Five Good Reasons Why Background Screening Now Reduces Costs & Risks Later

Most Human Resources (HR) professionals have long realized how important background screening applicants is to any company’s success. For those in the HR profession who are still sitting firmly on the fence, a quick look at the increased costs and risks of forgoing a pre-employment screening program is in order. Here are five good reasons for performing background screening.

Good Reason #1: High Turnover

Simply put, good background screening finds good employees, thus lowering one of the most significant costs businesses face, that of replacing workers because of high turnover rates. Background screening industry research shows the cost of a “bad hire” usually ranges from one to five times the applicant's annual salary, including recruitment, training, severance costs, and lost productivity. Background screening usually costs a fraction of replacing the lowest salaried employee, which is important to remember when, on average, at least half of all new hires by U.S. businesses simply “don't work out.”

Good Reason #2: Employee Theft

Avoiding employee theft is important in any economy, but particularly relevant in the current economic downturn, when every dollar counts. One employee – and one missed background screening process – can ruin a company. Research shows that 30 percent of all business failures are caused by employee theft, and nearly 15 percent of all applicants admit to theft of merchandise from an employer. Reducing the risk of employee theft with effective background screening – which can uncover a criminal past or drug problem (drugs being a main reason for stealing at work) – is another important cost to consider.

Good Reason #3: Lowered Morale & Productivity

Without good background screening, a single bad worker can create bad co-workers which can result in a bad company – which can then lose good customers. Think it can’t happen? A recent management survey revealed that there are significant consequences to a bad hire, including lowering employee morale by an astonishing 68 percent and decreasing employee productivity by an equally troubling 66 percent. So unless employers like losing two-thirds of morale and productivity, they should use a background screening program to help them decrease their risk for lost customers and reputation.

Good Reason #4: Unqualified Workers

The days of gaining employment with a firm handshake or a flashy smile are long gone – or at least should be. Despite many well-publicized revelations of executives who lied on resumes and damaged their organizations as a result, many companies still mistakenly believe that they can make fully-informed hiring decisions without conducting comprehensive background screening on each candidate. Research based on background screening in 2008 showed that seven percent of applicants had a criminal history, while 32% of employment and 39% of education verifications revealed discrepancies in resume information.

Good Reason #5: Workplace Safety & Security

Lastly, and in many ways most importantly, background screening can help nullify the sometimes deadly issue of workplace violence. In addition to helping to ensure a well qualified and honest hire, background screening is a critical step to maintaining workplace safety and security by avoiding candidates with violent pasts. The cost of a safety incident can be immeasurable and can leave employers open to liabilities for negligent hiring and retention. Employers have lost more than 79 percent of the negligent hiring cases with an average settlement reaching more than $1.6 million.

Pre-Employ.com – a leading provider of background screening and other employer services – believes that when evaluating the current costs of a background screening program, HR leaders should consider the substantial savings pre-employment screening provides by significantly reducing future risks and costs. For more information about Pre-Employ's suite of background screening services, please visit www.pre-employ.com, email info@pre-employ.com, or call 1-800-300-1821.

Contact Us @ Pre-Employ.com

tahearn@pre-employ.com

*We welcome relevant comments and questions from consumers, experts, and human resources professionals. Please do not submit comments with advertisements as they will not be posted publicly. Thanks for visiting our blog!