Retail Theft Study on Employment Screening

This is about a month old now, but an old friend from SHRM passed this study on Employment Screening in the retail sector which was published in Loss Preventation Magazine. See some key findings below:

The purpose of the survey was to benchmark large retailers’ current pre-employment screening programs. The survey was sent to the most senior-level loss prevention executive in ten leading U.S. retailers. The surveyed retailers ranged in store count from 250 to over 3,000 locations and included both hardline and softline retailers. The survey focused on five types of screening processes—drug testing, assessments, credit checks, criminal history, and motor vehicle checks. The scope of the survey included store, distribution centers, and corporate levels at each retail company. The survey was conducted in March, 2007.
The survey did not attempt to evaluate the ROI from a pre-employment background screening program. While this is outside the scope of this survey, many retail companies have an internal ROI process measuring programs such a pre-employment screening.
The chart below is a summary of the responses to the five primary questions. Conducting an assessment is clearly the most common pre-employment screening method employed, followed by conducting a criminal background check.

Screening Type: Store Distribution Center Corporate
Drug Screen 50% 60% 40%
Assessment 90% 40% 40%
Credit Check 0% 0% 33%
Criminal Background Check 70% 80% 70%
Motor Vehicle Record Check 0% 60% 40%

I am a little surprised that assessments beat out criminal background checks at the store level, but given the cost structure of screening tactics perhaps it makes sense. Also, I'm surprised that the Substance Abuse Screening levels and use of Criminal Background Checks vary from Store, to Distribution Center, to Corporate. I would think that if these things were important at one level, they would be important at all.

employeescreenIQ Releases Latest Newsletter

We've just released the latest edition of our Quarterly Newsletter, The Verifier. Please feel free to check it out.

http://theverifier.net/index.php

Curiosity Doesn't Always Kill The Cat

A few weeks ago, I wrote about applicants who claim to have degrees or diplomas but really don’t. We check, report back to our clients. They make a decision. However, not all cases are that clear cut.

Recently, a candidate said he had a degree, but the school couldn’t verify until they spoke to the applicant directly. Unusual, but not unheard of. Less than 48 hours later, we received a call from someone who said he was a school employee. This person verified the candidate’s degree. Sounds simple enough. Wrap it up and send it back to our client, right?

However, the area code on this phone call was different than the area code of the school. Our researcher’s curiosity was peaked at this point, and called back the school. They stated they still cannot release information, nor had they heard from the applicant!

Our work wasn't done though. The department the person who called us confirming the applicant’s degree. He didn’t work there. The Registrar’s Office? Not there either. At this point, we shared our findings with our client.

While this verification made for a pleasant blog piece, we’re happier about the performance of our researcher. She noticed something looked out of place and acted on her instincts. She made more than a few follow up attempts to obtain information, clarify what she was told, and ascertain the quality of the information she was given.

Our client was more than pleased. Could another company have done the same thing we did? Perhaps. But processes and best practices are very, very important to us. All of our verifications are done within 75 feet of my desk. We do this work in-house and train our own staff, so we can assure our clients they’re receiving a high quality report. We’re proud of our work and like to think our efforts pay off on searches like these.

Take a Look Around Your Workplace

Over the years, we have done enough employment and education verifications that few things surprise us. We have seen some interesting trends develop over time though. Applicants often fudge, obfuscate, or outright lie about the details of their employment history. Dates of employment, salary, title, their reason for leaving. Something does not quite match up. But applicants really don’t invent employment history. We don’t see applicants who claimed to work for IBM for 3 years, when in reality they never set foot in the door.

However, education verifications are a different story. We commonly see applicants who claim education credentials they did not earn. Master’s degrees. Bachelor’s. High School diplomas. Think of the notable stories you have seen in news over the years. Football coaches, CEO’s, College Deans. How many were about their employment history, and how many were about the educational background?

Approximately 2% of the time, we find candidates who did not earn the degree or diploma they claimed to. It’s across the board too. Companies who think their applicants are different? We actually see a higher percentage of fraudulent claims for clients where a particular education level is a requirement of the position. 2% sounds like a small figure. Is it? Look around your organization. How many people work for your company?

Colleges & Universities Starting to Buy in to Background Checks

Well, it certainly took them long enough to catch up to the rest of the country, but we are finally seeing some positive trends when it come to higher education institutions and background checks. I found this great article, Checking Up on Your Past on insidehighered.com (I'm sure today's college students get a kick out of the name of this on-line publication).

The article focuses on last week's annual meeting of the College and University Professional Association for Human Resources (who knew there was such a thing? but I bet you background screeners will be flocking to it from now on). Evidently, the topic of background checks was all the rage. Noteworthy in this article is a study conducted by Stephanie Hughes, an assistant professor of management at Northern Kentucky University on the use of background checks among universities. See a snapshot of results below.

