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03/19/2007 What You Don’t Know CAN Hurt You
If you are an employer, business owner, human resources manager, or in any way responsible for hiring new employees, these recent news items should be of interest:
Departmental charges are brought against 13 high-ranking New York City firefighters who are alleged to have used phony college degrees and credits for promotion within the department. They are charged with having purchased their degrees from an offshore, Liberian based “diploma mill.”
A motor carrier loses a $3.5 million judgement when one of their drivers, with a blood-alcohol level more than twice the legal limit, runs a red light and plows into a vehicle driven by a mother and her three children. The jury finds the motor carrier liable for negligently hiring and retaining the driver because the carrier failed to check the background of the driver who had a history of traffic offenses and charges of public drinking.
The Chief Executive Officer of Radio Shack was forced to resign after it was found that on his resume he claimed non-existent degrees from a college he had only attended for 2 semesters.
The former systems administrator of a major U.S. investment firm is awaiting sentencing for computer sabotage and securities fraud. He was convicted of unleashing a “logic bomb” on the company that left 17,000 brokers idle and cost $3.1 million to repair. A background check, had it been done would have revealed that the systems administrator had burglary and aggravated assault convictions in the 1960s, drug charges in the 70s and 80s and a DUI case in the 90s.
Although these incidents occurred in widely differing industries, transportation, civil service, retail, and financial, all of them shared a single common denominator – a failure of the employer to conduct a proper and complete background screening of a potential employee.
All companies, whether white collar or blue, depend on their employees to be honest, dedicated and competent. Unfortunately not all employees are able to meet those high standards, and the ones who don’t can have disastrous effects on the bottom line of any company. As all too many employers have found out, what they don’t know about their employees can hurt them
Consider that according to the U.S. Chamber of Commerce:
- $20-$40 Billion is lost each year due to employee theft
- Embezzlement alone costs companies $4 billion a year
- 30% of all business failures are caused by employee theft.
Add to those numbers the fact that:
- 10%-12% of all applicants have a criminal history
- 43% of resumes contain significant inaccuracies about experience, education or job ability
- Employers lose 79% of all negligent hiring lawsuits
- 66% of negligent hiring trials result in average jury awards of $600,000
- The average jury award for workplace violence injuries is $3 million
- The Small Business Administration estimates that for every dollar invested in employee screening a $5 to $16 return is generated
The statistics and examples cited above are relevant to the “bottom line” of any business, and should provide sufficient reason for most companies to consider implementing an effective employee-screening program. But in this post-911 world there are other reasons to consider such screening.
- This past December red flags were raised at a Rhode Island truck-driving school when a foreign born student indicated a desire to obtain a CDL with a hazmat endorsement in half the time it normally takes. He also made it known that he was not particularly interested in learning how to back up. The school contacted Federal and State authorities that began an investigation. That investigation, still ongoing, showed that the “student” held driver’s licenses from 3 States, had a string of 13 different addresses, was in violation of his visa, and had traveled back and forth to the Middle East.
Companies these days have to contend with many threats – from ever-growing and intrusive regulations, to skyrocketing costs and cutthroat competition. The employees and staff of any business should be a resource for that business not another threat to it.
All employers, regardless of industry or size can benefit from screening potential employees. The benefits of a screened workforce are many, including:
- Reduced litigation, liability and insurance costs
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A lower turnover rate and better attendance
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Substantial reduction in theft, fraud, embezzlement and dishonesty
- Increased productivity
- Compliance with regulatory requirements
- Verified qualifications, including education and experience
- Peace of mind – knowing that your workforce is an asset, not a liability to your business
If you have decided that screened employees make sense for your business, click on the link below and find out more about Foley Services comprehensive and affordable employee screening solutions.
or Contact: Kirk Spooner
National Accounts Representative
1-800-253-5506 x469
KirkS@FoleyServices.com
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