Background screening is a critical part of the hiring process. Businesses need to minimize the financial, reputational, and legal risks of bad hires. Poor economic conditions may drive some companies to cut costs in 2020, but background screening shouldn’t be one of them. Here’s why your organization should continue to emphasize quality background screening.
Bad hires can have an outsized impact on their teams and the broader organization. Some analysis shows that a bad hire can cost companies as much as $240,000[1]. There is a clear, broad financial implication for hiring the wrong candidate. Employee misconduct can expose your company to legal liability if your background screening processes are inconsistent. There are also brand or reputational risks that can have lasting consequences. Employee misconduct can make you a less attractive employer and harm future recruiting efforts.
Bad hires can be costly. That’s especially true when filling senior leadership or executive roles. Those leaders set the direction of your organization. They devise a high-level strategy, manage company budgets, and lead a large number of employees. It would be best if you maximize your odds of finding the right candidate because bad senior hires can taint client relationships and increase turnover. One of the best ways to improve those odds is a thorough background screening.
Aside from traditional screening criteria, senior executives require additional scrutiny. Additional screening must focus on candidates’ integrity and previous handling of company funds.
Reputational Screening: Determining the integrity of senior-level candidates is critical. It’s crucial to screen social media for postings that challenge that integrity. Those postings may include references to drugs and alcohol or other high-risk behavior. It’s also advisable to interview peers and former coworkers to determine the candidate’s trustworthiness.
Pending Litigation: State and federal litigation may suggest a history of misconduct; this is especially true when litigation involves former employers or coworkers exist. Most court systems offer online searches of previous cases.
Membership & Affiliation: Another key screening criteria involves conflicts of interest[2]. For example, a candidate might be a corporate board member of a competitor. It’s also essential to determine whether candidates’ spouses or relatives are members of any boards. These conflicts of interest must be identified and adjudicated before an offer is extended.
Corporate Financial Records: Financial records of publicly held companies are easy to acquire. Additional screening is necessary to secure records of businesses candidates own or manage. Any impropriety in those financial records reflects a risk of misconduct in future positions.
These additional screening criteria help identify issues that may not be captured in a traditional background check. Expanding both the scope and depth of your background screening process ensures you hire candidates with the highest integrity.
A top-tier PEO (Professional Employer Organization) can augment your existing HR infrastructure. Most small to medium-sized businesses can’t afford more than essential HR functions. A PEO can tailor a custom suite of services to meet your unique business needs. A PEO provides numerous benefits for small and medium-sized businesses:
Reduce Costs: Outsourcing HR functions means you need fewer full-time HR personnel. Get the HR support you need without expensive overhead.
Focus On Core Business Functions: Using a PEO lets you focus on driving revenue rather than day-to-day HR functions. A PEO can screen applicants, so you only talk to applicants you seriously consider hiring.
Scale To Meet Business Needs: One of the lasting benefits of a PEO is flexibility. Your business doesn’t need a full suite of HR services at all times. You can scale HR services up or down depending on your unique requirements. Leverage a PEO to get only the support you need.
Background screening is not something to cut during a recession. A thorough hiring process is even more critical when your company can’t afford to get it wrong. A comprehensive background screening ensures you hire the right candidates and get the most out of your workforce. America’s Back Office can help your organization develop scalable HR infrastructure to meet evolving needs.