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Case Study: Outsourcing Critical HR Functions Limits Company Liability

Employee screening takes the heat off real-estate enterprise.

by Terry LaMotte

As a large commercial and residential real estate company, we have to be interested in limiting our liability wherever possible. Since our property management employees access resident’s homes as porters, maintenance and management staff, we need to ensure that we hire individuals with backgrounds that won’t be harmful to our residents, or otherwise jeopardize our business.

Prior to the merger in 1993 of the Sares Company, a commercial enterprise, and The Regis Group, a residential company, checking backgrounds was limited. Then in 1997, we decided that outsourcing services such as employment screening was clearly the answer to solving this ongoing concern. Initially we only ran background checks on our property management applicants, but two years later, we began checking all positions within our company, mainly because of the dramatic improvement in the quality of the employees we hired as a result of doing background checks.

When we decided to conduct background screening, we researched several employment screening companies. We interviewed several providers, since we intended to overlay the existing program into a company-wide approach for the newly merged entity, and needed to see how a screening company “fit” into the new scheme. We chose APSCREEN based on the presentation of its products and services, as well as references that spoke highly of the company—in particular its customer service.

An example of a good strategy with respect to vendor integration is our hiring policy, which requires that we check credit first and use that information, as well as other identifying information about a candidate, not only for its face value, but also as a tool in researching criminal convictions in areas not disclosed by a candidate.

We always use a multi-step “candidate identification process” that has clearly worked for us throughout the years in accurately identifying and/or supplementing the identification (by revealing undisclosed aliases) of our candidates. We also always conduct reference checks. It’s not only important that your vendor understands how to do this properly and within the law but is capable in extracting the kind of information that we can base a sound hiring decision.

We have recently become aware of additional, free information available to us through our vendor regarding persons and companies barred from doing business under the federal government’s Excluded Parties List System (EPLS), and those whose assets may be under the scrutiny of the Office of Foreign Assets Control (OFAC). It’s important that your vendor provides this kind of ancillary information as part of their standard package. You need to know that the company cares about its work as much or more than you do, and that it truly believes it has as much of a stake in the hiring of prospective employees as you do.

For others looking to outsource HR-related services, we recommend finding a reputable vendor that has as at least the following:

  • Longevity. Longevity suggests that a firm has weathered the storm of changing times and has demonstrated that it is serious about being in its industry.
  • Customer Service. Be sure it’s a company that has people you can build a relationship with. In the information business,the allure of automation as a cost-savingmanagement philosophy may not always transfer to the end user.
  • Veracity. Research what the company is saying against what you know, and more importantly, what you don’t know. Sales claims abound when profit is at stake, so it is up to you to determine who needs your business, and who wants your business.
  • Cost. Price certainly isn’t everything. Look for a knowledgeable support staff that is highly trained in their task. Ask how they would handle different scenarios. Find out if they can testify competently for you if the need arises. What is the vendor’s daily working and depth of knowledge of the HR function and applicable laws?

As a human resource professional with 550 employees, I have one assistant whose primary focus is benefits and a risk manager for worker’s compensation. For me, outsourcing services such as employment screening makes great sense, because it is such a very sensitive and sophisticated process that requires a careful eye.

We utilize a full-service 401(k) provider; outsource the handling of our unemployment claims, Section 125, and COBRA programs; and use a benefits consultant for contract negotiations. As with employment screening, these disciplines are actually specialties and require up-to-the-minute compliance and attention to detail at levels that neither I nor my assistant have the time for.

With a good outsourced vendor in place I can limit myself to actual management, which means that I can make more effective decisions about the future of my department, and determine the best strategy for the management of the company’s most important assets—its people.

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