Just a decade ago, only a small percentage of job candidates were subjected to even basic pre-hire screening. The traditional hiring process consisted of a cursory review of employment history and a visual interpretation (interview) of the candidate. Perhaps there was a reference check, maybe not. The bar was set very low. Today, hiring managers spend much more time, energy and money upfront to hire the right person for the job.
Many organizations have come to realize that pre-hire screening is sound business practice. The risk of a bad hire is too high; the cost is too great. A worst-case scenario is that poor hiring decisions end up in the mainstream media or go viral in social media. In most of these cases, potential employment problems likely would have been flagged with an inexpensive background check. To compound the problem, public opinion is unforgiving, and most view these mistakes as entirely preventable. This negative groundswell can impact revenue in the near-term and result in long-term damage to the brand.
Reputation management aside, there is a quantifiable cost associated with a failed hire. Employers now recognize they must hire correctly—the first time. Hiring a new employee costs money. Factor in the amount of time spent by all the people involved in the selection process, then factor in travel, hotel and meal expenses for the prospective candidate(s). There are medical costs (drug screens) associated with each candidate; perhaps there is a recruiter and recruiting fee to absorb. Once on-boarded, there are expenses of basic training so the employee can quickly become productive. The sum of these hiring costs can be significant—and it comes right off the bottom line. New data suggests that a majority of employers are turning to comprehensive pre-hire screening for all candidates, not just for certain positions.
Over the past three years, AAIM Employers’ Association has experienced a 166-percent increase in background checks and drug screens. Investigating a candidate’s work history can include local, state and federal criminal checks; driving records; employment and education verification; and even credit history.
“We noticed this strong business trend when we compared the numbers behind this unprecedented growth for us in this area. Our pre-employment services website has been a very busy, web-based product for us,” says Phil Brandt, CEO and president of AAIM Employers’ Association. “While we’ve seen employment growth as flat, we see that employers are taking advantage of inexpensive services that provide assurance about the hires they are making.”
A background check does not guarantee that an employee is a good fit or will become a highly-engaged and productive worker. However, a thorough pre-screen does provide confidence to the hiring manager. It means he or she has done everything possible to hire the right person and protect the organization from potential liability. As the economy regains momentum and more people get back into the workforce, employers can be highly selective of their next hire. Pre-hire screens are especially critical if the position involves working with children, the aged or directly with the public. One St. Louis organization employs a large number of seasonal employees who routinely interact with the public. Their stated objective is to keep their customers “safe” by conducting pre-hire screenings.
The solutions are simple to protect your organization: perform due diligence, manage the hiring process, minimize cost and mitigate risk. You can avoid a public relations nightmare and protect your brand for about $100. iBi
Larry Timm is vice president of AAIM Employers’ Association – Central Illinois Region.
