Your search for a new employee has been progressing smoothly.
You engaged a recruiter to help you sharpen up job specifications and to identify and screen potential candidates.
The recruiter has come back with a short list of 5 candidates for you to interview.
Your hiring team has interviewed all five candidates and narrowed it down to two finalists.
Now your team is having trouble deciding between the two finalists. Both are capable of doing the job and their past experience has demonstrated that. Both have their strengths as well as weaknesses. For example, Heather is more introverted than Tom but has asked some very thought-provoking questions. Tom, being more outgoing, was able to build rapport with the hiring team, but didn’t seem to have analytic skills as strong as Heather’s.
Often, this is the time to use assessment tools to obtain an objective measurement of a candidate’s abilities or talents. We’re going to use assessment tools in a broad context for purposes of this post.
There are three goals of doing assessments:
- to help ensure you’re hiring the best person for the job role in terms of fit, skills and experience
- to help ensure the person you’ve interviewed is the person they really are, and thus…
- to avoid making a poor hiring decision that proves to be costly.
One way a poor hiring decision can become costly is to hire an employee who commits fraud or theft. In this post, we’ll introduce you to some of the types of assessment you should be considering as part of your hiring process.
A 2011 study of what is termed occupational fraud (aka white collar crime) by the Certified General Accountants Association of Canada revealed that 76% of large businesses in Canada used pre-employment screening as an anti-fraud measure. However, less than half – 45% – of small-to-medium sized businesses (SMEs) did any kind of pre-employment screening. This difference in use of screening is reflected in the incidence of occupational fraud: about one-quarter of SMEs experienced occupational fraud in the previous year compared to 3 to 5% of large businesses such as banks and insurance companies.
It’s sad to see smaller businesses impacted in this way, because the cost of doing background checks can be less than $100. The cost of a bad hire is estimated to be, on average, about $25,000.
Credit checks are also used when the role involves fiduciary responsibilities to ensure the employee does not have debts that could prompt him or her to embezzle or misappropriate funds. They can also flag irresponsible behaviour.
An international survey by the Society for Human Resource Management in 2009 found 47% of companies ran credit checks for certain positions while 13% did this type of screening for all jobs.
Occupational fraud is prevalent at ALL levels of the organization chart. Occupational frauds are committed by all levels of line employees in an organization. 42% were committed by employees, 38.6% by managers, and 19.3% for owners/executives.
Theft and fraud prevention was cited by 54% as the main reason for checking job applicants’ credit history. The second most common reason was to reduce the company’s legal liability for negligent hiring, while the third reason, cited by 12% of respondents, was to assess a job candidate’s trustworthiness.
Criminal Background Checks
Criminal background checks are used when the role involves some form of fiduciary responsibility to ensure there has been no history of fraudulent behaviour. They also are used when a role requires interaction with vulnerable people such as children, the elderly or the disabled to ensure there is no history of abusive behaviour.
To avoid the possibility of claims of discrimination, the position must have the requirement of passing a criminal background check written into the job description to verify there is a Bona Fide Occupational Requirement (BFOR).
Before doing a criminal background check, you must have written authorization from the candidate to do so.
Through their resumes and the interviewing process, candidates disclose information about their skills and achievements. To some extent, hiring managers have to accept what the candidates have told them in making their decisions about which person to hire. But how do you know they haven’t misrepresented themselves?
An initial step should be to verify the credentials the candidate claims to have: university or college degrees, professional certifications etc. This can be accomplished by contacting the educational institution or professional association. In the case of professional accreditations, the check should be to ensure the candidate is a member in good standing of the professional association, dues are up-to-date and that there have been no disciplinary issues within the profession.
Driving Record Abstracts
If the job role involves driving a company vehicle (such as a sales representative), you should procure an abstract of the candidate’s driving record. This will reveal more than just speeding tickets, but also DUI’s and leaving accident scenes, which could indicate behavioural issues.
There are companies such as BackCheck and Hire Performance that provide background checking services. At HIRE GRAY MATTER, we use agencies like these because they have sound processes, reasonable fees and fast response.
The most common form of background check is to ask the candidate for specific individuals who can vouch for their performance and achievements and then contact these individuals.
In our next post, we’ll explain how we approach doing reference checks. There’s more to doing reference checks than confirming dates of employment and obtaining a sense of the candidate’s character.