June 10, 2013
The Financial Impact of Background Screening with Chris Dyer
As a business owner or HR professional, you likely have some knowledge of background screening.
While some companies are confident in their pre-employment screening process, others don’t have a strategy in place. Instead, they interview and hire applicants based on the knowledge provided to them.
This is a topic that I have a deep interest in, being that I worked in the background screening industry for a couple of years before becoming a full-time writer.
During this time, my responsibility was to sell background screening services to companies of all sizes, spanning a variety of industries. I had a good amount of success, however, there was one sticking point that I heard time and time again:
Is it really worth the money?
Some companies had no problem spending the money, as they know the service could save them from a lot of trouble (and money) down the road. Others did not understand this, and considered any money spent on pre-employment screening to be a waste.
How much does Background Screening Cost?
There is no “set” answer to this question. It all depends on the type of service you order, as well as the company you rely on to provide the reports.
For a better idea of the financial impact and benefits of background screening, I turned to one of the top professionals in the industry. Chris Dyer is the CEO at peopleG2, one of the most well respected background screening firms in the world.
Here are my questions, followed by answers provided by the team at peopleG2:
1. Despite the upfront cost of background screening, what are the long term financial gains that make it worthwhile?
Finding a reliable, long-term employee is worth more in dollars than one might think. In addition to the value of that person’s contribution to a business, having someone who can be counted on saves an enormous amount of money, time, energy and morale that go into replacing someone who turns out to be a bad hire.
Consider the immediately obvious severance costs of terminating an employee, then add the administrative time necessary to handle the paperwork. Add in the replacement costs to recruit and train a new employee along with the additional fees that might accompany that hire, such as a signing bonus, travel expenses or a finder’s fee. Don’t forget the loss of productivity due to the bad employee and the burdens placed on other staff to compensate in that situation.
In the end of the day, businesses are comprised of people, so one of the best choices an employer can make is an investment in choosing those people to make sure a productive team is in place from the beginning.
2. What are the primary benefits of screening employees before hiring?
Of course, many employers use background checks to screen for criminal activity or other issues that could pose a threat to that person’s ability to complete his or her job effectively. In addition, good screening practices may reveal additional information about how a candidate may fit into the new job.
For example, how easily a person may adapt to a new job, how well she or he may fit into the corporate culture, how the applicant stays motivated and occupied – even when between jobs, how soon the candidate may be looking for a different job, how often that potential employee may be taking “inconveniently timed” days off… Solid screening tactics may reveal numerous qualities about a potential employee’s capability.
3. Do you have any advice for those who are in the process of selecting a background screening company?
When choosing a screening firm, be sure to look for a company that avoids automated searches. Technology aids enormously in the scope of service now available when conducting background checks, but companies that rely too heavily on automated software don’t get the complete picture of a true job candidate. Software can accept or reject people based on limited parameters without thoughtful – and ethical – consideration of ability. In addition, inaccurate results, such as mistaking a job applicant for someone with the same name, can lead to big problems for employers. Careful follow-through is necessary to evaluate the real potential of any employee, so choose a firm that uses many methods to research and filter information and focuses on the human element of human relations, and one that knows exactly what information can and cannot legally be used in the process.
Though the benefits of screening are great, it is important to note that some companies don’t follow Equal Employment Opportunity Commission guidelines while vetting candidates, which leaves them open for possible scrutiny and even fines. That’s one of the biggest things PeopleG2 does to help our clients.
There you have it. If you didn’t previously understand the importance of background screening, you should now.
Business owners and HR professionals can use this information to better understand the financial impact of background checks.
Remember this: even if you don’t take part in the hiring process, it is nice to know that your employer is screening employees. This often times leads to a more enjoyable, safer work environment.