Nearly half of the people who submit resumes have made factual errors on items such as dates of employment, educational and professional credentials, and job titles¹. Three-quarters of all employees in the banking industry have stolen from their employers at least once². Employee theft and fraud cost U.S. retail businesses over $50 billion each year. In addition, the average value of merchandise recovered from employee theft is $1,525—nearly seven times that of the average shoplifter³. Perhaps even more alarming, the Bureau of Labor Statistics estimates that between 1.2 and 2 million workplace violence incidents occur each year⁴.

Our post-9/11 world has increased our focus on identifying terrorists and ensuring our security on a global level. Security concerns also extend very specifically to our workplace and potential employees. Changes in today’s business, social, and political climates are creating a greater emphasis on the need for effective background checks of job candidates and current employees. A combination of dynamic working environments, a regulatory and litigious atmosphere, and the greater global concern about security all play a significant role.

Background Screening

Pre-employment background screening is a key way for employers to meet due diligence requirements to hire safe, qualified employees and to reduce negligent hiring exposure and workplace violence. Post-employment background checking, or rechecking, has emerged as an equally critical practice to monitor safe and legal activities and mitigate ongoing risk.

Compliance issues, fraud, workplace violence, and negligent hiring liability—and the risk of personal liability—are all significant drivers for increasing corporate concern about the most effective and efficient background checking methods.

Background checking companies estimate between 7 and 12 percent of applicants are turned away because of background issues: about 5 to 6 percent are due to criminal issues, 2 to 4 percent due to false employment or education, and about 1 to 4 percent based on motor vehicle record or credit problems.

Survey Says

A Taleo Research survey of large companies found:

• Fifty-seven percent of survey respondents believe that their organization should be doing a better job of screening employees before hiring them.



• Only 19 percent consider their current background check process very effective at weeding out candidates that do not meet the criteria for employment at their company.



• Twenty-seven percent of organizations experienced a major problem—workplace fraud (10 percent), employee theft (10 percent), or workplace violence (7 percent)—with an employee who was screened in, but ended up having a criminal record that was not found. The resulting impact to the company was considerable:
• Employee termination or turnover (58 percent).
• Negative media exposure (5 percent).
• Lawsuits, union conflicts, or other impact (26 percent).



• Two-thirds of organizations do not conduct ongoing background checks on employees. Only 29 percent have ever run an audit of their current screening provider to determine the quality of their screenings⁵.

Accuracy is Essential, Yet Elusive

Despite best efforts, screenings are often inaccurate. Sometimes the errors arise from simple mistakes in re-keying of information across job applications and other documentation. Data re-entry due to separate processes for background checking, hiring, and maintaining employee information can certainly be alleviated through integrated systems. Today's technology platforms can not only address these errors, but can also hasten background checking cycle time. Faster hiring cycle times provide a clear advantage when interacting with top candidates.

A greater issue than flawed data entry is the lack of accuracy and depth of the delivered background checking information. There are few, if any, comprehensive national sources of information. National criminal repositories rely on unpredictable data from local counties scattered across the United States. Manual court runner searches miss records because they are limited to a few counties of residence. There is no national sex offender registry and state registries have lost track of up to 40 percent of the offenders. Even the FBI's National Crime Information Center (NCIC) is missing information; in fact, the Justice Department relieved the FBI of its responsibility to ensure the accuracy of data in 2003.

To test the adequacy of a multi-billion dollar hospital organization's current screening program (which consisted of a seven-year pre-hire background check), 12,000 current employees were re-screened with these results:

• 198 unknown pre-employment felonies and major misdemeanors including murder, aggravated assault/battery, rape, drug manufacturing and distribution, forgery, fraud, and grand theft.



• 74 post-employment felonies and major misdemeanors, including aggravated assault/battery, rape, grand theft, forgery, drug distribution, DUIs, prostitution, and fraud.



• Average of 14 new events per year.

Similarly 8,700 current employees of a multi-billion dollar financial brokerage organization were re-screened using FBI/NCIC screening, with these results:

• 87 unknown pre-employment felonies and major misdemeanors.
• 13 post-employment felonies and major misdemeanors⁶.

Because of these information gaps, companies are being exposed to lawsuits, fines, and brand damage—despite having screening programs in place. For example, FedEx Corporation was sued for negligence after a former employee with a history of child sexual abuse was charged with sexually assaulting a customer's son. Yet the company claims that the background check on the employee came back clear. How is this possible? Background check companies are partially to blame for misleading companies into thinking their databases are national, when they are not.

Increasingly, companies have workers in different locations, many working virtually. To be accurate, record searches must cover all locations and even identities—such as name changes due to marriage or divorce—of an individual. Re-checking is also essential. An employee who passed a thorough background check pre-hire may no longer be meeting the obligations and policies of employment.

Advances in Technology

A poor use of electronic data and manual steps for ordering background checks, synthesizing the information, and reporting on it can result in high costs and long turnaround times. High false positives and missed records due to insufficient databases, a lack of standardization, and ineffective use of unique identifiers and data attributes—such as social security number, address history, and aliases—produce inaccurate and incomplete screens.

However, new methodologies and an integrated technology platform can provide significant improvements to the process of background checking. New algorithms make use of the largest online criminal repository available can provide improved quality and efficiency to support both standard pre-hire checking and strong post-hire policies. Optimizing the background checking process through the application of new technologies can:

• Improve accuracy.
• Shorten turnaround time.
• Lower costs.

Today the goal can be reached. Better quality screening results can safeguard both employees and employers.

1. ResumeDoctor.com, South Burlington, Vermont
2. K. Krebsbach, "Security: The Inside Job,: U S Banker (September 2004)
3. Ernst & Young, Study of Retail Loss Prevention
4. The Financial Impact of Workplace Violence (The National Institute for the Prevention of Workplace Violence)
5. Background Checking: Uncovering the Facts. Taleo Research, 2006
6. Source: Verified Person