Employees who have access to people's homes or offices, such as cleaning or maintenance employees or real estate agents.
Men and women who work with children.
Employees who have access to cash.
People who greet the public, such as receptionists.
Anyone who deals with clients or customers on a regular basis.
Franchisees, who are entrusted with your name and logo.
What Should You Check?
The following are items most often checked in background and credentials screening:
Judgments or tax liens.
Social Security number.
Workers compensation history (legally, you can only check into an applicant's workers comp history after a job offer has been made, to avoid violating the Americans with Disabilities Act).
Past and present residence information.
Past employment verification and work record.
Residence information is one of the most important areas of a background check. Applicants may not reveal accurate addresses to you, because checking could turn up information they may not want the company to know.
How do you get all this information? You could gather it yourself, but it's likely to be time-consuming. You can likely save time and money by using a third-party background screening service.
To reduce cost, you can screen in phases. A driving record and Social Security check could be run on anyone being brought in for an interview. Candidates returning for a second interview could have prior employment and education information verified. Checks on criminal and financial histories could only be done on the finalists.
Warning. Applicants and employees have rights. You must have the individual's written permission to obtain a credit report. An applicant also has a right to see reports that are sent to the employer and to challenge any negative information. State laws and federal laws limit the information you can legally obtain. Be cautious. Follow the letter of the law with information obtained from a background screening.
*Securities offered through 1st Global Capital Corp. Member FINRA, SIPC. Investment advisory services offered through 1st Global Advisors, Inc. We currently have individuals licensed to offer securities in the states of AL, AZ, CA, CO, CT, FL, GA, HI, ID, IL, IN, KY, MI, MS, MO, NV, NJ, NC, OH, RI, TN, TX, WA, WV and WI. This is not an offer to sell securities in any other state or jurisdiction.