Employee background screening is a proven tool used by many organizations to battle profit-draining high turnover, low productivity, on-the-job substance abuse, employee theft and more. Additionally, checks help mitigate risks such as negligent hiring litigation and workplace violence. But when businesses are seeking ways to reduce expenses because of the slow economy, is it smart to consider lessening or forgoing background checks as a cost-saving measure? We recommend looking in other areas and here’s why.
• Beyond the protection screening provides against employee-related risks, background checks are a positive business investment given the potential losses they help avoid and the amount of return they provide. Consider the benefits that reduced turnover, internal theft and employee misbehavior could provide to your bottom line. Conversely, a bad hire can have a major devastating impact on your company’s profitability and long-term existence.
• According to the U.S. Chamber of Commerce, 30% of small business failure is caused by employee theft. Plus, shoplifting has been on the rise as economic pressures build. The results of the 2007 National Retail Security Survey, which questioned 139 U.S. retailers about shoplifting, reported a 74% rise in shoplifting incidents. Respondents stated they felt the economy was a contributing factor. According to the survey, the majority of retail losses were due to employee theft, at $19.5 billion, which represented almost half of losses (47%). Screening can be an effective weapon against employee theft and fraud. Camera surveillance systems can also provide an easy, convenient method to monitor employee actions.
• One of the biggest expenses for businesses is recruiting, interviewing and training new talent. According to a Right Management Survey, businesses that have to replace a bad hire usually spend as much as 3 times the salary of the vacated position to correct their mistake. Hiring employees who are both efficient and well-qualified can play a significant role in boosting your screening return. If not, the high cost of hiring the wrong person will only be worsened by the fact that there will likely not be as many people now to pick up the slack or as many financial resources available to cover the loss.
• Given current economic woes, job seekers may feel more pressure than ever to stretch the truth to secure employment. According to a recent study conducted by J.J. Keller & Associates, Inc., a leading provider of risk and regulatory management solutions, 55 percent of the human resource professionals surveyed said they have discovered outright lies on resumes or applications when conducting pre-employment background or reference checks.
• According to the American Certified Fraud Examiners, the average amount that a company with fewer than 100 employees loses per case of negligent hiring is $190,000. Workplace violence accounts for 18 percent of all violent crime, according to the Bureau of Justice Statistics. In light of these risks, employers are smart to always seek ways to protect their investments and employees from the financial and physical dangers of a bad hire.
• Employees hired in a sluggish economy are more likely to be asked to handle more responsibility. You need to get the best work from the individuals you employ. Making sure you hire the best people with the right qualifications is more important than ever. Background screening can tell you if they have the credentials and experience you’re counting on.
Protecting your company and employees against a new hire that may turn out to be a financial drain or a serious danger and detriment to your organization is always a good investment. Background checks can unearth criminal records, falsified credentials, lack of valid driver’s license and much more. Drug screening can identify substance abusers who have lower productivity, higher rates of workplace accidents and workers’ compensation claims and cost more in healthcare benefits.
Remember, screening pays for itself and can actually improve the financial health of your organization. Who couldn’t use that these days? According to the U S Small Business Administration, for every dollar an employer invests in employment screening, the return ranges from $5 to $16, resulting from improved productivity, reduced absenteeism, lower turnover and decreased employer liability. If you’re looking for ways to cut costs, reducing or abandoning employee background checks may actually have the opposite effect. Screening can improve profitability and provide positive results during a financial boom or draught.
Background checks are usually done quickly, often in less than 48 hours, and require minimal investment considering the big impact they deliver to your bottom line. Working with a reputable screening firm that understands the laws governing employment screening and provides accurate, timely and reliable information is imperative to attain the results you’re seeking.
To help accredited business gain the benefits of employment screening, your BBB has partnered with Advanced Background Check, a Dayton-based national background check and drug screening leader. Accredited business qualify for substantial savings on all the screening services Advanced Background Check provides, including criminal records, driving records, identity verification tools, credit reports and more. Drug screening and fingerprint checks are available through subsidiary Secure Check of Dayton. Advanced Background Check also provides camera surveillance systems through their local Advanced Digital Security division. For details, visit www.abcheck.com/bbb or call Rebecca Hamiel at 937-534-1903.