Pre-employment screening as a critical risk-management tool

February 2008 Security Services & Risk Management

In today’s competitive economic environment, companies cannot afford to be side-tracked by employee problems such as dishonesty, theft, false CVs, fraud or harassment.

Employers have increasingly turned to pre-employment screening as a critical risk-management tool to try and avoid hiring problem employees in the first place.

Statistics obtained from Employers' Mutual Protection Service (EMPS) over the three months, October-December 2007, showed:

* 4% of all checks had criminal records.

* 22% had some financial record.

* 12% had false qualifications.

* 26% of drivers' licences could not be verified.

The statistics on the consequences of even one bad hire are chilling. The financial cost to businesses from theft, violence, and false credentials can be enormous. There are other costs that are hard to measure, such as the harm to employee morale or the company's reputation. Industry statistics suggest the cost of even one bad hiring decision can exceed R100 000, taking into account the time spent recruiting, hiring, and training and the amount of time the job is left undone or done badly by an unqualified applicant.

Given the enormous price tag of a bad hiring decision, it is no surprise that employers of all sizes are turning to various tools to boost the effectiveness of their hiring process. The tools run from criminal, credit, honesty and skills testing to specialised interview techniques.

Ultimately, none of these tools has proved effective in weeding out bad candidates, unless used in conjunction with a programme of pre-employment background screening to obtain hard facts about a candidate.

Pre-employment background screening works in four critical ways:

* Just having background screening can discourage applicants with something to hide. A person with a criminal record or false CV will simply apply to a company that does not pre-screen.

* It limits uncertainty in the hiring process. Although using instinct in the hiring process can be important, basing a decision on hard information is even better.

* A screening programme demonstrates that an employer has exercised due diligence, providing a great deal of legal protection in the event of a lawsuit.

* Having a screening programme encourages applicants to be especially forthcoming in their interviews.

Checking criminal records is a good example of a pre-screening process that helps promote safe hiring.

CV verification

Another important tool is CV verification. It is estimated that up to 30% of CVs contain material falsehoods that pertain to previous employment and education. A professional screening company can verify whether an applicant has the degrees or qualifications claimed. Even if a past employer will not give details about job performance, just verifying the job dates and job title is crucially important. One of the most critical parts of the hiring process is to look for unexplained gaps in employment.

Other tools can include financial background checks (when relevant to the job), ID verification and drivers licence verification.

Common hiring concerns

Even with all of the advantages of a screening programme, many employers still have questions and concerns about implementing background checks. These are the four most commons concerns that employers express:

Is it legal? Employers have an absolute right to conduct lawful pre-employment screening in order to hire the best-qualified candidates. Under that law, the employer first obtains the applicant's written consent to be screened.

Is it cost-effective? A pre-employment screening will typically cost less than the cost of a new employee on his or her first day on the job. That is pocket change compared to the damage one bad hire can cause. In addition, employers typically only screen an applicant if a decision has been made to extend an offer, and not all applicants.

Does it discourage good applicants? Employers who engage in screening do not find that good applicants are deterred. Job applicants have a desire to work with qualified and safe co-workers in a profitable environment.

Does it delay hiring? No. Background screening is normally done in just 48 to 72 hours. Most of the information needed is not stored in databases. Occasionally there can be delays that are out of anyone's control, such as previous employers who will not return calls.

For more information contact Employers' Mutual Protection Service, +27 (0)11 678 0807,,

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