Background Investigation - Pre-Employment Background Check Salah Skaik: Marketing & Business Development Consultant Human Resources Management Systems

2. Prepared By:
Salah A. Skaik
Supervised By:
Dr. Sami Abou-Al-Ross

3. What is Background Investigation?
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Or background check
Is the process of looking up and compiling
criminal records, commercial records and
financial records (in certain instances such
as employment screening) of an individual.

4. WHY ???!!!!!!
After the Sept. 11 attacks on the
World Trade Center and the
Pentagon. An increase in negligent
hiring lawsuits and the threat of
terrorism have given rise to an
increased demand for background
screening.
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5. Good hires can be one of your
best assets.
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6. Bad hires can be one of your
Worst Liabilities.
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7. Types Of Investigations?
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8. Types Of Investigations?
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9. Types Of Investigations?
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10. Types Of Investigations?
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11. Types Of Investigations?
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12. Types Of Investigations?
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13. Statistics
The Society for Human Resource Management
states 45% of all resumes contain one major
fabrication.
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14. Statistics
The Wall Street Journal reports that 34% of
all job applications contain lies regarding
Experience and education.
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15. Statistics
National Credit Verification Service says that 25%
of the MBA degrees it verifies on resumes are
false.
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16. Statistics
25% of the hiring managers questioned take
into account information found on the
internet when making hiring decisions
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17. Statistics
26% of hiring managers have used internet
search engines to research prospective
employees, while 12% say they have used social
networking sites
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18. Statistics
Facebook was Founded in 2004, the site “now
has over 19 million registered users across over
47,000 regional.
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19. Statistics
MySpace has become the most popular social
networking site in the world, with more than 95
million members.
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20. Statistics
In fact, 8% of the potential employees that
were rejected as a result of information
found on search engines and networking
Sites.
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21. Ethics
It is unethical to rely on information found
on the internet in making hiring decisions.
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22. Financial Perspective
 The NY Times conducted a study
of business losses and estimated
that 72% of shrinkage is due to
employee theft.
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23. Financial Perspective (Cont.)
 Employee fraud costs companies
more than $400 billion dollars
annually.
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24. Financial Perspective (Cont.)
 Employee theft and fraud cost US
retail businesses more than
$50 billion annually. (12.5%).
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25. Financial Perspective (Cont.)
 The average organization loses an
estimated 6% of its annual revenue.
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26. Financial Perspective (Cont.)
 According to the Bureau of National
Affairs, from $15-25 billion is lost
each year due to employee theft.
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27. Financial Perspective (Cont.)
 On-the-job violence costs employers
$36 billion each year.
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28. Financial Perspective (Cont.)
 The cost of a bad hire can range from
1 to 5 times their annual salary.
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29. Financial Perspective (Cont.)
 According to William M. Mercer, Inc.,
turnover costs a minimum of $10,000
and sometimes raised for more than
$20,000.
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30. Negligent Hiring Liabilities &
Lawsuits: Case(1)
Trusted Health was ordered to pay $26.5 million
dollars to the family of a murdered patient.
Courts throughout the U.S. declared "prior to the
time the employee is actually hired, the
employer ... should have known of the
employee's unfitness" and is liable if they did
not perform an adequate background
investigation.
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31. Negligent Hiring Liabilities &
Lawsuits: Case(2)
A guard service was found guilty for
inadequately checking a guard's references
when the guard helped steal from their
client.
The charge - negligent hiring as they failed to
investigate and the employee had a
criminal record. The damages paid were
over $300,000.
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32. Negligent Hiring Liabilities &
Lawsuits: Case(3)
An employee who had previously been
convicted of passing bad checks forged
signatures on sales contracts. The court
judged his employer negligent and
awarded $175,000.
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33. Negligent Hiring Liabilities &
Lawsuits: Case(4)
After driving for a telephone company for
only a week, an employee was involved in
a traffic accident. The jury learned that
the company never saw the employee's
driver's record which had five traffic
tickets within 18 months. They awarded
the injured party $550,000.
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34. Negligent Hiring Liabilities &
Lawsuits: Case(4)
After driving for a telephone company for
only a week, an employee was involved in
a traffic accident. The jury learned that
the company never saw the employee's
driver's record which had five traffic
tickets within 18 months. They awarded
the injured party $550,000.
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35. Pre-Screening Is Cost-Effective
With the cost of hiring a new employee
averaging over three thousand dollars ($3,000),
less than 3% can be attributed to the amount of
a standard background check. A bad hire can
mean an estimated loss to companies of
approximately $40,000 in severance pay,
training, wasted human resources time, possible
search firm fees, loss of productivity, and impact
on employee morale. The expense of a bad hire
far outweighs the cost of a background check.
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36. THE END