Presented by Michael Peterson of The Orsus Group at the 2017 PG Customer Summit in Nashville, TN

1. Why Background Checks?
Michael Peterson

2. #PGCustomerSummit
Background Checks
Increased applicant and new hire quality
Reduce workplace violence
Protect against negligent hiring liability
Reduce employee dishonesty losses
Screen employees with access to living
quarters
Reduce employee turnover
Hire the right people
Avoid negative publicity
Meet regulatory, insurance and customer
requirements
The bottom line: SUCCESS
Possible mistakes
Cost - Cheap background checks are
poorly done background checks
Pros
Cons

3. #PGCustomerSummit
Background Checks
Included in Background Checks:
Work
History
Education
Reference
Verifications
Criminal
History
Driving
Record
History
Credit and
Bankruptcy
History
Civil
Litigation
History
**It is important to implement a screening process that is consistently applied. The EEOC has issued guidelines to help employers
utilize background information in the recruitment process.

4. #PGCustomerSummit
Benefit: Better Candidates Lead to Better Employees
A general improvement in the quality of applicants
• Leads to better workers
• Higher Productivity
• Increased Quality
• Lower Employee Turnover
• Will discourage dishonest applicants from applying
51% of all résumés contain inaccuracies concerning
• Employment
• Job Performance
• Educational Achievement
Approximately 50,000 Ph.Ds are purchased each year
• Slightly more than the amount of Ph.Ds earned legitimately1
1Ezell, Allen and Bear, John (2012) Degree Mills: The Billion-Dollar industry That Has Sold Over a Million Fake Diplomas.
Amherst, NY: Prometheus Books

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Benefit: Better Candidates Lead to Better
Employees
HOW YOU PRESENT YOUR SCREENING MATTERS
Encourage high risk candidates with criminal backgrounds to eliminate
themselves
• Save time and money in the recruitment process
Does not discourage good, qualified applicants
• They know their check will not reveal significant problems
HOW YOU PRESENT YOUR SCREENING MATTERS

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The Past Tells the Story
Businesses in mid 80s - discouraged drug users
from applying at companies who conducted the
test.
Deploying pre-employment screening provides
the same impact as drug testing.
More companies + background screening =
higher quality applicants

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Signs of Theft & Fraud
CAUTION: Employers must use good judgment when denying
employment based on credit history. If the position in question
does not have the opportunity for theft or fraud, employment
denial may be considered discriminatory.
CREDIT PROBLEMS CAN MATTER DEPENDING ON THE
POSITION APPLIED FOR
Credit reports and bankruptcy reports can be pulled determine presence of
financial strain
• May lead to theft or fraud

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Credit Can Matter
The Story…the IT VP, the supplier and the
guns

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Reduction in Risk of Negligent Hiring
Litigation
 Negligent hiring
 The employer can be held
liable even if oblivious to
employee’s history if it is
determined that they should
have known.
 An employer may be found
liable if the employee injures
a co-worker, customer, or
member of the general
public even if the employee
is not acting within the scope
of their job duties when the
injury occurs.

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Sexual Assault Overlooked
The Case…the man in the elevator

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Consistency is Key
 Hire = “Keys to the kingdom”
 Access to all the inner
sanctums of the organization
 Are you hoping that because
they were good and clear on
their original screening check
that they will always remain
the same?
Statistics say
otherwise.

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In Numbers…
Estimates from 2009 show
that organizations
to fraud/theft.
Based on 2009 GDP, a 7% figure
would translate to approximately
in fraud/theft losses.
Lost 7% of their
annual revenue
$988 Billion

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The Sun Don’t Shine State
The Story…the case of a good looking
guy and a better looking lie

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Why People Change
People change for a variety of reasons, and unfortunately some changes are
detrimental. There is never a “good reason” to do something illegal.
Common causes for changes in employees are:
Credit Problems
Elderly Parent Care
Drug Addiction
Marital Problems
Divorce
Little Supervision
Entitlement
DUI Conviction
Legal Debt
College Expenses

15. #PGCustomerSummit
Think About It…
Numerous reasons why people change. Many companies have
policies that require employees to report any activity to their
Human Resource department which can be interpreted as a risk
to the organization.
When was the last time you heard of, or saw people standing in
line outside of the Human Resource department’s door, waiting
to acknowledge their guilt?
The fact is - you
probably never will.

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Cognitive Dissonance
People are fearful of admitting mistakes. It’s human nature to deny, not to
mention embarrassing.
Cognitive Dissonance - one’s ability to rationalize their behavior as being
normal.
Thought process that ends up costing companies millions each year in
productivity, shrinkage, brand deterioration and turnover.
HOW YOU ASK THE
QUESTION MATTERS

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Reasons to Screen Backgrounds
When we research the reasoning behind background
screening job candidates, the general reasons are:
Best Qualified Trustworthy
Meets
Requirements
Getting it
right the first
time = less
turnover
Possibility of
workers comp
claims
Safer
workplace
Protect
intellectual
property

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Keep in Mind
18 Months
75%
85%
55%
30%
27%
20%
44%
60%
30%
$60,000
companies with staff trained to deal with fraud and ethics related issues, up from…
*2010 ACFE Report to the Nations on Occupational Fraud and Abuse
before the average fraud scheme is detected
fraud offenses committed by men
worst frauds committed by insiders on the payroll
perpetrators who are managers, up from 33%
business failures primarily due to THEFT
employees who say they feel comfortable reporting fraud on a confidential hotline, managed by
people outside their industry
employees who say they feel comfortable reporting fraud in an anonymous letter
employees who say their companies could do more to REDUCE fraud
in 2000
Median loss when managers and executives are involved in fraud.

19. #PGCustomerSummit
The Louisiana Secret
The Story…the many with no history, no
control, but $20 and a phone number

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Consider the Facts
According to the Alexander Hamilton Institute – Employment
Law Resource Center, each day in the United States:
16,400 threats are made to employees
723 workers are attacked
43,800 employees are harassed
Majority with criminal background
Estimated that theft, espionage, and lawsuits stemming from poor hiring decisions cost U.S.
businesses $18 billion per year.

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The Ultimate Liar
The Story…the day the company reviewed my
tenure at the university

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Lessons Learned
Braselton woman (Mercer) allegedly stealing over $21,000 from a local
nonprofit after being hired as the Treasurer of Ark of Jackson County
“(The chairman) told me that the board of directors did not complete a
proper background check on Mercer at the time she was hired because the
previous treasurer had recommended her for the job and told them Mercer
had previous experience from where she had kept records at the IRS,” a
Jackson County Sheriff’s Office deputy said in the incident report.
If a proper background check had been completed, the board may have
learned that Mercer was previously convicted by the federal government for
stealing $50,000 from the National Treasury Employees Union.

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Lessons Learned
MUSC pharmacy worker charged with embezzling public funds
Jennifer Maynard suspected of stealing $10,500 over 2 years
“Background checks done before her employment show [suspect] had several
prior convictions on drug and theft related charges.” – ABC News

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Lessons Learned
Oklahoma says it missed Dede
Westbrook’s domestic violence arrests.
Oklahoma University allowed a player
on the team without looking at the
background check which revealed
domestic violence arrests against his
children’s mother.
This is the fourth player on the team
with domestic charges.
-Washington Post

25. #PGCustomerSummit
The Goal is to Make Sure Your New Hire is
Worthy of Your Team

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Questions?
Michael A. Peterson, Chief Operations Officer
President Global Investigations & Security Services
248.530.3670
mpeterson@theorsusgroup.com
www.theorsusgroup.com