Background Screening KPIs for the C-Suite

By Accutrace, Inc.

Background Screening KPIs

Background screening is an important part of onboarding any new employee. In a survey by the National Association of Professional Background Screeners (NAPBS), a full ninety-six percent of companies conduct at least one type of background check on new hires. 

Many companies do more. Here’s a breakdown of the percentage of companies that do each type of screening: 

  • 93% – Database/national criminal searches
  • 97% – County/statewide criminal searches 
  • 87% – Social Security number trace 
  • 87% – Credit/financial 
  • 83% – International checks
  • 82% – Drug and alcohol testing
  • 80% – Sex offender registry
  • 78% – Fingerprint-based criminal   
  • 76% – Professional license verification
  • 75% – Education verification
  • 68% – Motor vehicle driving records

Only 4 percent of survey respondents reported that they do not conduct employment background checks at all.

 

Cost

Let's face it.  Cost is an important consideration for every business. When reporting on key performance indicators for your background screening program, you'll want to be sure to cite the amount of money spent on doing background screening with your CFO. She will want to know what the cost vs. value is for the money spent on your program.  The cost may vary as some companies perform certain aspects of their screening process in-house while others may outsource the whole program. In each case, having a clear understanding of how much you’re spending will help you make better-informed decisions about what you need and how to allocate your budget.

Accutrace Reporting allows HR leaders to see a clear picture of how their money is being spent. Our reporting process provides a break down on a per-hire basis of the screening cost and the ability to separate new hires by location, job type, or region.  That gives hiring managers the ability to better plan their hiring initiatives and forecast spending in the future. 

Quality

Have you ever thought about hiring without doing background screening? Fifty-three percent of all job applications contain inaccurate information. Let that sink in for a minute when thinking about your own workforce or team.

With a background screening program, you can objectively determine the quality of your hires based upon the number of adverse reports that are returned. Accutrace Reports can provide a breakout of negative applicant hits by service.  This allows you to identify whether they are based on:

  • Position or location
  • Number of criminal hits
  • Positive drug test results 

This information allows you to gauge the quality of your applicants on a variety of factors which can be used in planning your future hiring efforts.

Time

Time is our most valuable resource and this is never truer than in hiring. A standard metric for talent acquisition teams is "time-to-hire." This is the time it takes from the moment a position is posted to your candidate's first day. Your background screening program can have a big impact on the "time-to-hire" metric so tracking and reporting on your background screening turnaround time is a must.

By breaking out each service in your background screening package, HR leaders can see exactly what services may be causing delays in completing the screening and increasing their "time-to-hire" metric. For example, if an HR leader sees that their time to complete professional references is taking 2 weeks, they may want to consider outsourcing this service to a dedicated team. At Accutrace, we are able to complete professional reference checks and decrease your turnaround time to just 3 days – max – by connecting directly with candidates and reaching out to references up to 5 times over that time frame.

Candidate Experience

Candidate experience is crucial in today’s environment and it is affected by background screening turnaround time. By understanding what your turnaround timeline is and using an agency like Accutrace to drive your "time-to-hire" down significantly, you're better able to set expectations with your candidates about when they can expect to start their new job.  You’ll be able to get them to their first day faster, resulting in happier new hires with a positive on-boarding experience that they will remember throughout their career in your company.  And that ultimately drives your retention rate and helps to reduce employee turnover.

Workforce Planning

What if we told you that by analyzing your background screening program, you could see into the future? Well, that might be stretching it a bit, but with the knowledge you will gain from a good background screening process, you will be better equipped to plan your hiring efforts for new initiatives in the future.

For instance, you might notice that a specific geographic area returns a large number of adverse reports that may be impacting your workforce planning efforts.  If that area cannot support the quality of hires you need in an area, you may decide to refocus your efforts elsewhere.  Your next company expansion or recruitment push may change based on those results so you can maximize quality hires.

Background Screening ROI

What is the cost of doing a background check on every future employee versus hiring someone who may act inappropriately or criminally within your organization? Ninety-six percent of companies do background screening.  Of those who do not, the cost of background screening is cited by 29% of the companies who do not do background screenings as the reason they skip this critical hiring step. 

