The purposes of employee background checks are many, and searches are ordered for a number of different reasons. However, they are mainly done to ensure that a prospective applicant has a clean criminal record and will not be a problem employee or a threat to the security of the company or other employees. The employee might have access to your assets, your clients, your money and even your reputation. A bad hire could put you out of business. Employers now have access to all the information they need about a prospective applicants past to make a formed decision. Therefore, the bottom line is a background check makes sure that the employer is making the safest hire possible.
The following statistics are provided by ADP:
- 30% of all business failures are due to employee theft and related forms of dishonesty.
- The direct and indirect average cost of employee turnover is equal to 150% of the annual salary
- 51% of all resumes, applications, and references provided by applicants contain inaccurate information
Another major purpose from an employer to conduct pre-employment screening on prospective employees are the rampant legal issues that companies face in the wake of hiring a problem employee. Every employer has a legal duty to exercise due diligence in hiring. Employers can and will be held legally and financially responsible for the actions of their employees. In many states the courts have determined that it is the responsibility of the employer to conduct pre-employment screening on prospective employees.
Generally speaking, a jury decides if an employer is negligent by using the "reasonable person" standard. Even if the company had no knowledge of criminal history when hiring an employee, they can still be held responsible should anything negative happen. If that employee attacks a co-worker, for example, and it turns he/she had a criminal history than the company may be held legally and financially responsible. In other words, the employer should have known that the employee was dangerous because they should have conducted a background check, thus, can be held responsible. Often times the employer will come up on the losing end of negligent hiring lawsuits, in fact, the numbers are around 70%. Also, a simple internet search will show that the average award in these cases is over one million dollars. For employers, here is the question. If your firm is sued, can you show due diligence?
For more information how to exercise due to diligence in hiring, please visit www.infocubic.net
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