Job seekers are becoming increasingly desperate for employment in today’s teetering economy. Unfortunately, that means they’re more likely than ever to skew the truth on their resumes, applications, and cover letters. Thus, background checks are a crucial part of the verification process and should include a thorough investigation of all of a candidate’s claims. The screening process can reveal important issues such as instances of:
- Workplace violence
- Identity theft
- Fraud and misrepresentation
- Breaches of confidentiality agreements
- Criminal offenses
- Sexual misconduct/sex offender registration status
- Poor credit history
Reducing liability for your organization is not the only reason to invest in employee screening and background checks, though; careful candidate screenings can also shrink costly and inefficient turnover rates.
The Cost of High Turnover Rates
Statistics show that when it is necessary to replace an entry-level employee, you’ll spend up to 50% of that employee’s yearly pay to do so. For a mid- to professional-level employee, it could cost you anywhere from 150% to 400% of their annual salary to replace them. Retraining new employees repeatedly is not only a strain on company resources, but it also hinders operations in the meantime.
In industries with high turnover rates, such as retail, software, IT, media, professional services, government, education, and nonprofit services, more than 11% of employees will leave their employment in an average year. Pre-employment screenings are critical in high-turnover industries such as these. Based on the above figures, a company within an industry that loses between 10% and 15% of its employees annually in a 10-person operation, for example, is essentially paying for up to 12 employees while getting less than 10 peoples’ worth of work.
If you’re wondering where turnaround expenses are coming from, here’s a breakdown of turnover-associated costs from the founder of Bersin by Deloitte, as explained on LinkedIn:
- The costs of advertising, interviewing, screening, and hiring the individual
- The costs of onboarding in management and training hours
- The productive time it costs to get a new hire to the same productivity level of an established employee
- The cost of errors made while still in training
- The loss of good employees as a result of a bad hir
Solid retention rates represent a wealth of savings that are estimated to be more than double the salary for the position in question, which is what you’ll pay to scout, vet, and secure a new hire for the vacated position. Higher workplace retention reduces time waste and promotes a healthy and motivated team that will grow and work hard in the long term. Clearly, a good hire is a win for your company’s overall infrastructural, economical, and procedural efficiency.
Types of Background Checks to Conduct in the Hiring Process
Typical background checks you should run on entry-level employees include:
- Verification of employee identity
- A local, state, federal criminal background check
- A motor vehicle record check
- A credit check
For higher-level employees, your background check should also include any of the relevant options below:
- Employee education check
- Past employment check
- Professional references
- Relevant licenses
- Professional certification
Why Conduct Background Checks Before Hiring?
Good Background Checks Help With Employee Retention
Protect Office Morale and Camaraderie
Did you know that many employees stay at a job long-term because of the friendships they have established with fellow coworkers rather than the company’s benefits or pay rates? Employees of today value relationships with their coworkers, and hiring the wrong person could disrupt this camaraderie and positive morale — especially if the new hire begins to slack off and create more work for others or causes coworkers to fear for their safety.
Such situations can cause good employees to leave the company, and in turn, increase turnover rates. If your company is exploring how to retain employees, background checks are the ideal place to start. Background checks provide peace of mind, by helping HR and management avoid hiring dangerous felons or those who have demonstrated performance issues in past positions.
Reduce Risk of Damage, Harm, and Fines
A background check can alert you to an individual’s criminal offenses that could happen again on your premises and threaten the reputation of your company or the safety of your staff members. You could also incur fines or legal liabilities if you inadvertently hire someone whose bad credit poses a financial risk to the company or who lacks the proper documentation to work in the United States. Mitigate your financial risk and hire someone who can be trusted to work for the long haul by conducting a thorough employee screening before hiring.
Increase Quality of Hires
If you make it known that all candidates will be screened during the application process, you will weed out many of the less-favorable candidates who won’t apply if they know they will be exposed for providing false information. This leaves you with a smaller and more qualified applicant pool.
From there, you can look at a candidate’s education and experience in their background check to identify which people’s qualifications are the best fit for the position in question. When you know a candidate’s full background, you’ll have a good idea of how they are going to perform at work. With this information, you can proceed to make more informed hiring decisions and onboard higher-quality candidates who will stick around longer and help your business succeed.
Good background checks allow you to:
- Become aware of a candidate’s lack of qualifications, education, or training before a hiring decision is made
- Learn about the candidate’s past history with employers, including their termination history
- Learn positive things about the candidate that will increase the chances of retention
- Circumvent instances of workplace fraud, theft, and violenc
All good employers know that if they can find and keep the right person for a position on the first attempt, the expense of onboarding that individual was money well spent.
Good Background Checks Help Companies Perform Better
Background checks are now common practice — more than just another check mark on the hiring to-do list. According to a 2016 study by Aptitude Research Partners, companies are using background checks to increase the quality of their hires and their candidate experience. They reported that the background checks helped them pinpoint the people who would help the company perform and grow. Checks also contributed to a more consistent and enjoyable application process that helps them attract and retain top talent. The study provided a finding that says companies who track the candidate experience and quality of their hires are 26% more likely to have a background screening program and are likely to experience benefits like better hiring compliance, risk mitigation, and improved workplace safety.
Studies show that companies utilizing good background checks are among the 93% of top-performing companies due to higher employee engagement; they’re twice as likely to make efforts to achieve diversity and three times less likely to lose employees to other companies offering equal pay. Also, 78% of the companies using candidate screening have better communication skills on their hiring teams than the 22% that don’t screen candidates. Organizations that follow suit and invest in candidate screening may see similar results.
Invest in Reliable Employee Screening Today
Background checks will reduce your overhead, promote overall workplace security, and incentivize the productivity of your workers. Start making smart hiring choices today by investing in solid employee screening practices. VICTIG is the place to start. We’re not just any background-checking company; we have a strong history of creating progressive screening solutions that solve problems, reduce turnaround times, and save you money.
Stop paying too much and waiting too long for background screening — request a free account and find out if VICTIG works for you today. You will see drastically reduced turnover while retaining the best of your organization.