Integrated Security Services, Inc., New York

The Importance of Pre-Employment Background Checks

04 Nov

Pre-employment background check formApplicants don’t tell all and don’t always tell the truth. Many surveys have confirmed that a high percentage of employee applications contain false statements. One survey of 2,000 hiring managers revealed that more than half (58 percent) found false claims in resumes they reviewed. Similarly, one-third of the reviewers, 33 percent, found resumes that falsely claimed educational credentials. Another large category involves failing to disclose some important requested information. These patterns create risks for the employer, as they cause unwanted terminations and potential legal liability. The costs associated with not conducting thorough pre-employment background checks can be quite high.

The Costs of Replacement

A study commissioned by the AARP considered the costs of replacing any skilled worker. The report stated that replacing an experienced worker at any age can cost 50 percent or more of the individual’s annual salary in turnover-related costs, with increased costs for jobs requiring specialized skills, advanced training or extensive experience. The concept of replacement expenses included the following types of process disruptions and costs:

  • Loss of productivity while a job is vacant
  • Costs of management effort to recruit, interview, and select
  • Loss of productivity from related or dependent jobs
  • Loss of productivity as a replacement employee learns duties and gains effectiveness.

Checking for Risks

A pre-employment background check is a critical form of risk management for the hiring process. Background checks are an important, cost-effective way for employers to reduce turnover, improve productivity, and reduce legal liability. Criminal background searches, educational and employment verification, each provides critical information and demonstrate the employer’s due diligence in hiring and retention. The extent and type of pre-employment background checks permitted by state and federal laws and regulations depend in some part on the nature of the employment. The public policy permits greater freedom to examine employee records for jobs that involve risks to the public and high integrity-risk positions.

Protecting the Employer and the Workplace

The employer has a duty to provide a safe workplace. Pre-employment checks can help keep the workplace safe. In fact, pre-employment checks show that the employer has exercised reasonable care and made a diligent search. Legal liability is among the leading reasons to perform pre-employment background checks. The checks show due diligence and help protect the employer from liability. Screening applicants for signs of past unacceptable activity and behavior makes the workplace more secure.

What can Pre-Employment Checks show?

Submission of past work history may only show starting and ending dates and duties performed. The employer needs to know more about events between those dates, including actions and activities that could cause issues. This information includes reports of workplace misconduct. The employer has a duty to provide a safe workplace; today this means a place free of violence, threats, harassment, bullying and other unacceptable behaviors. The employer seeks to find productive employees and decrease unwanted employee turnover. Background checks search for information and indications of problems that become causes for terminations, and they include frequent tardiness, alcohol or drugs, social misconduct, and criminal activity.

Proving Due Diligence

The costs of a negligent hire to a business can be severe and long-lasting. Negligent entrustment is a potential basis for legal liability for the acts of any agent or employee. By having a private investigation firm like Integrated Security conduct a thorough pre-employment background check, an employer can show that it has made reasonable efforts to find the truth and acted in a responsible manner when making a hire. This effort can reduce liability, but even more important, it can reduce the risks of harm to the employer’s business, employees, customers, or any other party. The primary goal is to make good hires and retain skilled, productive and experienced employees.

Benefits of Pre-employment Checks Outweigh the Costs

The old wisdom that an ounce of prevention is worth a pound of cure applies to the situation of pre-employment background checks. Prevention is far less expensive than fixing a bad hire. The cost of a professional background check is a small fraction of the costs associated with an unwanted termination, particularly a fault-based termination that a background check might have prevented. Cost estimates of unwanted terminations range from part of the annual salary to twice the annual pay for skilled positions in high-demand fields. As such, the benefits of a professional pre-employment background check conducted by an experienced firm like Integrated Security are far greater than the cost. Limiting legal liability and avoiding damage to business and business reputation are just a couple of the many valuable benefits of performing checks before hiring an employee.