Smart staffing is critical to any business strategy. While hiring the right people can put your company on track for profit and growth, hiring the wrong people opens the door for serious business risks: unplanned productivity losses, diminished service quality, negative customer reviews – even theft or fraud.
If you think correcting an unfortunate staffing decision is easy, then you’ve probably been luckier in replacing personnel than most business owners.
Employee turnover costs companies between 90 and 200 percent of a replaced employee’s base salary on average. These replacement costs are felt to an even greater degree at small businesses, where team members are likely to wear multiple hats. Onboarding and training a new employee to cover the responsibilities of multiple positions further increases soft costs.
Solutions are neither easy to find nor implement, but entrepreneurs aren’t without recourse. Employee recruiting and screening companies increasingly cater to business owners’ HR goals, offering affordable services that include personal and professional background checks for job applicants.
Another great way to help you find out exactly what your candidates will do on the job, giving cognitive ability test lets you know whether your candidates can do the job.
The following five tips touch on several of the best practices and compliance checks for which small businesses should account as they develop their employment screening plans:
1. Confirm the applicant’s employment history.
Job applicants tend not to admit when they have exaggerated past job titles, employment timelines and salary figures, even when questioned directly. Even with an applicant’s permission to seek verification from former employers, such informal inquiries can take time and responses can lack detail.
Specialist firms like Fully-Verified can save you time, and with better results. They aggregate data from multiple sources, follow consent guidelines, and understand the compliance issues of denying an application due to the findings of a background check.
2. Confirm the applicant’s educational background and accreditation.
When an applicant lies to get a job, the entire employer-employee relationship gets built upon a false foundation. Claims of having degrees or certifications unearned aren’t simply dishonest, but also create serious compliance problems in industries that require a candidate to possess a license to engage in regulated activity.
If you think yourself adept at sniffing out padded resumes during the interview process, then you might just gawk at how many high-profile business leaders have doctored their credentials – and gotten away with it, at least for a while.
Give credentials verification services their due. It’s not enough to simply rely solely on the opinions of past employers, who themselves may have been deceived.
3. Be aware of changing background check laws.
As a resume bullet point, “convicted criminal” probably doesn’t feature on many résumés, yet America is full of potential job applicants with criminal records—65 million in 2011. Sixty-five million – a quarter of the U.S. adult population.
There is little question as to why an employer might want to know whether a job applicant has a history of committing fraud or violence, but convictions for lesser offenses may also show up on criminal background checks.
While small businesses are currently free to dismiss job applicants for many reasons, some states are moving toward tightening restrictions on the use of criminal background checks in hiring decisions. “Ban-the-Box” legislation, now gaining a foothold over a dozen U.S. states, prohibits employers from asking about a job candidate’s criminal history until after conducting an interview or making a provisional job offer.
Further, once aware of an applicant’s criminal history, businesses should tread lightly when making a hiring decision. In some cases, excluding criminal offenders could be viewed as a form of discrimination. Equal Employment Opportunity Commission (EEOC) arrest and conviction consideration guidelines may obligate businesses to consider the nature of the crime, its relation to the open position, and the time elapsed since the offense.
4. Pull credit reports with caution.
It used to be that only financial-industry employers worried about job applicants with money problems. Today almost half of all organizations (47 percent) are using credit checks in their hiring processes. Beyond theft and embezzlement concerns, employers may seek credit information to gauge an applicant’s level of responsibility or trustworthiness. Some employers check credit to comply with state laws or payment card industry standards.
Whatever your reasons, you can run into legal trouble if you don’t properly obtain consent and provide adverse action notice when necessary. Some states have laws against pulling applicants’ credit reports; others limit how businesses can use their personal financial information.
5. Consider pre-employment drug testing.
If an employee is struggling with drug or alcohol addiction, your entire organization could be at risk of experiencing the effects. Eye-opening data from the National Council on Alcoholism and Drug Abuse reveals that most Americans who use illegal drugs (70 percent) are part of the workforce, and those figures don’t account for the millions who abuse legal substances. Private employers who wish to conduct drug testing should follow the provisions offered by the U.S. Department of Labor.
Conducting thorough employment screening can require a significant outlay of time and effort for small business leaders. For help with hiring the right employees and reducing employee turnover, contact us today.