International Background Screening Resource Center: News & Events

More Than Half of Companies in the Top Ten World Economies Have Been Affected By a Bad Hire

A new study from CareerBuilder shows that hiring the wrong person can have serious implications for companies. More than half of employers in each of the ten largest world economies said that a bad hire (someone who turned out not to be a good fit for the job or did not perform it well) has negatively impacted their business, pointing to a significant loss in revenue or productivity or challenges with employee morale and client relations.

For example, among those reporting having had a bad hire, 27 percent of U.S. employers reported a single bad hire cost more than $50,000. In the Eurozone, bad hires were most expensive in Germany, with 29 percent reporting costs of 50,000 euros ($65,231) or more. In the U.K., 27 percent of companies say bad hire costs more than 50,000 British pounds. Three in ten Indian employers (29 percent) reported the average bad hire cost more than 2 million Indian rupees ($37,150), and nearly half of surveyed employers in China (48 percent) reported costs exceeding 300,000 CNY ($48,734).

The global survey, conducted online by Harris Interactive© from November 1 to November 30, 2012, included more than 6,000 hiring managers and human resource professionals in countries with the largest gross domestic product.

Best Practice Standards: The Proper Use of Criminal Records in Hiring

Hiring new employees is a critically important function in any business, government agency, or non-profit organization. Every hiring decision represents a major investment that employers must make with limited information. Checking criminal history is just a small part of this process, which may also include verifying education, prior employment and other reference information. The Best Practice Standards will help employers properly weigh adverse personal history to find those applicants who will contribute most to the productivity of the organization.

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The Long Shadow of Bad Credit in a Job Search

Nearly half (47%) of employers use credit checks when making a hiring decision, according to a 2012 survey by the Society for Human Resource Management. Most businesses use credit checks only to screen for certain positions, but one in eight, the survey found, does a credit check before every hire. Chi Chi Wu, a staff lawyer at the National Consumer Law Center in Boston, believes that using credit checks in the hiring process is a Catch-22 that can be a kind of backdoor job discrimination. “Someone loses their job, so they can’t pay their bills – and now they can’t get a job because they couldn’t pay their bills because they lost a job?” said Wu. Experian, one of the big three credit reporting bureaus, states in its marketing materials, “Credit information provides insight into an applicant’s integrity and responsibility toward his or her financial obligations.” But to Wu and others, a credit report says more about a person’s economic circumstances than his or her moral character. So far, nine states have adopted legislation that curbs the use of credit reports to judge prospective hires.

Data Brokers Urged to Review Privacy Practices After FTC Warnings

The Federal Trade Commission (FTC) sent letters to ten data broker companies warning that their practices could violate privacy rules set out under the Fair Credit Reporting Act (FCRA). Following an undercover test-shopping operation led in collaboration with the Global Privacy Enforcement Network (GPEN), the FTC indicated that the data brokers concerned were willing to sell consumer information contrary to FCRA requirements. “If you’re in a similar line of work and didn’t get a letter, it’s still a good time for a compliance check-up,” said Lesley Fair, Senior Attorney at the FTC. “One place to start: the FTC’s credit reporting page.” The warning letters are part of an ongoing international effort spearheaded by GPEN. These warning letters are similar to those recently sent by the FTC to six websites that share information about consumers’ rental histories. Though the FTC enforces several laws and rules imposing data security, it has limited power to regulate data brokers. Following failed industry efforts to self-regulate, the FTC has increased its enforcement efforts concerning consumer privacy through the FCRA.

Feds Propose Stronger Child Care Standards

A proposed rule from the Department of Health and Human Services would strengthen standards for the 1.6 million children who are served by providers that get money from the Child Care and Development Fund, a federal program to aid low-income children under the age of 13. The administration claims that current regulations resemble a patchwork of regulations for childcare centers, with state laws varying on whether providers need background checks or first aid and CPR training. One in 10 children who are served by the program are cared for in totally unregulated facilities, the department asserts in the proposal, which “can leave children in unsafe conditions, even as their care is being funded with public dollars.” The department’s proposal would require that providers receive background checks, are monitored on-site and complete health and safety training. It also mandates that states set up websites to tell parents about different child care providers, their licenses and possible past violations, which would cost state agencies about $2 million.

