What is background screening?
A comprehensive background screening is a compilation of data assembled on an applicant that may be used during the hiring process. This is done through a third party service know as a Consumer Reporting Agency, which is regulated by the Fair Credit Reporting Act. The information compiled by the Consumer Reporting Agency can be used in the context of employment, housing applications, or for volunteer services. This Consumer Report may include “criminal history information, civil records, driver records, employment records, educational information, license verification, credit information and reference checks” (About Screening). These searches will help to prevent negligent hiring and only serve to increase the quality of your applicant pool.
Overview – Risks of not doing background screening
Negligent Hiring takes place when “a claim made by an injured party against an employer based on the theory that the employer knew or should have known about the employee’s background which, if known, indicates a dangerous or untrustworthy character” (US Legal, Inc.). Negligent hiring not only creates danger for employees but can harm an organizations finances and infrastructure. According to a recent CareerBuilder study, 69 percent of employers suffer consequences from a bad hiring decision. 41 percent of those employers estimate the cost of those consequences to be over $25,000. Additionally, 24 percent of organizations reported a bad hire costing them more than $50,000 (Garsa). Further risks of not conducting background screenings in order to prevent bad hires include litigation, workplace violence, and employee theft.
Negligent Hiring Litigation
Consider the following Negligent Hiring court case based out of Arkansas. In 2010, a jury in an Arkansas Federal Court awarded a family $7 million in damages due to a wrongful death lawsuit against a trucking company. A driver for the trucking company crashed only 19 days after his hire and killed an innocent driver. If the trucking company had conducted a thorough background screening on this driver they would have seen that his license was taken away twice due to unsafe driving. A driving history would have shown these penalties, deterring any potential employers from putting this driver back on the road. Therefore, due to the trucking companies lack of research, the court held the trucking company 75% liable for the wrongful death and the driver only 25% liable (Rosen). It is the responsibility of every employer to execute their due diligence when making hiring decisions, being careful to not hire an individual who may pose a threat to the public in the line of duty or create a violent work environment.
It is estimated that 65 million people in the United States – more than one in four adults –have criminal records (Rodriquez). Therefore, it can be presumed that a significant portion of your hiring pool could be part of that ratio. Consequently, a study published in 2012 reported that over one-third, or thirty six percent, of organizations reported incidents of workplace violence (Background Check Articles). Without a criminal background history of applicants and new hires, the workplace is being subjected to potential violence. In order to protect the rights of employees to work in a safe and secure environment, criminal histories must be considered in the hiring process. A criminal history will show previous indiscretions committed by potential hires and assist in protecting organizations from negligent hiring. However, physical threat is not the only risk of disregarding comprehensive background information on your applicants.
A bad hire can not only create physical harm, but can also financially harm an organization. According to a recent National Retail Security Survey the total impact of employee theft on the U.S. economy in 2017 was $46.8 billion (Moraca). Employee theft can involve stealing money, time, supplies, merchandise, and/or company information. Fortunately, appropriately screening candidates can help to mitigate this risk as well. Conducting background screenings will decrease the number of applicants who are trying to hide something and increase the number of applicants who want to work in a secure environment. Using the information obtained from a Consumer Reporting Agency and using high standards when evaluating these reports can help to alleviate unnecessary losses to an organizations finances and public image.
Another way to gauge an applicant’s trustworthiness is through verification services. This can include verifying an applicant’s employment history, education history, and personal references. With employee theft so rampant, contacting previous employers and coworkers can provide insight into the applicant’s character and work history. Verification services will also help to prevent hires from having false credentials and misrepresenting an organization. Nearly half of senior employees have reported knowing that their applicants submitted misinformation on their resumes (Lying Resumes). You can learn more about the importance of verifications services here.
Employers have a common goal of wanting to hire the highest quality applicants, while also having a moral and legal obligation to make sure those applicants do not pose a threat to those around them or the organization at large. Comprehensive background screenings, conducted by a professional background screening firm, will help accomplish both of these objectives. Mitigating the risks of negligent hiring will decrease employee turnover, increase the quality of your hiring pool, and help to maintain a positive company image. If more organizations utilized professional back ground screening, the workplace would be a much more secure and successful environment.