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WHY EMPLOYEE BACKGROUND CHECKS ARE MORE IMPORTANT THAN EVER

Posted by: at 3:28 PM on June 2nd, 2014

A solid employment background screening can help increase applicant quality and retention, reduce workplace violence, theft and corporate liability for many personnel matters.   For a company, background checks can help them be more productive and profitable.

  • The first benefit of a background check is applicant quality.

  • Fewer applications with serious discrepancies

  • Discourages applicants who are trying to hide something

  • Increases applications from applicants who want to work in a safe environment

  • Increases the quality of new hires due to an improved applicant pool and improved selection process

According to The US Dept. of Justice, 1.75 million days of work and about $55 million are lost each year by victims of workplace violence.  If you factor in related costs such as lost productivity, legal expenses, and diminished public image, the annual cost of workplace violence could measure in the billions.   Knowing whether a potential employee has been involved in criminal activity can allow employers to determine if an applicant is appropriate for a job and help avoid a potential threat to other employees.

In some cases, an employer can be held liable for an employee’s actions.  Courts have repeatedly agreed that employers have a duty to exercise reasonable care in hiring individuals who, because of the nature of their employment, may pose a threat to other employees or the public.   Failure to properly review an employee’s background can cost a company time and money.  According to on recent poll, the average settlements in negligent hiring lawsuits are now approaching one million dollars.

Employers are expected to be extra vigilant with screening employees who will:

  • Access consumers' financial, medical, or personal information

  • Access consumers' living quarters or residences

  • Work with the infirm, the elderly, or children

  • Work with hazardous materials

  • Are responsible for the safety of themselves and others

Employee theft is a big problem for many companies. The typical organization loses 5% of its annual revenue to occupational fraud. Employee theft and dishonesty can also reduce production, damage public confidence, destroy employer reputation, and negatively affect employee morale.  As it relates to theft, background checks can reveal potential problem areas and greatly reduce or eliminate the risk of employee dishonesty.

Pre-Employment Background Checks help employers make the "Right Hire" the first time.  A good hire is important as the average replacement cost of a bad hire is 1 to 5 times the salary of the job in question when you factor in costs of recruiting, hiring, training, lost productivity and legal costs.  The information provided by a comprehensive background check enables employers to build a competent workforce and reduce the likelihood of hiring dishonest employees and employees with drug and alcohol problems. Gathering information from multiple sources provides a clearer understanding of the applicant's qualifications and reduces an employer's risks.

The bottom line is that pre-employment background checks help an organization be more successful. Thorough background checks help employers:

  • Reduce the high cost of turnover by screening in employees who stay longer.

  • Reduce losses from employee theft, employee fraud, drug and alcohol abuse, absenteeism, workplace violence, and litigation.

  • Avoid wasted benefits.

  • Reduce training and employee development costs.

  • Increase productivity through hiring employees with better work habits, attitudes, policies, and practices.

  • Enhance professionalism by "screening in" appropriate workplace attitudes.

  • Decrease insurance costs. Some insurance companies will give background check or drug-screening discounts to firms who take such precautions.

  • Meet regulatory, insurance, and customer requirements.

Employers who conduct careful background checks are usually better organizations to work for.

  • They are better managed

  • Place greater value on employees

  • Provide a safe workplace

  • Are willing to invest in quality employees

There are numerous federal, state, and local laws and regulations that apply to employee background checks that must be carefully followed. Generally these laws and regulations specify:

  • How notice is to be given to the applicant

  • How written permission is to be obtained from the applicant

  • How any information obtained and used must be relevant to the job both as to how old the information is and how the specifics relate to job performance

  • How the confidential information is to be handled and disposed of

Doing criminal record checks, employment verifications, education verification, license verifications, and other research tools, an employer can demonstrate their diligence in hiring the right candidate and reduce their liability for negligent hiring.  If you have questions regarding background checks as an employer or employee, please feel free to contact our offices.   We have over 40 years of experience that can help you make the right decision for your future. 

 
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