IEEE Spectrum One reason fraud rates haven’t risen might be the very real fear of getting caught. More employers are now doing stricter background checks on their potential employees, particularly for candidates who received their education or work experience abroad and for those applying for IT positions with access to confidential data.
The Attleboro, Massachusetts District Court will be closed indefinitely due to extensive smoke and water damage caused by a fire that happened on the morning of May 22, 2009. Searches will be conducted at a neighboring courthouse but access to records will be unavailable until further notice. We will keep you posted on any updates we receive.
Another company is in the news because a former employee allegedly found it easier to take clients’ money instead of investing it as promised.
Firm pays $2M for bad hire
Man accused of rape, embezzlement
This employee allegedly had over $400,000 in debts before he was hired, a fact easily identified within seconds after running a credit report, which costs about the same as lunch at Applebee’s.
And a more comprehensive background check, one that includes education and employment verifications, a criminal records search, a motor vehicle report plus a credit check? Roughly a single day’s pay. If the new hire is a financial advisor handling millions of dollars of client assets, a background check probably costs the same as one hour of their salary.
We have seen more stories about embezzlement these days. My colleague blogged on another example just last week. It’s saddening but not surprising to see companies get burned because they do not background checks. And while there is FAR more awareness of the need to conduct employment screening compared to 10 years ago, many organizations still have a ways to go in terms of reducing their risk and evaluating potential damage.
Consider this company. It’s not only the out of pocket cost to investors this financial services firm has to contend with. There’s the hidden expense as well. Current and potential investors who may leave track marks sprinting in the other direction. When all is said and done, this will cost far more than $2 million dollars. It’s too bad so much money could have been saved by spending so little in advance.
First came diploma mills – organizations ready and willing to issue and verify a fraudulent college, graduate or doctorate degrees for an applicant. Then came employment mills who, for a small fee, will make applicants “employees” of one of their partner companies in order to fabricate work experience. Now, we have document mills – underground organizations selling false citizenship documents to illegal aliens to aid them in obtaining employment in this country.
I don’t even want to contemplate what’s next.
WBZ – May 21, 2009
For immigrants living in this country illegally, often the only way to get a job or a driver’s license is with phony documents.
It’s an underground business thriving in several communities around Boston. Chief Correspondent Joe Shortsleeve says federal agents are working undercover to shut down these shady operations.
The video is blurred and grainy but the man in the driver’s seat is an undercover federal agent posing as an illegal immigrant. The video shot by federal investigators in Lynn shows the agent buying phony documents needed to work or to get a driver’s license.
Bruce Foucart is the top federal agent in Boston charged with tracking down criminals who are making big bucks selling bogus documents to people who are in this country illegally.
Foucart says “it is very big problem.”
The Immigration and Customs Enforcement Agency’s Boston office is a busy place these days. Foucart says it matter of national security. “The people who are making and selling these documents do not run background checks. So they do not know if they have terrorist or a murderer from another country.”
I just came across this release from Carnegie Mellon University entitled “When Is It Safe to Hire Someone With A Criminal Record”. The study suggests that a person has been fully rehabilitated after a period of 5 years without any additional criminal records. By no means do I endorse this study. They might be right and they might be wrong. One thought though: just because a person hasn’t been charged or convicted of a crime in five years doesn’t mean that that they have not engaged in criminal activity. It simply means that if they did, they haven’t yet been caught. What do you think?
The new study, which appears in the current issue of Criminology, estimates that after five years of staying clean an individual with a criminal record is of no greater risk of committing another crime than other individuals of the same age. The research comes at a time when President Barack Obama’s crime agenda includes breaking down employment barriers for people who have a prior criminal record, but who have stayed clean since their earlier offense.
I recently took stock of some background screening lessons we have learned since the economy went south. Here’s an excerpt from an article just published on employeescreen University.
So we’ve all nearly made it through the first half of 2009, inarguably one of the worst financial periods in our lifetimes. And while we hope that the worst is finally behind us, we are all still fearful of what is to come. One of the most positive trends I am starting to see is that many of us are now focusing on the future. We are building up our individual departments and organizations to be leaner, smarter and stronger so that we can emerge from this whole thing in a position to thrive. We don’t seem to be as paralyzed by the fear described above and instead are using this fear to motivate us to push through. GreenlightJobs president and CEO Lisa Kaye recently wrote an insightful blog post on how we can and should use the fear and uncertainty we feel for motivation to fuel us.