Retailers Use Employee-theft Databases to Combat Shrink

To counteract big losses from employee theft, some loss prevention experts in the retail industry are turning to mammoth databases to track employees accused of stealing retail merchandise. While information and background check companies are the custodians of the information, it is retailers themselves who amass the data and submit it to such companies when an employee or consumer commits retail theft. In 2011, employee theft drained an estimated $15 billion from the retail sector and comprised about 45% of total retail “shrink,” according to Rich Mellor, vice president of loss prevention at the National Retail Federation. These figures have compelled some retailers to use the databases to weed out potentially problematic employees from the industry. Currently, an estimated 10,000 retailers (only 20-30% of all retailers) use employee-theft databases to verify if a prospective employee has been terminated or prosecuted for a previous instance of retail theft. While governed by the rules and regulations of the FCRA, the databases, despite having compliance guidelines, have not been immune to criticism, or in some cases, legal action. For retailers, legal risk is non-existent as long as they comply with these guidelines.

Office of Inspector General (OIG) Issues Special Advisory Bulletin Regarding Exclusions and Sanctions on Individuals and Entities

The US Department of Health and Human Services (DHHS), Office of Inspector General (OIG) released a

“Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs”

on May 8, 2013-the first in over ten years. The OIG originally published a Special Advisory Bulletin in September 1999. The updated 2013 bulletin expands the OIG’s exclusion authority.

Key Considerations from the 2013 OIG Exclusion Screening Advisory Bulletin

Providers should check the OIG List of Excluded Individuals and Entities (LEIE) upon hire and periodically for employees and contractors. It also notes that the OIG updates the LEIE exclusion list monthly.
The prohibition for payment applies to administrators such as executives, human resources, information technology, accounting, general counsel and office managers who are on the OIG exclusion list.
A hospital contracting with a staffing agency is required to ensure that the staffing agency has conducted OIG LEIE exclusion list searches on such staff.

73% of Employers Check Job Applicants’ Social Media Profiles Before Offering Roles, Why Didn’t Kent Police & Crime Commissioner?

Online recruitment agency, RecruitmentRevolution.com, has commented on the resignation and current police investigation of Paris Brown, the seventeen-year-old Kent Police Youth Crime Commissioner who resigned after media reports that she had made “racist and homophobic” comments on her personal Twitter account. Kent Police & Crime Commissioner, Ann Barnes, had a duty of care to investigate the social media profile of Brown prior to offering her the role of Youth Police Crime Commissioner,” said Anna Taylor, Co-founder and director or RecruitmentRevolution.com. “Had Barnes checked the social media profiles of the candidates, it is unlikely that Brown would have been placed in this position,” said Taylor. A survey of 1,700 UK employers, undertaken by RecruitmentRevolution.com, found that almost three quarters of employers regularly check the social media pages and profiles of potential employees before offering them roles. Only 27% of employers surveyed do not check Twitter, Facebook, LinkedIn and other social media sites for information on job candidates. “We need to educate our young people that whatever they post on social media is on public record, can be easily discovered online and can come back to haunt them,” concluded Taylor.

Survey Reveals Criminal Records Aren’t Deal-Breakers

A majority of HR professionals who responded to a recently released survey are screening candidates in a conscientious manner, auditing providers and educating themselves on legal-compliance issues. The survey report was conducted by EmployeeScreenIQ, a provider of background-screening services that is accredited by the National Association of Professional Background Screeners. The report tracks employers’ attitudes and actions regarding the impact of criminal records on hiring, the use of social networking in the screening process, the implications of new EEOC guidance and the practice of asking candidates to disclose criminal records. An interesting finding was that criminal records aren’t deal-breakers. In fact, 71% of respondents said that in a mere 5% or less of cases, candidates with criminal records are not hired for this reason. “The overarching takeaway from this survey is that employers seem to be screening and hiring candidates in a responsible, acceptable and legally compliant fashion,” said Nick Fishman, chief marketing officer at EmployeeScreenIQ.

EEOC Guidance Complicates Background Check Process

Some staffing buyers demand criminal background checks for contingent workers. On the other hand, the EEOC is seeking to protect worker rights and ensure that those in protected groups more prone to incarceration aren’t unfairly treated by such checks. The EEOC once had guidelines that were fairly concise. But in April 2012, it made a decision to replace concise and workable guidelines with a 52-page long, somewhat confusing document that leaves a lot of guessing room for employers. Angela Preston, a board member for the NAPBS and general counsel and vice president of compliance for EmployeeScreenIQ, comments that the new guidance says if you want to avoid being investigated you should conduct an individualized assessment, however; there is no meaningful instruction in the guidance on how to take that step. A recommended practice with the new guidance is to not conduct a background check until there’s a conditional job offer. However, that adds time when a check ultimately turns up information that disqualifies a potential candidate. Because the EEOC’s guidance is just guidance and doesn’t have the force of law, it remains to be seen what deference courts will give it as they are not bound by the guidance.