In fact, the cost to repair a company’s reputation after an incident like a shooting or a violent act is much greater.  And the cost to your current employees in terms of mental trauma, not to mention the hit you might take to your benefits plan next year in healthcare costs far outweigh anything your company would pay now.

Those companies who don’t do background checks are gambling that they won’t have an incident that ends up on the nightly news. Or that someone you're hiring isn’t on drugs, addicted to alcohol, or have a criminal record.  All of which can cost your company more in a tarnished reputation that would take much more marketing money and a long time to repair than the cost of doing background checks.

Additionally, background checks can reveal whether or not a potential new hire has the work experience and education they claim to have to do the job. The cost of turnover, should it be discovered that the new hire can’t do the job you hired them to do, is much greater – anywhere from 100% - 150% of their base salary.

As an HR professional, you want to ensure that you have a safe work environment free of violence. Safety was cited as the number one reason survey participants cited as to why they do background screenings.  Here are the top four reasons companies do screenings:

  • 89% – Protect employees and others 
  • 52% – Improve the quality of hires
  • 45% – Protect company reputation
  • 44% – Must do so by law

From this standpoint, background checks on each new hire are very economical.

Occupational Fraud: What motivates employees to steal from the very company they work for?

No one joins a company with the intent to commit theft.  In fact, most employees are first time offenders, no matter what position they hold.  And these employees are not people who lie, steal, or cheat in any other way. So what motivates employees to steal from the very company they work for?  It’s not greed as many might believe. 

There are two theories that researchers have concluded lead to fraud:

  1. Motivation to commit fraud
  2. Financial pressures outside your organization

Joseph T. Wells states that there are three elements that must be present before an employee steals from your organization. The first is financial pressures they experience outside your company. Even so, without the other two elements, they still wouldn’t commit fraud.

So what does it take? The trifecta of occupational fraud is financial pressures coupled with opportunity and rationalization that the employee is not committing a crime.

Your company will want to ensure that you have a fraud-free workplace by conducting background checks.  The best way to do that is to have a professional firm uncover any criminal offense a potential employee may have.  You can do that by ordering a national criminal record search and a county/statewide criminal search.  These searches will provide you with the information you need to determine if your future employee has a record that would preclude them from working for you.  You can also do a credit check to determine the financial health of your potential new hire.

Liability

A company that does not conduct background checks on new hires is at risk of being liable for their new employee’s conduct on the job that impacts others around them.

Here are four risks your company takes when you fail to conduct background checks.  They are:

  1. False credentials
  2. Cybercrime
  3. Negligent hiring
  4. Unsafe conditions for customers and employees

Someone who misrepresents themselves can cause havoc in your organization.  If they don’t have the education or experience to do the job you hired them to do, they can have a negative effect on your employees and their department team.  It will cost you in terms of lost productivity and in real dollars to recruit and train their replacement. That is in addition to the time your managers will have to document and terminate them.   

PT Research: www.ptresearchinc.com/resources/downloads/Negligent%20Hiring.pdf

Cybercrime is on the rise as employees have access to sensitive data.  They may have the opportunity to sell it, or they may just be disgruntled employees intent on hurting their fellow colleagues and customers.  Conducting a federal and state criminal check on those with access to this kind of data will save you more in the long run.

Companies have been held liable for employees’ misconduct when they have failed to do the proper screening of those individuals.  Courts have held that a company should have known that an employee had acted inappropriately in a past job or had a criminal record.  They should have conducted a background check to uncover specifics related to the job they were hired to do.

An example of this is hiring someone to drive a company vehicle with a DUI on their record you should have known about.  Had you done a criminal search and a DMV search, you would have found this on their record and made a more informed hiring decision.

Everyone wants a safe workplace and employers have a legal responsibility to create one.  Still, acts of violence and on the job accidents occur in the workplace.  As an employer, it is in your best interests to do the background screenings that would reveal a new hire – and occasionally, a random test of current employees – has abused drugs and alcohol or has a criminal record.

Conducting background screening checks for each new employee is a cost-effective way to uncover any issues with your new hire.  You can save yourself a lot of time and money by doing the appropriate screening checks up front.

 

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