The purpose of this essay is to examine how the state of our economy has affected the use and implementation of employment background checks. We will also discuss how it has driven some interesting trends and what it means for the future.
We’ll start with the obvious. Today, there are more people competing for fewer jobs. While hiring managers have the proverbial “pick of the litter”, they are being flooded with resumes. Further, the pressure to hire the right person the first time has never been greater as organizations no longer have the luxury of time or money that they once had to allow someone to develop. Those who are hired are expected to produce more work with fewer resources. This confluence of events means that employment screening and background checks are now more important than ever to organizations.
The list of trends includes:
- Background Checks Aren’t Being Sacrificed
- Troubling Statistics Concerning Adverse Information
- Hiring Standards Are Tightening
- The Need for Speed
- Shifting Reliance on Credit Reports
- Workplace Violence is on the Rise
(Speaking Engagement) (http://www.eace.org/conference.html)
Social Networking Sites: Can You Always Trust What You See?
Presented by Jason B. Morris, President and C.O.O. at EmployeeScreenIQ
June 18, 2009 at 11:15AM-12:15PM EST
Buffalo Marriott Niagara Hotel
The social network revolution has changed many communication channels, but should it affect the way job applicants are screened? Sites such as Facebook, My Space and LinkedIn contain a wealth of personal information, but should you trust the information found on these sites? Does this practice pose a threat to possibly violating FCRA and EEOC guidelines and other best practices? Join EmployeeScreenIQ president and C.O.O., Jason B. Morris for this insightful presentation.
This session will help you understand the possible negative ramifications of using information from social networking sites in your employment screening processes.
So we’ve made it through the first half of 2009, inarguably one of the worst financial periods in our lifetimes. And while we hope that the worst is finally behind us, we’re still fearful of what is to come. One of the most positive trends I am seeing is that many are now focusing on the future. We are building up our individual departments and organizations to be leaner, smarter and stronger so that we can emerge in a position to thrive. We don’t seem to be as paralyzed by the fear described above and instead are using this fear to motivate us to push through. GreenlightJobs president and CEO Lisa Kaye recently wrote an insightful blog post on how we can and should use the fear and uncertainty we feel as motivational fuel.
In this essay we’ll examine how the state of our economy has affected the use and implementation of employment background checks. We will also discuss how it has driven some interesting trends and what it means for the future.
Let’s start with the obvious. Today, more people are competing for fewer jobs. While hiring managers have the proverbial “pick of the litter,” they are being flooded with resumes. Further, the pressure to hire the right person the first time has never been greater as organizations no longer have the luxury of time or money to allow someone to develop. Those who are hired are expected to produce more work with fewer resources. This confluence of events means that employment screening and background checks are now more important than ever to organizations.
Observation 1: Background Checks Aren’t Being Sacrificed
While organizations are cutting expenses across the board, we have not seen that they are sacrificing their screening practices. In fact, some are even bolstering their programs because of the aforementioned glut of candidates. We’ve seen a rise in the number of clients expanding the scope of criminal records searches by including more counties or a national criminal record search. Organizations also seem to be increasing their efforts related to employment verifications and references. While these measures increase the cost of a background check, it allows organizations to evaluate more information so they can make an informed hiring decision.
Observation 2: Troubling Statistics Concerning Adverse Information
Unfortunately, we are also noting some disturbing trends that should concern employers. Criminal hit rates have escalated since the economy hit the skids in the second half of 2007. EmployeeScreenIQ currently finds that roughly 19% of the applicants we screen have some type of criminal conviction on their record. This is up from 15% prior to 2007. It is important to note that not all of these records prevent an individual from being hired; however, hiring managers should look closely at each applicant to determine how relevant the indiscretion is to their potential job. Here’s the breakdown of offenses we’ve identified over the past couple years:
Felony Record – 15%
Misdemeanor Record – 67%
Ordinance Violations – 18%
At the same time, EmployeeScreenIQ continues to find a 50% discrepancy rate between what job candidates represent on their resumes and job applications and what is revealed by employers and academic institutions. This number has actually held steady for a couple of years, but it is elevated compared to pre-recession levels. The most common inconsistencies continue to be related to employment length, salary and job title. Here’s a breakdown:
Discrepancy in Dates of Employment – 31%
Discrepancy in Salary – 36%
Discrepancy in Job Title – 33%
Misrepresentation of Academic Credentials Approx. – 10%
Last, an obvious trend is that we are finding a rise in the amount of applicants with adverse information on their credit reports. We don’t keep actual statistics on this, but will address this trend in greater detail later.
