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Small businesses are particularly vulnerable to negative impact of a bad hire. Learn how to reduce the risk of making a bad hire through the use of background checks.
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Using Background Checks To Protect Your Business
Presented by
W. Barry Nixon and
Brandman University, School of Extended
Education
Brandman University
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The Brandman University has been serving the needs of adult students for over 50 years
.
• Originally located on the El Toro Base since 1958.
• Twenty six campuses throughout California & Washington (Including Irvine, San Diego, Riverside and Ontario).
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Brandman University, Part of the Chapman University System
Providing Education and Training for Today’s Workforce
– School of Education
– School of Business & Professional Studies
– School of Nursing
– School of Arts & Sciences
– School of Extended Education
• Corporate training solutions
• K-12 Professional Development and Credentials
• Business, Management & Leadership
• Certificates, Certifications, and more
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Today’s Presenter
W. Barry Nixon, SPHR COO, PreemploymentDirectory.com
Co-Chair – International Committee, NAPBS (National Association of Professional Background Screeners)
Co-Author – Background Screening and Investigations: Managing Hiring Risk from a HR and Security Perspective
Publisher – Annual Background Screening Buyers Guide; The Background Buzz (the ezine for professional background screeners)
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Have You Ever Made a Bad Hire? If so, which of the following did you experience?
Please Check All Answers That Apply:
___ I had to spend a lot of time dealing with this person that took me away from dealing with other important business
___ I had to spend time cleaning up their mess and re-doing a lot of their work
___ The person caused problems with our customers
___ The person created problems with other employees
___ We lost money because of the person’s errors
___ We had to hire a new person to replace them
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Impact of Making a Bad Hire
Lost productivity Affected employee morale negatively Negative impact on client relations Fewer sales Cost to recruit and train another worker 27 percent of U.S. employers reported a single bad hire cost more than $50,000.00 when all costs were considered.Source: CareerBuilders.com
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Reasons Why the Employee Was a Problem
Quality of work was lackluster (67%)
Failure to work well with other employees (60%)
Negative attitude (59%)
Attendance problems (54%)
Complaints from customers (44%)
Failure to meet deadlines (44%)
Source: CareerBuilders.com
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Reasons Why the Employer Made the Hiring Mistake
Needed to fill the job quickly (43%)
Insufficient talent intelligence (22%)
Sourcing techniques need to be adjusted per open position (13%)
Fewer recruiters to help review applications (10%)
Failure to check references (9%)
Lack of strong employment brand (8%)
Source: CareerBuilders.com
Why Should You Be Concerned About Background Checks
A bad hire can disrupt your company by causing missed sales opportunities, strained client relationships, employee relation issues, legal issues and much more.
40 – 60% of applicants falsify or misrepresent information on their resume
60% of losses due to fraud are committed by employees
The cost of a bad hire can exceed $50,000.00
California leads the nation in hosting diploma mills that produce fake degrees
Negligent hiring lawsuit’s cost can exceed $800,000.00
Reputation Management and protecting your Brand Name
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Why Should You Be Concerned About Background Checks
Screening provides a comprehensive picture that helps you select the best candidate that meets your job requirements.
Screening will help increase retention rates.
– A study by the Aberdeen Group indicated
• The first year retention rate of new hires that are screened is 89% compared to 58% when no screening is completed.
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Be Aware of Fake Degrees and Diplomas
More than 100,000 fake degrees are sold
in the U.S. annually
Accredibase.com
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Red Flags That May Indicate Fraud:
Degrees that were earned in a suspiciously short amount of time
Credits that were earned based off “life experience”
University addresses that go to P.O. Box numbers or suites
University is located in city where applicant has no record of residing
School is not accredited
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Tip: Never use the phone number for verification provided by the applicant. Google the school’s number and then call.
Be Aware of Fake References
The World’s Leading Virtual Reference ServiceUnemployed? Fired? Forced Out? Bad Reference? Create an entirely new work history using our fake reference service. Our fake companies are so real, our Virtual Companies actually get sales calls from the public. If your former employer won’t give you a good reference, we can replace him.
http://thereferencestore.com/
Be Aware of Fake References
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How to Determine the Type of Background Check You Should Conduct
Type of Background Checks Available
Identity verification: Social Security, Fingerprinting
County, State and Federal Court Criminal Records
Motor Vehicle Records
Credit check for employment purpose
Employment Verification
Education and Credential Verification
Immigration status/ E-verify
Sexual Offenders
Federal and State litigation history
Terrorist Watch Lists
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How to Determine the Type of Background Check You Should Conduct
The type of background check you should conduct should be based on the nature of the work that will be performed and competencies required.
