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Cost of NOT Conducting Employee Screening

by Joe Hoover

Here's THE BIG QUESTION: "What risks do I face if I don't screen an applicant?"

These are THE RISKS:
  • Possibility of being liable; of being sued.
  • Negative news coverage and possible loss of reputation of the company.
  • Stress of litigation and the investigative process.
  • Cost of legal defense, even when not guilty.
  • Loss of time, productivity, and income; another training period.
  • Loss of equipment and property if by theft.
  • Cost of training a new hire.
  • Loss of income/profits in general.
  • Theft, embezzlement, a shooting, a  assault.


A person with a job in the accounts receivable department, if inclined, has the advantage to embezzle. An unscrupulous person employed as a cashier might be of a mind to steal from the till. A job that involves stress and close proximity to others could result in violence aimed directly at you or your employees. A heavy equipment operator with a drinking problem or medical issues could cause serious injuries or death. You could be held libel.


. . . He talked the good talk, stated he had experience in allied fields, and had participated in various related endeavors and projects and enterprises - expertise and experience you could use in your business. Six months down the road he's calling in sick and showing up late. That's when you find out about his drinking problem. And the five DUIs you didn't know about. And it could be way down the road before you discover any of this . . .

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That $19.95 "Criminal Search" you ran: You're not sure whether he even gave you his correct date of birth! The "Search" results came back: He was "clean." Of course he was...

Add to the dilemma six months of poor production and the repercussions of poor management on the subject's part. Plus, once again, your time is on the line; you've got to go through the unpleasant interviewing process all over again . . .

But, now, finally, the bad experience is behind you and you're ready to move on. It was costly, but you'll survive. Right now you've got to hire somebody else.

All that money you spent on training the first loser, and you've gotta spend it all over again . . . .

What it boils down to is: you saved a couple hundred bucks. You could have lost your company!


By not conducting a background screening at all, you, as the employer, could be subject to lawsuits and crippling penalties - plus court awards - if an employee you didn't check out commits a crime against a fellow employee or a client.


The cost of employee theft and fraud and the cost of recruitment and retention are some of the things that keep Human Resource professionals up at night.


Governing bodies and courts in the United States have created laws regarding employers' responsibilities. It pays to KNOW who you are hiring before you put your clients and employees at risk. What if the guy had been driving the company vehicle and got into an accident; maybe injured or killed somebody. Or hurt somebody in the warehouse while he was operating a fork-lift.

Was he going into people's homes, representing your company? What if he commits a crime, like rape? You could be held liable. What if he was a sex offender, a real risk to you and your employees, and you didn't check?

Theft from employees is always a possibility. It's not just your property either; he might have stolen your client list!

He could have been a repeat "Workman's Comp Offender," looking for an easy mark: You.


Not all risks can be measured in dollars alone. Consider loss of talent, loss of morale, loss of reputation. By law, an employer must exercise due diligence in hiring to ensure that people selected do not pose a threat to others. Poor hiring decisions can have long-term financial and legal ramifications for employers and your other employees. A meticulous pre-employment screening can significantly reduce the risks.


People lie on their resumes and job applications: Forty percent (40%) of applicants lie. And, they usually get away with it! Sixteen percent (16%) of executive sum's contain false academic claims and/or material omissions relating to educational achievement. It's called, "resume stuffing." No wonder there is a rise in background checks being conducted by employers!

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  • Criminal conviction rates are on the rise nationally among job applicants.
  • Employers lose sixty percent (60%) of negligent hiring/supervision jury trials.
  • Jury award against employers in  harassment lawsuits: More than $250,000.
  • Inconsistencies between resume information and background check data continue to increase.
  • One-third of job applicants have one or more violations or convictions on their driving record.
  • The average jury award for negligent hiring against companies, big and small is $900,000.
  • Thirty percent (30%) of all business failures result from theft or embezzlement.


Detailed background checks that include state-wide and national criminal checks, employment verification, educational achievement verification - plus several other standard checks - costs between $100 and $200.


Neither the government nor we regular citizens have a way to check whether or not an employee's Alma mater is a "diploma mill" that requires little, if any, academic work.

Some employers conduct background screenings grudgingly, concerned only about avoiding liability. Typically, only the bare minimum searches will be ordered - mainly to protect against claims of negligent hiring. The courts will decide whether "a reasonable effort" has been applied, should litigation be instituted.


Most all criminal records are indexed by full name and date of birth. The most accurate non-federal criminal records searches are accomplished at the county level.

Professional criminals know the system and the screening processes employers use. Criminals and con artists will likely provide misleading information on applications.

One of the first things criminals learn during lockup is: How to NOT leave a paper trail. Experienced crooks teach, "Use a different middle initial. Never give out your true identifiers: your date of birth; your social security number; a recent address."

Most background checks are conducted "pre-employment," however, if your company has won a contract to do a job for the government, background checks for all participating personnel may be required, even if these folks have worked for you for years.


  • Name and address history.
  • Social Security number (SSN) & date of birth (DOB) verification.
  • National, Statewide & County Criminal: Felony and misdemeanor.
  • Previous employment verification.
  • Education achievement verification.
  • Professional licensing verification.
  • Driver history record.
  • Derogatory Credit Report entries, such as liens, bankruptcies & judgments.


There has been an explosion of litigation - plus a lot of media attention - relating to misconduct by clergy who violated their position of trust in their church. The consequences are devastating for the victims involved, their families, the church and the community. Churches must exercise sound accountability and good judgment when selecting paid employees AND volunteer workers. Churches are subject to law suits for liability damages for the actions of a problem employee AND/OR a volunteer.


Make sure your search includes a criminal search in the applicant's county of residence, plus the counties where he or she resided, worked, and attended school.

Analyze your workplace. Consider the harm and costs a bad hire could bring to your organization. Develop a consistent and comprehensive screening policy.

Let everyone know you conduct systematic background screenings as a matter of course: It's "Standard Operating Procedure." Put it on your Web site. Put it in your classified ads. Encourage applicants to be open about past indiscretions, because frank discussions assure better hiring decisions.

More Background Checks Articles

For more information regarding the various types of background checks available, please read the in-depth articles from the following links: Employee Background Checks, Tenant Screening, Business Background Checks, Asset Searches and Criminal History.

Article provided by: Investigative Professionals LLC, 2012 Information Providers.

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