Observation 3: Hiring Standards Are Tightening
Before the recession, organizations were hiring at a blistering rate. There never seemed to be enough qualified candidates available, causing some organizations to relax their hiring standards to remain properly staffed. Today, it’s the exact opposite. Employers’ hiring standards have tightened considerably—they are no longer letting “anyone with a pulse” through the door. White lies about past employment and qualifications are no longer acceptable, nor are borderline criminal convictions that might have slipped through in the past.
Observation 4: The Need for Speed
Weeding through the flood of resumes for ideal candidates and on-boarding them as quickly as possible is the name of the game. Organizations are increasingly turning to applicant tracking and talent management platforms to help them process applicants and to save money. Further, integrating a screening solution with a recruiting platform helps accomplish the same goals. All of the information needed to conduct a background check on a candidate is already there. Rather than wasting the time and money of having someone re-enter the information, integration allows the data to flow seamlessly and securely to your screening provider.
Observation 5: Shifting Reliance on Credit Reports
Anyone who reviews credit reports on a regular basis knows that even in a good economy, those with impeccable credit are hard to find. Nowadays, finding those with good credit is nearly impossible. As a result, we have seen a number of organizations relax their standards when evaluating credit. Failing to do so would significantly impede their ability to hire anyone.
For organizations who utilize credit reports, it is important to evaluate what information or combination of adverse information constitutes a red flag. It also makes sense to determine which positions require this information and how the candidate’s credit report is related to that role.
Observation 6: Workplace Violence is on the Rise
Incidents of workplace violence had been on the decline over the past decade thanks to education, aggressive prevention programs and background checks. Unfortunately, these rates have begun to creep up again over the last couple of years. Reported cases of workplace violence rose 13% from 2006 to 2007. And while 2008 statistics have yet to be reported, it is widely expected that these numbers will show an increase again. While a direct nexus between workplace violence and bad economic times hasn’t been established, Barry Nixon, Executive Director of the [National Institute for Prevention of Workplace Violence](http://www.workplaceviolence911.com/), Inc. suggests that “as crime rates continue to rise throughout the country, incidents of workplace violence tend to follow.” This is important because a rise in criminal activity can be directly attributed to a poor economy. Nixon goes on to say, “as people become more concerned about personal finances and the possibility of layoffs, stress levels in the workplace tend to be elevated. Stress and anxiety can certainly contribute to incidents in the workplace.”
What does all of this mean?
More than anything, this information should cause employers to take a closer look at their current screening program and make sure that it’s in line with the new realities of this economy. Refining your processes and procedures does not necessarily equate to increasing your overall background screening budget. In fact, in some cases you might find opportunities for savings. It simply aligns your risk-management and recruiting efforts and allows you to focus on acquiring the best candidate for the job. Doing so now will ensure that as the economy improves, you will emerge in a stronger position than before.
Nick Fishman is Chief Marketing Officer for Cleveland-based EmployeeScreenIQ , a best practices provider of employment screening services throughout the U.S. and worldwide. Nick can be reached at (800) 235-3954 ext. 441 or email@example.com.
All U.S. courts will be closed on Monday, May 25, 2009 in observance of Memorial Day. Expect a 24 hour delay in all requests leading up to the holiday weekend.
We hope everyone enjoys a safe and relaxing weekend.
The state of Utah recently passed the Selections Procedure Act (HB 206) that states that employers may not request information related to an applicant’s social security number, date or birth or drivers license number until either:
- The applicant is offered a job; or
- The time when the employer obtains a criminal background check, credit check, or driving record check to which the applicant has consented.
According to Seyfarth Shaw labor and employment attorney Pam Devata “Employers subject to this law may also not use information about an applicant for any other purpose than to determine whether the employer will hire the applicant as an employee. The law additionally places requirements for employers to maintain a policy regarding the retention, disposition, access, and confidentiality of this information. Finally, employers may only keep such information about applicants about whom they do not hire for a period of two years after obtaining the information from the applicant.”
State of Utah employers take note that this law went into effect on May 12, 2009 and compliance is mandatory.