Is the position a ‘Sensitive Job’ that has considerable risk associated with carrying out its duties?
Where the applicant has lived and/or worked?
U.S. Immigration Statistics
More than 12% of the current U.S. population consists of immigrants.
Large number of U.S. citizens have spent time living and/or working abroad
24% of employers have hired workers from outside the US for jobs that have been difficult to fill, according to a 2011 SHRM poll
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Which of the following jobs do you think are considered ‘Sensitive Jobs?’
___ Purchasing Manager
___ Sales Representative
___ C–Suite Executive
___ Janitor
___ Executive Administrative Assistance
___ Office Manager
___ Information Technology Analyst
___ Delivery Driver
Determining Sensitive Jobs
Senior management.
Care, safety, and security of people or property (includes safety, occupational health, security, human resources, child care workers, camp counselors, teachers, etc.).
Direct access to, or control over, cash, checks, credit card account information
Authority to commit financial resources of the organization greater than _____$$$$_______ .
Possession of building master or sub-master key access to facilities (includes custodial services, security, etc).
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Determining Sensitive Jobs
Control over organization wide or departmental business processes, either through functional roles or systems security access (includes network administrators, system programmers, HRMS and Payroll functional leads).
Access to detailed personally identifiable information about employees, customers or the public which might enable identity theft.
Regular operation of company vehicles as part of assigned job duties (includes delivery staff, commercial drivers, sales, field technicians, meter readers, etc).
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How to Choose the Right Background Check Provider
for Your Business
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Poll Question?
Which of the following is the most effective source for accurate criminal records?
___ Company conducts courthouse searches for records
___ The company uses national databases as the core of their record searches
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Choosing the Right Background Screening Firm
Be careful when comparing prices.
Be leery of claims that “we can find anything out about anyone.”
Be leery of the promise that searches will always get done in under 24 hours or some other arbitrary timeline.
Be leery about a “one-size-fits-all” approach.
Be cautious of firms that use national database searches as the cornerstone of their record search.
What is the firm’s customer retention rate?
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Choosing the Right Background Screening Firm
A reputable background screening company will steer an employer through the screening process – not only the legal aspects of the process, but also the administrative aspects.
A reputable background screening firm will want to understand your sourcing and recruiting process.
Verify firm adheres to industry best practices as defined by the National Association of Professional Background Screeners (NAPBS).
Will firm provide you updates on legal requirements and will you have access to compliance specialist?
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Download Free copy of ‘How to Select a Background Screening Firm 4.0’ at www.PreemploymentDirectory.com (see Background Screening Publications)
Pitfalls (3 key reasons pre-screening fails)
Not getting the right records.– Searching criminal, but not civil, litigation
records.
Not searching in the right places.– We live in a mobile society. Individuals will move
to escape past indiscretions.
Not spending the right amount of money.– Spending more money than needed if unaware
of inexpensive alternatives; spending so little and not getting enough data.
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Best Practices in Conducting Background Checks
Having the right level of person responsible for the pre-screening and providing training to people involved in the pre-screening process on how to review the investigative reports and make an effective assessment.
Use a Authorization & Release form for applicant to authorize you to get information from previous employers and provide consent to conduct background check
Follow a defined process for notifying applicants of intended adverse action and give them the opportunity to dispute inaccurate information.
Firm fully complies with Fair Credit Reporting Act.
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Best Practices in Conducting Background Checks
Selection of a pre-screening firm should be done as carefully as you would select a CPA firm to handle your financial affairs. The right vendor can keep you out of hot water while the wrong one may get you into hot water. Firm has a defined process that is followed for protecting sensitive information acquired. Firm adheres to industry best practices as defined by National Association of Professional Background Screeners (NAPBS)
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Topical Issues in Background Screening
Ban the Box Social Media monitoring Credit Checks for employment purpose Use of Arrest and Conviction Records Infinity Screening
In Search of the Holy Grail
As you develop or seek to improve your pre-screening program keep in mind that all background investigations are imperfect. They are, by definition, limited by the time necessary to conduct them, the availability and quality of records, as well as what economics dictates re the scope of an investigation.
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Resources
PreemploymentDirectory.com
National Association for Professional Background Screeners, NAPBS.com
2013 Annual Background Screening Industry Buyers Guide (free copy to all participants)
Society for Human Resource Management (SHRM.org)
ASIS International Background Screening Guidelines (ASISonline.org)
Barry can be reached at 949-770-5264 or wbnixon@preemploymentdirectory.com
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