Screening Lapses by Small Businesses Invite Large Risk


By Roy Maurer December 17, 2014

Neglecting to verify candidates’ employment references and education credentials, failing to drug-test applicants, and using social media to check up on potential new hires are some of the most common screening oversights and missteps small businesses make, according to HireRight, a leading provider of background checks.

The 2014 HireRight Small Business Spotlight focuses on 593 respondents with workforces of fewer than 100 employees. “For small businesses, a bad hire represents a greater proportional cost for the organization than that of large enterprises since every key employee has a huge impact on the business and its customers. Even a single bad hire can stunt a small organization’s future growth,” said Rachel Trindade, vice president of marketing for HireRight.

The report indicates that employment screening is becoming more critical for small businesses, and highlights the value that screening provides, as 64 percent of respondents said screening has exposed a person who lied on a resume or application and 54 percent reported that background checks uncovered issues that would not have been found otherwise.

According to the survey respondents, the top benefit of screening job candidates is improved quality of hires (53 percent). Other benefits respondents noted include a safer and more secure workplace (49 percent) and better regulatory compliance (36 percent).

Despite the reported benefits of screening, many small organizations don’t do as much as they could, possibly leaving themselves vulnerable. When screening a job candidate, respondents reported that criminal searches (97 percent) and identity verification (81 percent) were the most common checks. But only 58 percent of respondents verify previous employment history, and only 32 percent verify education credentials.

“Verifying past experience and education is an important component of background screening. In small organizations, an individual employee is often the primary means of building brand reputation, so ensuring that employees have required credentials and experience are important qualifiers,” said Trindade.

Some companies’ failure to conduct drug and alcohol screening is another concern, according to HireRight. The survey found about two-thirds of respondents in small organizations (68 percent) perform drug and/or alcohol testing on all employees, and 65 percent test job candidates. That leaves 32-35 percent that do not. In addition, only about one-quarter of contingent and temporary employees (27 percent) undergo drug and alcohol screening either pre- or post-hire. “Drug use in the workplace can lead to increased risk of accidents, absenteeism and reduced productivity,” said Trindade. “Maintaining a safe and productive environment for both workers and customers is a top priority of organizations, and drug and alcohol testing is one step to ensure that the workplace is secure,” she said. While several methods of testing are available, the most common method is urinalysis (92 percent), followed by breath alcohol testing (25 percent).

Another problematic area for small businesses is the use of social media for screening job candidates. While the majority of small business respondents (66 percent) do not use social media for screening, about one-third (33 percent) indicated they do. “This can be an issue for companies because information accessed on some sites can be biased, inaccurate, or potentially even discriminatory, and can lead to problematic hiring decisions,” said Trindade. “While using social media is an effective way to recruit job candidates, it is not a good way to screen prospective employees. Those utilizing this method may want to revise their policies,” she said.Trindade recommended small organizations use the same best practices often used by midsize and large companies to ensure quality and commonality in hiring practices:

  • Create a core list of background checks to use on all new hires.
  • Add additional checks based on specific job duties of a new employee.
  • Document and implement policies and procedures.

For example, subject to state laws, a core screening could include a criminal background check, I-9 verification, and verifying previous employment and education. Credit reports and more in-depth criminal background checks could be added for new employees with access to financial information. “Conducting a core-set background screening which is then modified by job responsibilities is not only cost-effective, but could reduce the risk of hiring discrimination, since all applicants would receive similar background checks,” said Trindade.

Roy Maurer is an online editor/manager for SHRM.

Follow him @SHRMRoy


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