Michael Pires asked:


Small business owners know the value of a good employee, but unlike their large company counterparts, don’t realize the impact of a bad hire. They are often unable to afford the risks and liability that come from such missteps.

Did you know?

· The Society of Human Resource Managers identifies that as many as 53% of all job applicants lie to some extent on their resumes.

· According to the U.S. Justice Department, employee theft costs American businesses more then $60 billion annually.

· The U.S. Chamber of Commerce contends that 33% of all business failures can be attributed to employee theft.

Why chance it?

Hiring someone with a criminal history or who’s falsified their credentials can be a nightmare. Industry statistics suggest that the cost of a bad hiring decision averages between 4 and 8 times the employee’s annual salary. For a hard-working small business, a bad hire can be very significant and can even lead to the downfall of the business.

It’s no surprise that employers of all sizes are turning to pre-employment background investigations and screening as a way of minimizing their risks. This can benefit your business in several ways:

· In most cases, a screening program will help discourage applicants with something to hide from applying in the first place. Anyone with a criminal record or falsified credentials on their resume is more likely to apply to a company that does not conduct such investigations.

· A screening program demonstrates the employer’s concern for the business and its employees. Good employees appreciate the due diligence and prefer to work for organizations which take these basic precautions.

· It reduces possible errors and uncertainty from the hiring process. While your “gut” might tell you it’s a good hire, basing your decision on facts will go much farther in protecting the business in the long run.

Don’t go overboard

While you have the right to pre-screen an applicant for a job, you do not have an open license or right to dig into applicants’ personal affairs. Employees and applicants have an inherent right to their privacy in certain personal matters, a right they can easily enforce by slapping a lawsuit on you and your company if you decide to dig too deep. Here are a few tips to keep in mind to help prevent this from happening:



Make sure your inquiries are job related. If you decide to do a background check, be certain you only investigate information that is relevant to the job for which you are considering the applicant.

Get consent. Require all applicants to fill out a formal application and release form authorizing you to check the background and references of the applicant. Clearly identify your intentions to conduct a background check and how you will gather this information. Doing this will prevent applicants from later claiming that you unfairly invaded their privacy. If an applicant does not consent to a reasonable request for information, you are legally entitled to decide not to hire them on that basis alone.

Be reasonable. If you find yourself ordering credit checks, and undergoing exhaustive investigations into an applicant’s history and public records every time you hire a cashier or stock person, you could be doing more harm then good and need to take it back a notch.



What you should look at



A basic background check should cost roughly $20 – $30 per hire. At a minimum, you should be verifying social security numbers (which can be done for free) but background checks can cover almost anything about the applicant, provided you follow the guidelines above. Searches may include:



Court and criminal records

Motor vehicle records and registrations

Military service records

Education records

Credit reports or bankruptcy filings

Employment verification

Medical and workers’ compensation records

State licensing records

Character references or interviews with neighbors



One thing is for certain: your business is too important not to be following these basic guidelines. If you don’t already have a screening program in place, start one. You’ll be glad you did.

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