Retailers Track Employee Thefts in Vast Databases

Facing a wave of employee theft, retailers have amassed vast databases of workers accused of stealing and they use the information to keep employees from working again in the industry. The repositories of information often contain scant details about suspected thefts and routinely do not involve criminal charges, but the information can be enough to ruin a job candidate’s chances. Some employees who submit written statements after being questioned by store security officers have no idea they admitted committing a theft or that the information will remain in databases. The databases, which have tens of thousands of subscribers and are used by major retailers like Target, CVS, and Family Dollar, are aimed at combating employee theft. While the databases are legal, they face scrutiny from labor lawyers and federal regulators, who worry they are so sweeping, that innocent employees can be harmed. The lawyers say workers are often coerced into confessing, sometimes when they have done nothing wrong, without understanding that they will be branded as thieves. The
FTC has fielded complaints about the databases and is examining whether they comply with the FCRA, a federal law aimed at curbing inaccurate consumer information and giving consumers more control.

Know Your Enemy? Cut The People Risk

Human risk specialist, Jenny Reid, says hiring decisions can be made safer by looking behind the job applicants’ mask and knowing your enemy. These days, companies can call on screening companies with the required skills, contacts and equipment to look behind the mask. Specifically trained and technologically enabled researchers will get that job done thoroughly and quickly saving companies from making personnel selection mistakes, and saving them time and money. Reid pointed out that human nature has changed very little in the last 15 centuries; mostly it is good and conforms to decency, fairness and lawfulness. But, she warned, dishonesty persists in society. In the corporate arena, companies must be scrupulously and constantly on their guard if they are to identify today’s workplace enemies. Crime in the corporate environment has its own ‘state of the art’ driven by technology just like everything else. New electronics, software and cyber and digital engineering helps the criminal as much as it does the straight and narrow of us. She warned that reaction often means too late, while pro-action provides a fighting chance to thwart attacks on companies, or could dissuade would-be criminal acts because the perpetrator regards installed safeguards effective enough to send lawbreakers looking for easier prey.

New Workforce, New Tools

Background screening is a critical component of any talent acquisition strategy. Without a standard and efficient approach to compiling and authenticating candidate information, organizations will lose their best talent and become vulnerable to risk and compliance issues. Yet, according to Aberdeen’s talent acquisition research, only 4% of organizations cited background screening as the top talent acquisition priority in 2012. In today’s highly competitive market, HR leaders need to think more strategically about background screening-particularly around their technology investments. Many organizations are only investing in screening at specific job levels, while others fail to invest in credible providers that provide accurate information on candidates. With a new set of regulations and an increasing number of dubious providers offering inaccurate information on potential candidates, organizations can no longer afford a haphazard approach to screening. The top criteria used to select a provider include accuracy, turn-around time, compliance and customer service. Additional criteria that organizations should consider include globalization, social media, a positive candidate experience, and total talent acquisition.

To Screen or Not to Screen?

According to HireRight’s 2012 Employment Screening Benchmarking Report, 34% of respondents perform background checks on current employees, and experts in the field believe the trend is growing. It’s a step toward furthering risk management and maintaining a safe working environment for employees and clients. “Since a background check is a snapshot in time, employers should be interested in ongoing screening to help identify employees who may commit crimes that would have precluded their initial hire,” notes Steven James, founder and chief operating officer of Background Profiles. Certain industries are more prone to receive the value of investing in annual background screens such as in the health care, transportation, and financial services industries. Various factors should be taken into consideration if your organization moves forward with annual background screening: Consent is key; Keep cost and relevancy in mind; Think about compliance; Communicate and be consistent; Contractors count too. And if every year isn’t in your budget, think about spacing apart total
workforce screens every two years.

These 5 Trends Are Shaping the Future of Pre-hire Assessments

2013 is going to present the start of a major tipping point in the way people find jobs and are evaluated for jobs, and a blend of technology and assessment content will play a big role in these ongoing changes. This opinion is not founded on trends within the pre-hire assessment industry, but rather on the bigger picture of emerging trends in Internet technology: Social Connectivity; Collective Intelligence; Gamification; Credentialing; and
Entrepreneurial Culture. The ability of data to drive useful connections with others who share the same interests and the ability to share information across relationships is rapidly gaining teeth. It is now possible to use personal preferences, connections, and interests to provide meaningful insights into almost everything. In terms of hiring, connectivity continues to make sourcing (and job searching) easier. The emerging Internet has introduced many sites and businesses who offer the ability to collect input from multiple persons, aggregate the data, and report on it such that one overall opinion creates an accurate representation of the views of many. When combined with increases in connectivity, we gain the ability to collect insight about a person, product, or service that may not be exactly in line with what is outwardly represented.

