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The Importance of Employee Background Screening

A company is only as good as its employees. The unfortunate truth is that sometimes hiring just a few bad apples can spoil the efforts of an otherwise talented staff.

A recent article in Fast Company provided some compelling data on the importance of fully vetting prospective candidates. The data showed that 41% of companies surveyed said a bad hire had cost their firm at least $25,000 over the previous year, and 25% of these companies said a bad hire cost their firm at least $50,000.

While the financial penalties are serious in their own right, they merely represent one potential trouble spot. More than one-third of the companies in that same survey blamed bad hires for things such as:

  • Lost worker productivity
  • Added employee recruitment and training costs
  • Harmful effects on overall employee morale
  • Lost time
  • Negative effects on client solutions

The problems bad hires can cause are legion. By some estimates, they are responsible for 80% of all employee turnover. That's a staggering number and persuasive evidence that companies need to develop a hiring process that minimizes the odds of a negative outcome.

Why Employers Make Bad Hires

Matching the right person with the right position is rarely easy. It's a little bit of an art and a science, and even candidates with sterling resumes and references aren't immune from not working out as planned.

There are countless reasons why an individual hire might go haywire. Yet there are some common situations that tend to increase the potential for a bad hiring decision.

If management is under pressure to fill a position within a short period of time, compromises may occur in the hiring process. An HR professional may not have the time to comprehensively vet each candidate, or evaluate them thoroughly during the interview process.

Employers may also be misled by workers claiming to have the skills or experience they don't actually possess. In today's hypercompetitive economy, businesses often don't have the time to get new employees up to speed, they need workers who are ready to go from day one.

Yet there's one misstep that crops up time and again when reviewing the process that leads to bad hires: the lack of rigorous background screening. Without it, companies are almost hiring on faith, because they assume everything a prospective employee claims is accurate. That's a huge assumption to make and one that can have disastrous consequences.

The Vital Importance of Screening Employees

We've seen the risks involved with bad hires and how they erode morale, bleed revenue and sap a company's overall competitiveness. They also make life much harder for company leadership. Good workers make people management and workforce development relatively easy. Too many poor hires have the opposite effect, making human resource management a time-consuming chore, even for those who have earned an advanced degree in Human Resources Management.

By committing to a rigorous and comprehensive employee screening program, businesses exert much more control over the hiring process. Thanks to the additional data collected, employee screening allows hiring managers to make a far more informed decision.

Unfortunately, the world has more than a few people who lie, cheat, and embezzle from their employer. These folks apply for jobs just like everyone else, so it's a virtual certainty that every business will encounter bad apples in their pool of potential labor. If a firm puts the wrong person in a sensitive position, catastrophic financial and even legal consequences may ensue.

Thorough employee screening provides companies a line of defense against a disastrous hire of this sort. While it might not prevent every bad hire, it's part of a process that minimizes the potential for such an outcome.

Types of Background Screening

The level and detail of employee screening is usually tied to the particulars of the job. For example, pilots typically undergo strict drug and alcohol screening, while those who handle money are often screened for debt or poor credit. Screening is also important for employees who work closely with a firm's intellectual property or proprietary information, as is the case in the IT world.
Common screening areas for prospective employees include:

  • Identity checks
  • Criminal record checks
  • Work history checks
  • Credit and debt checks
  • Reviews of any legal proceedings
  • Education verification
  • Motor vehicle record checks
  • Personal references
  • Professional certification checks
  • Drug and alcohol screenings

Not every business or every open position requires all of the above screening points. Yet there are very few, if any, positions which wouldn't benefit from at least some pre-employment screening.

Employee background screening is an absolutely critical part of any smart hiring process. Without it hiring managers are making key decisions with less than optimal information – and greatly increasing the odds of hiring the wrong person.