4 Reports That Should Be in Your Pre-Employment Screening
11 May 2018
Definition of pre-employment screening: Pre-employment screening refers to investigating the background of potential employees. This may include verifying identity information, criminal records, educational records, and employment history. Pre-employment screening allows you to compare applicant claims with actual data to find the right candidate for your company.
How much can you afford to spend on employee turnover? If you’re like most businesses, then not very much. This is a problem since some studies show that replacing a salaried employee can cost business owners 6 – 9 months of that employee’s income. By this logic, it could cost $30,000 to replace an employee that earns $40,000 per year. This is more than the average business can afford.
How can you reduce employee turnover and avoid the extra costs?
A pre-employment screening, or background check, will help you hire the right employee the first time. It can show if your candidate is reliable, has an accurate work/education history, or meets the legal requirements for the position. This will seriously reduce the risk of turnover and save you all sorts of HR headaches.
There are lots of reports you could include in your pre-employment screening. Let’s review 4 of these reports when they’re necessary, and the risks of skipping pre-employment screening.
The risks of skipping a pre-employment background check
The employment screening process isn’t just another compliance box to check off. It’s a step that provides real hiring benefits and protects you from unnecessary expenses. Here are a few risks that you can mitigate by running a background check.
The last thing you want is to get slapped with a lawsuit, especially one that could have been easily avoided. Negligent hiring is a legal term that’s used when an injured party files a lawsuit against an employer claiming they should have known about the guilty employee’s background.
According to Greenhouse Software, Inc. employers lose these cases about 70% of the time and the average lawsuit is estimated to be $1 million. This type of lawsuit could seriously hurt your company or even put you out of business. It’s not worth the risk.
Wasted company money
Hiring a new employee can cost a lot of money, often tens of thousands of dollars. And that’s when you hire the right employee the first time. Hiring the wrong employee can seriously inflate your hiring costs.
When an applicant lies about their experience and gets away with it you could waste thousands of dollars in training, recruitment, and company funds. For example, if your new employee isn’t meeting job expectations you’ll have to provide extra training, which can be costly. If that doesn’t work, then you’ll have to start the hiring process all over again.
The wrong employee can also have a negative impact on company morale. Their lack of expertise can slow down projects, frustrate good employees, and could even hurt company culture.
Misleading background reports
A bad background report isn’t just inconvenient, it can actually open you up to a lawsuit. If you wrongfully deny employment or a promotion based on inaccurate background check results, the applicant could file a class action lawsuit against you.
Here are a few steps that will help you get the best report possible:
Work with a screening service that’s compliant with federal, state, and local laws.
Don’t partner with a screening service that promises instant results.
Don’t choose based on cost. Paying more for an advanced background check is way cheaper than dealing with the fallout from a bad hire.
Penalties for lack of compliance
In some industries, background checks are required by local, state, or federal statutes. Education, healthcare, and government are a few industries that require background checks. In these cases, you could be hit with penalties for not complying with the law.
This is where having a trusted background check partner can make a real difference. They’ll be able to help you choose the right background check for your industry and region. Taking this step will help you maintain the trust of employees and clients, as well as avoid bad PR from penalties.
What reports should be included in your pre-employment screening?
The reports that are important for one industry may not be necessary for another. So it’s important to understand what each report will show you.
The basics of any pre-employment screening report are identity verification and criminal history. Additional products are recommended based on the position sought and the employer’s industry. For example, a credit report might be ordered when a company is hiring a CFO. Employment and education verifications are used to confirm a candidate’s resume data, while a professional license verification may be needed in licensed professions such as nursing. Employers should work with a screening service to design a package to fit their needs.
Now let’s dive into what each report in your pre-employment screening covers.
1. Identity verification
In 2017 16.7 million individuals were affected by identity theft. Surprisingly, the most common reason for identity theft is employment or tax-related fraud, which accounted for 34% of all cases. A comprehensive background check can help you rest easy knowing that your candidate is who they say they are.
Your background report should also verify whether or not the candidate is eligible to work in the United States. To do this, you’ll need to work with a screening service that’s an authorized agent of the Department of Homeland Security’s E-verify program. This will allow the screening service to leverage E-verify post-hire to give you a clear answer on a candidate’s legal standing.
In addition to these points, your report should also include SSN (social security number) verification. This has several benefits, such as ensuring the candidate’s SSN and name match the record on file. But an SSN trace goes deeper than that. If a candidate has legally changed their name, then the reports will show any convictions related to their previous names.
2. Criminal Record Checks
Checking on a candidate’s criminal history is essential to the safety of your business and employees. Running a thorough check will help you get the whole picture. For example, if you only reviewed the county records you might miss felonies at the federal level. Here are the reports that you can include in your criminal record check.
County-Level Criminal Search
This report will give you access to criminal history records at the county court level, such as misdemeanors or felonies.
State Criminal Search
These searches focus on the states where the candidate has previously worked or lived, which gives you an extra layer of assurance and protection.
Federal Criminal Search
A federal criminal record search shows crimes that are prosecuted by federal agencies, like the FBI, DEA, and ATF. This search might show crimes related to illegal possession/distribution of drugs or firearms, kidnapping, embezzlement, and other major felonies. It will also reveal any crimes committed on federal land. These criminal records are not included in statewide or county-level criminal searches.
Trusted Employees provides a variety of criminal record searches to help you stay compliant and feel secure in your hiring decision. These include:
While additional searches aren’t always necessary they can be very useful depending on your industry. Some common public record searches include:
Sex offender registries
Motor vehicle records
It’s important to customize your reports to your industry so that you get the information you need to make good hiring decisions. While a nanny agency might be more interested in sex offender registries, a trucking company would probably request a motor vehicle records check. By understanding what’s included in these reports you’ll be able to add the reports that matter for your industry.
4. Verifications and Credentialing
In a survey from CareerBuilder 75% of HR managers reported having caught a lie on a resume. If you’re looking to fill a skilled position it’s critical that you verify your candidate’s education and past employment.
Some jobs require an applicant to have a specific degree. Hiring a candidate who lied on their resume could have a negative impact on company productivity or even create a liability for your company. For example, if someone lies about having a nursing degree this could result in serious injury to the patients under their care and even a lawsuit.
Education verification reports should always include the highest degree obtained, graduation date, institution name, and areas of study. These reports can help you determine if a candidate meets all the job requirements before you hire them.
“The only source of knowledge is experience.” – Albert Einstein
Finding talent takes time and money. You don’t want to waste yours on people who lied on their application. Running an employment verification check can help you see where the candidate has worked and whether they were in good standing when they left the company.
Other checks to consider:
Professional Reference Check
Licensing and Professional Certification Verification
Next Steps for Your Team
The first step in getting the best background check possible is determining your company’s needs. Ask yourself a few questions like these:
Which reports do I need to run to stay compliant?
Are there any reports that could decrease my liability?
Does this position have any educational or licensing requirements?
These are just a few questions that could help you get started. If you need help choosing the right report for you, our team is ready to assist! We can help you analyze your needs and then create a custom report just for you. Set up a time here to get started.