State Pushing for Federal Background Checks at Daycares

A CBS Atlanta News investigation revealed that 24,000 daycare workers in Georgia are on the job without having undergone a federal background check. A local background check is currently all that is required by the state. Kellen Stennett, owner of The Goddard School in Buckhead, said that he believes the state should require more thorough background checks on daycare workers. In response, the Georgia Department of Early Care and Learning is pushing new legislation to require a federal fingerprinting background check. They receive more than 100 complaints a month related to possible inappropriate activity at daycare centers. “The federal background checks are a little bit more complicated,” said Stennett. “They cost a lot more money, they take a lot longer to get the results back so particularly if you’re looking to make a quick hire or something like that it can be restricting.” Georgia is expecting lawmakers to pass legislation this session to strengthen background checks.

Criminal Background Checks: Good in Theory, Problems in Practice

One of the longest held axioms in social science is, “The best predictor of future behavior is past behavior.” Over the years many employers have increasingly relied upon criminal background checks as the principle strategy used to screen out potentially risky hires from the workforce. The problem is, as expressed by another axiom of behavioral science, namely, “People often make bad decisions early in life.” These bad decisions, which they later
regret, usually are not permanent. People can recover, rehabilitate themselves, and turn their lives around.

In making hiring decisions, Richard C Hollinger, Ph.D. states that “find ourselves at the horns of a dilemma. Most people who are convicted of a crime, especially property offenses, will never offend again and not become a threat to society. The problem is that we do not have very good tools to predict who will be successfully rehabilitated and who will offend again. As such, most employers, on the advice of legal counsel and risk management, choose to err on the conservative side of this question. This means, if a person has been convicted in their past, we generally exclude these individuals as candidates for employment forever. The net effect of this policy is gross discrimination. This is especially true for those who have used drugs, stolen anything, and who are male minorities, particularly true for African American males.”

Dr. Hollinger hopes that the retail industry will embrace and implement the new EEOC guidelines to change their present hiring policies. He also asserts that social science research literature supports the new EEOC hiring guidelines. Moreover, he states that one could argue that the industry that hires the largest number of employees in our country should be the one to lead the rest of the nation in reducing the level of racial, ethnic, gender, sexual orientation, and other forms of unwarranted discrimination.

LexisNexis Screening Solutions Portfolio to Symphony Technology Group

LexisNexis® Risk Solutions today announced it has entered into a definitive agreement to sell its LexisNexis screening business to the Palo Alto-based private equity firm Symphony Technology Group (STG). STG plans to combine LexisNexis screening with its portfolio company, First Advantage, to create a global leader in talent acquisition solutions.

“The decision to sell the screening business came after a careful review of the needs of the business and the strategic goals we have in place,” said Mark Kelsey, CEO, LexisNexis Risk Solutions. “While the screening business has been a significant offering within the LexisNexis portfolio, there is greater long-term opportunity for the business with an organization like First Advantage, which is focused on bringing background screening solutions to the
marketplace.”

To read more visit: www.symphonytg.com.

NAPBS’ First Executive Director, Tracy Seabrook (Kimbro) Killed in Motorcycle Accident

I am saddened to report that Tracy Seabrook (Kimbro), the first NAPBS Executive Director perished in a motorcycle accident on January 6^thalong with her husband, in Southern Florida. She was a true contributor to the success and growth of NAPBS as well as friend to many in the industry. Our deepest sympathy and prayers go out to her family, friends and colleagues.

What Bad Hires Really Cost Companies

According to a new CareerBuilder study, 69 percent of employers report that their companies have been adversely affected by a bad hire this year, with 41 percent of those businesses estimating the cost to be more than $25,000, and 24 percent saying a bad hire cost them more than $50,000. “Whether it’s a negative attitude, lack of follow through or other concern, the impact of a bad hire is significant,” says Rosemary Haefner, vice president of human resources at CareerBuilder. “Not only can it create productivity and morale issues, it can also affect the bottom line.”

Why do bad hires happen to good people?

When asked what accounted for the bad hire, survey participants report the following reasons that led to their hiring mistakes:

Needed to fill the job quickly (43 percent)
Insufficient talent intelligence (22 percent)
Sourcing techniques need to be adjusted per open position (13 percent)
Fewer recruiters to help review applications (10 percent)
Failure to check references (9 percent)
Lack of strong employment brand (8 percent)

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