Over the past few months, several local businesses were victimized by some very costly fraud and embezzlement schemes. In almost every instance, the perpetrators were current employees or subcontractors who had unfettered access to company premises. Roughly two-thirds of these crimes were committed by employees with prior criminal convictions, but they had never been pre-screened. In the remaining one-third, the level of screening research proved grossly inadequate.
A common misconception within the business community is that pre-hire background checks are simply routine, regular or "one-size-fits-all." Some employers request identical levels of screening regardless of the position. Although that may be better than no screening at all, it is neither best practice nor the most efficient use of company funds.
Hypothetically, consider the positions of office clerk and accounting manager. The managerial-level person (especially one with financial and supervisorial duties) usually poses a far greater dollar-loss risk than the clerical employee, according to the Association of Certified Fraud Examiners. Hence, increased screening for the potential manager is both lawful and prudent.
Many employers believe ALL applicants should be free of criminal convictions which could be relevant to the position. From an investigator's perspective, it is rather hard to disagree with this logic. Unfortunately, California does not have an effective statewide criminal conviction database available to the private sector. Therefore, a good strategy regarding research is to check the applicant's current county of residence, along with other venues where he/she has lived in recent years. Of all the applicants screened each month for our clients, an average of 8 percent had felony and/or serious misdemeanor convictions within the past seven years. Many experts conclude that past behavior is often an excellent indicator of future conduct. Consequently, employers may be wise to factor this into their hiring decisions.
A driving record should be obtained to evaluate potential risk for on-the-job auto accidents when the position also requires company-related driving (office errands, off-site meetings, deliveries, etc). Such mishaps could create a significant liability for the employer. Additionally, driving records are useful in verifying identities/aliases, birth dates, and DUI's. They also reveal suspended or revoked license status.
For those seeking upper-level positions, such as accounting manager, it is appropriate to further search for federal-level convictions, recent bankruptcies, unpaid tax liens, unsatisfied judgments and related concerns. College degrees and professional certifications need confirmation since half of these are exaggerated or outright bogus, as reported by the National Student Clearinghouse. Prior employers should also be contacted for their feedback. If the prior employer is uncooperative, the applicant can be asked to provide copies of recent performance evaluations and separation documents.
Any company considering the outsourcing of its hiring functions should proceed cautiously. Insist on proof of the investigative agency's state P.I. license, along with a current liability insurance certification (preferably, naming the company as an "additional insured"). With an abundance of some questionable Internet-based services that are only a few key-strokes away, use care when selecting a provider and always include your employment counsel in the process. Several California and federal statutes pertain to screening/hiring techniques. Authorization requirements are very specific and discrimination is prohibited.
Failure to conduct reasonable pre-employment checks often creates adverse consequences, a fact that so many businesses can attest to firsthand. Conversely, a practice of relevant, screening directly benefits a company and its employees. Crime-free workplaces are the most productive and enjoyable for all. Remember, many serious losses can be completely avoided, IF we learn from the mistakes of others.
Gordon Schmidt can be reached at [email protected]
A common misconception within the business community is that pre-hire background checks are simply routine, regular or "one-size-fits-all." Some employers request identical levels of screening regardless of the position. Although that may be better than no screening at all, it is neither best practice nor the most efficient use of company funds.
Hypothetically, consider the positions of office clerk and accounting manager. The managerial-level person (especially one with financial and supervisorial duties) usually poses a far greater dollar-loss risk than the clerical employee, according to the Association of Certified Fraud Examiners. Hence, increased screening for the potential manager is both lawful and prudent.
Many employers believe ALL applicants should be free of criminal convictions which could be relevant to the position. From an investigator's perspective, it is rather hard to disagree with this logic. Unfortunately, California does not have an effective statewide criminal conviction database available to the private sector. Therefore, a good strategy regarding research is to check the applicant's current county of residence, along with other venues where he/she has lived in recent years. Of all the applicants screened each month for our clients, an average of 8 percent had felony and/or serious misdemeanor convictions within the past seven years. Many experts conclude that past behavior is often an excellent indicator of future conduct. Consequently, employers may be wise to factor this into their hiring decisions.
A driving record should be obtained to evaluate potential risk for on-the-job auto accidents when the position also requires company-related driving (office errands, off-site meetings, deliveries, etc). Such mishaps could create a significant liability for the employer. Additionally, driving records are useful in verifying identities/aliases, birth dates, and DUI's. They also reveal suspended or revoked license status.
For those seeking upper-level positions, such as accounting manager, it is appropriate to further search for federal-level convictions, recent bankruptcies, unpaid tax liens, unsatisfied judgments and related concerns. College degrees and professional certifications need confirmation since half of these are exaggerated or outright bogus, as reported by the National Student Clearinghouse. Prior employers should also be contacted for their feedback. If the prior employer is uncooperative, the applicant can be asked to provide copies of recent performance evaluations and separation documents.
Any company considering the outsourcing of its hiring functions should proceed cautiously. Insist on proof of the investigative agency's state P.I. license, along with a current liability insurance certification (preferably, naming the company as an "additional insured"). With an abundance of some questionable Internet-based services that are only a few key-strokes away, use care when selecting a provider and always include your employment counsel in the process. Several California and federal statutes pertain to screening/hiring techniques. Authorization requirements are very specific and discrimination is prohibited.
Failure to conduct reasonable pre-employment checks often creates adverse consequences, a fact that so many businesses can attest to firsthand. Conversely, a practice of relevant, screening directly benefits a company and its employees. Crime-free workplaces are the most productive and enjoyable for all. Remember, many serious losses can be completely avoided, IF we learn from the mistakes of others.
Gordon Schmidt can be reached at [email protected]