- 13% of university's polled never engage in criminal background checks
- 87% perform checks for some staff positions
- 40% screen for some faculty positions
- 26% conduct checks on some student workers

These are good stats, but a little misleading since "The way the survey was phrased, a “Yes” answer meant only that in some cases, a person in that category would be subject to a background check. That means that a college that would investigate a potential professor being hired in a field where security clearances are necessary or for work with young children would have answered Yes even if the vast majority of professorial hires are never subjected to a criminal background check."

Good article and even better trend nonetheless.

Visa Press Release on Credit Scores

Okay. I owe the readers of this blog an apology for playing it safe and sitting on the sidelines on this one. Credit card titan Visa issued a press release on September 13th titled "Americans Unaware That Employers Can Legally Refuse to Hire Job Applicants With Low Credit Scores" The release points out that many employers are making their hiring decisions based on a credit score. I strongly disagree with this statement. Our experience is that employers stay as far away from credit scores as they can. I wasn't even sure if it was legal or permissible to use a credit score in the hiring decision so I took a week to discuss this topic with the folks at Experian and with some employment attorneys before snapping off an uneducated response. I have learned that while it is permissible, it is most likely ill-advised. The most common explanation for their opinions is the potential for a disparate impact on minorities. Not to mention that a bad credit score can occur for so many reasons unrelated to personal responsibility including divorce, critical healthcare issues, etc.

I did test the waters by responding to an ERE post that published the release going as far as calling out the folks at Visa for not doing their homework. I stand by this assertion. They should have clarified that employers are increasingly reviewing a credit report on prospective employees, not necessarily credit scores. That said, I think that the release is interesting. I just think Visa should have spent a bit more time fine tuning the information.

This Just In! Employers are Perforning Background Checks

Okay. So maybe this isn't new news, but the story never gets old. Two Stamford, CT based HR Consulting firms released a study that shows that 65% of the companies in Fairfield county and the metro New York area conduct background checks. The findings were published in the Greenwich Time. See link to article below.

http://www.greenwichtime.com/news/local/scn-sa-b2b1aug23,0,2640911.story?coll=green-news-local-headlines

While the study doesn't point this out, I think this news is noteworthy because those that conduct background checks in New York are subject to exhorbitant court access fees. For those of you unfamilar, New York established the Office of Court Administration (OCA) to act as a clearinghouse for criminal records in the the state of New York. The price tag for the privledge of this information: $52.00! (More on the OCA in a post later this week.)

Anyway, it is encouraging to see that these outrageous fees are not making it cost-prohibitive for employers to perform proper due diligence on their job applicants.

2008 Trends in Employment Screening

We recently released our thoughts on the upcoming trends in employment screening and are thrilled that someone actually picked it up! Experts Reveal 10 Background Screening Trends in Coming Year was recently published on HR.BLR.com

Hope you find it interesting.

Interview with Experian's Maxine Sweet

I recently conducted an interview with Maxine Sweet, Vice President of Public Education at Experian. The interview was geared towards getting the low-down on the often misunderstood topic of Credit Reports and their use in hiring decisions. The article was published in our quarterly newsletter, The Verifier.

Hopefully, this sheds some light on what a credit check is and how it can be used to make an informed hiring decision.

Interesting UK Study on Social Networking Sites Role in Hiring Decisions

Have you noticed a recent trend in this blog of chronicaling the role Social Networking sites play in the hiring process? This story isn't going away and neither is the trend for employers to go on-line to learn about their candidates. This study conducted in the UK by Joslin Rowe, a financial services recruiter finds that 20% of the employers polled said that they used social networking such as myspace to find out more information about their job applicants. The poll says that 68% of respondants claim to have used search engines. While I question the sampling of employers used in this study, these numbers do suggest that more and more employers are using the internet as a means to qualify candidates. And while this study reflects employers in the UK, this trend no doubt exists throughout the industrialized world.

Here's a question though. I don't have numbers to support this assumption (although I hardly doubt that I am far off here), but I am guessing that most people over the age of 35 don't not have a facebook or myspace account. Using this logic, that means that this practice is being used primarily for candidates just entering the workforce up to those looking for second and third jobs. What are these employers doing with the rest of their candidates? What qualifies as information that would prevent an individual from being employed? Who decides? How is the information found verified to ensure both that it is true and accurate?

All lot of questions. We don't have the answers. I'm sure this won't be the last entry on this topic.

Substance Abuse in The Workplace

Check out the findings of this study on Substance Abuse in the Workplace just released by the U.S. Substance Abuse and Mental Health Administration. The study concluded that 1 in 12 U.S. workers have used illegal drugs within the last month. It would only stand to reason then that a portion of these people are using these drugs at work, which can put employers at significant risk.

Employers should take this study to heart. While many require substance abuse screening prior to employment, it is important to develop a program for random testing throughout the year. Post accident testing is also a good idea for employers.