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CEO’s Letter: Little Things Aren’t Little When They Are Missed

I once told one of my grown kids that “there is nothing more expensive than a cheap lawyer.” I have a lot of these little aphorisms. I’ve appropriated ones like “a penny saved is a penny earned.” Most people rely on these little sayings for building frameworks around things that matter. Unfortunately, there are few good aphorisms in HR. If there was ever an area that needed good aphorisms, it is background screening. If this often-overlooked aspect of the hiring process is done poorly, it can lead to litigation, turnover, and workplace danger.

That’s right, danger. Background screens are often seen as a commoditized aspect of HR. All firms subscribe to the same databases and all reports are based on the same data, right? Wrong!

Our recent research on pre-employment background screening (sponsored by CSS, Inc.) reveals some troubling news about the lack of engagement by the buyers of pre-employment screening. Let’s cover some salient statistics. There are more than 500 workplace-related homicides on average a year; employees steal an estimated $18 billion just from retail firms; and the average cost of a bad hire is about $17,000. Does that get everyone’s attention? The research report details the need for accuracy, compliance, and timeliness.

Accuracy is important, and organizations need to vet providers that have multiple mechanisms in place to ensure the report relates to the candidate who is applying and that the data is accurate. Quality control aspects are critical and interlinked with compliance. The recent decisions relating to the interpretation of the Fair Credit Reporting Act with respect to background screening has spawned multiple legal cases. Part of compliance is now “responsiveness.” If the response from the screening provider takes too long, organizations will either be forced to extend time to fill considerably—or worse—make provisional offers contingent on the background check. If a problem arises in the screening report and an organization wants to take an adverse action, such as rescinding an offer, the candidate has the right to grieve and appeal—and that appeal must be considered by the potential employer.

However, there is an easy way to avoid the problem: Get a timely report. It is that simple. Many contracts have strict service level agreements (SLAs) that are enforced, but time to fill does not seem to be considered as rigid as more easily measured metrics like network uptime in an ITO agreement.

The research also uncovered that there is confusion between membership in the National Association of Professional Background Screeners (NAPBS) and certification. Certification is more rigorous than having an association membership, but the logos are similar enough to confuse survey respondents. Curiously, the sources used by organizations to learn about background screening providers differed greatly based on size of the company. For example, our own HRO Today Baker’s Dozen received an average score of 27 percent, but for companies over $50 million, the ranking was used by more than four out of 10 buyers. Industry associations are the most often cited and the prevalent ones are SHRM and NAPBS.

Pre-employment background screening is not an overly complex process, although there are many dimensions to it. However, it is one area—given its unobscured forthrightness—that should never be a problem. It is binary unlike so many other judgment calls in HR. Either a candidate meets the criteria or they do not. The issue of “the devil is in the details,” to paraphrase an old aphorism, is about how well your provider does it for you. The quality aspect and metrics around it should be well documented, and organizations may be surprised to learn that many smaller providers meet or exceed the service levels of industry leaders. Because service providers all draw from the same data, this is something to consider. Learn more findings from the research on page 44, and see the complete report at www.hrotoday.com/category/ market-Intelligence/research.

Elliot H. Clark
CEO

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