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Background Checks: Understanding Who You Are Hiring

Background Checks: Understanding Who You Are Hiring



Company names mentioned herein are the property of, and may be trademarks of, their respective owners and are for educational purposes only.

Company names mentioned herein are the property of, and may be trademarks of, their respective owners and are for educational purposes only.



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    Background Checks: Understanding Who You Are Hiring Background Checks: Understanding Who You Are Hiring Document Transcript

    • Who Are You Really Hiring? In this whitepaper, you’ll find out why it pays to always run a background check in cases such as occupational or résumé fraud. © Business.com Media, Inc. All rights reserved. | 888.441.4466
    • The Bottom Line of Background Checks Approximately 69% of organizations, Background checks can reduce your reported that they conduct criminal background business’s risk of falling victim to résumé fraud, checks on all of their job candidates1. There’s a occupational fraud and the big costs associated lot of great talent out there, but how can you with bad hires. make sure these applicants are who they say are and have the experience they indicate they If you’ve noticed some discrepancies in your do. It’s now more important than ever to make payroll or feel an employee embellished their sure the people you hire are capable, qualified work experience, consider your options when it and trustworthy. There are a number of comes to background checks and what these reasons for running background checks, such types of screenings can do for your business. as: • Reducing legal liability for negligent hiring. • Ensuring a safe work environment for employees. • Reducing and preventing theft, embezzlement and other criminal activity When a candidate is applying for a position where he/she would be working with sensitive financial information, confidential employee information or other people’s property, it’s likely a business is looking to pre-employment screening or background checks to ensure that the candidate is trustworthy. Background checks can rule out candidates with negative incidents in the past and protect your business and employees. 1. “Background Checking – The Use of Criminal Background Checks in Hiring Decisions,” SHRM, July 2012. © Business.com Media, Inc. All rights reserved. | 888.441.4466
    • Recovering from Résumé Fraud Background checks can help you combat of unreturned resources. To combat résumé résumé fraud and avoid bad hiring mistakes. fraud, consider taking the following steps: Think back to 2012 when Yahoo! CEO Scott • Thompson was accused of inflating his college A background check into the experience your credentials at multiple companies. When his applicant claims can quickly identify claim of innocence was contradicted with discrepancies. evidence, he agreed to resign. Think of the costs and headaches that could have been saved had a simple background check on his work experience been run. • Use background checks Use backchannel references When possible, contact your applicant’s former co-workers to confirm specific experience details. 46% of employment, education and/or credential reference checks conducted revealed discrepancies between what the applicant provided and what the source • Cross-check their public profiles, e.g. LinkedIn, for inconsistencies With a semi-public profile, candidates may be less likely for fear of being called out by peers. reported2. While Thompson may not have been the only person to inflate their credentials, businesses hiring for executive level positions or in specialized fields would be smart to consider running background checks on applicants and employees. Résumé fraud is a commonly encountered issue by hiring managers and recruiters. It can waste resources and deny jobs to applicants that are Another recent study found that two out of actually qualified. Background checks and three employers have encountered an employment verification services can confirm, or applicant lying on their résumé3. Résumé fraud find errors, with an applicant’s education and can cost your business employees, time and work history. While these can be expensive money. If you invest in hiring and training a when conducted for an entire pool of applicants, new team member, only to find out they using these types of services for near-offer embellished their résumé, you’re investing a lot candidates is a good idea. 2. “Screening and Selection Index,” ADP, 2010. 3. “Employment Screening Benchmarking Report,” HireRight, 2013. © Business.com Media, Inc. All rights reserved. | 888.441.4466
    • Fending Off Occupational Fraud You might feel confident in your new 40-50% of employment fraud victims don’t hire, but occupational fraud, also referred to recover any of their losses4. Larger companies as employment fraud, is very real and employees often pose the greatest fraud threat. Employees who are attempting to may have higher value thefts, but even the smaller thefts to small businesses can cause a lot of damage. commit occupational fraud may not think you’re paying close attention to operations. Payroll While having a system of checks and balances fraud is one common type, but occupational within your organization can help prevent fraud can take place throughout a company, employment fraud once an employee is brought including accounting departments, at the on, a pre-employment screening can help you managerial level and by long-term employees. defend yourself and your business against hiring previous offenders. The typical business loses at least 5% of its annual revenue to occupational fraud and the average loss caused by occupational fraud is $140,0004. Occupational fraud can take place when an employee pads their time sheet, steals product from a warehouse, alters financial statements, or even takes money directly from a cash register. Background checks can help prevent occupational fraud. By running a background check on those who self-report their hours or interact with your business finances, you can take the first step in preventing and reducing your risk of falling victim to employment fraud. 4. “2012 Report to the Nations on Occupational Fraud and Abuse,” ACFE, 2012. © Business.com Media, Inc. All rights reserved. | 888.441.4466
    • Bad Hires Cost Businesses Big Screening employees provides businesses Hiring someone without first running a with the opportunity to ensure that the claims a background check can damage your business candidate makes are truthful. A sufficient brand and cripple your financials. Throughout screening process can uncover this whitepaper has been the discussion about misrepresentations made by applicants during what types of fraud can be prevented with pre- the hiring process. A bad hire can cost your employment screening. While your hiring business BIG. process may include reference checks and pre- • employment assessments, a background check Replacement of an employee ranges from 2-7 times his/her • salary5 can assist in your efforts to find top talent by ruling out unqualified or untrustworthy Hiring and training costs can very to candidates. 25-200% of annual compensation Approximately 6% of criminal background Benefits of Conducting Employment Screening3 55% 61% checks revealed a criminal record within the last seven years – with 24% of those having two or more adverse records2. When you hire someone who isn’t as experienced as they claim or has a history of employment fraud without running a background check, you’re risking losing hiring budget, 20% employee compensation budget, productivity, 40% 29% 35% Improved quality of hire Improve safety and security Improved regulatory compliance Reduced negligent hiring risks Reduced employee turnover (6) Other Benefits and even new business opportunities. Whether you outsource recruiting or keep it inhouse, running pre-employment checks on candidates that are about to be offered a job can aid you in making better hiring decisions. 5. “Top 5 Hiring Mistakes & How to Fix Them” Synergy Solutions, 2009. 6. “Six Truths about Employee Turnover, “ American Management Association, 2009. © Business.com Media, Inc. All rights reserved. | 888.441.4466
    • Summary Screening employees provides businesses with the opportunity to ensure that the claims a candidate makes are truthful. Background checks can help you avoid occupational and résumé fraud, as well as the costs associated with bad hires. For more information about background checks, visit Business.com. © Business.com Media, Inc. All rights reserved. | 888.441.4466