Background Checks Key Influence in Hiring Decisions

Robert Capwell

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Background CheckA recent survey of randomly selected HR professionals conducted by the Society of Human Resource Management (SHRM) asked the question.  “In general, when making a hiring decision about a job candidate, which are the most important factors influencing the final decision to hire a particular candidate over another?”   The survey revealed 9 key factors, of which 8 are directly supported by a comprehensive background check.  Responses to this question confirm the critical role that background checks play in the decision making process for new hires.


The following are responses based on order of influence within the final decision making process:

  • 87% - Previous work experience directly applicable to the job
  • 86% - A good fit with the job and organization
  • 78% - Specific skills expertise needed for the job (e.g., technical skills, communication skills)
  • 78% - Performance during the interview (e.g., professional demeanor, good communication skills)
  • 60% - Favorable reference background check results (e.g., verification of employment history)
  • 60% - Education directly applicable to the job
  • 59% - Favorable criminal background check results (e.g., criminal history)
  • 51% - Certifications directly applicable to the job (e.g., CPA, PHR, PMP)
  • 19% - Favorable credit background check results (e.g., credit history)

Two-thirds of the most influential factors are supported and can be properly assessed through conducting a comprehensive background check on potential new hires.  Knowing more about your candidate up front is critical to determining proper qualifications, experience, skill level, and even potential security or safety risks for a complete candidate evaluation.  A comprehensive background check will take a closer look into the following core areas:


Past Employment Experience

Previous employment experience and performance can be a great indicator of future performance.  A thorough employment verification should never be taken lightly and employers should never rely on a candidate’s resume or job application for this information.  Connecting the employment history dots and looking for potential fraud is critical and a thorough verification should be conducted with all relevant past or even current employers.

In a down economy or within a competitive job market, pressure on job-seekers is even higher as record numbers of candidates are vying for a significantly reduced number of jobs. Candidates typically use creative methods to enhance their work experiences: create longer work histories with a particular employer; stretch position titles such as Administrative Assistant into Operations Manager; and expand work responsibilities to separate them from the competition.

Here are a few ways candidates are getting more creative with providing previous work history:  

  • Providing only the year of a start and end date creates the perception of longevity at a past employer or eliminates a "gap" in employment
  • Stretching the dates of employment at one employer to cover employment at an undisclosed company that may not provide a favorable reference
  • Lying about the reason for separation from a past employer
  • Exaggerating job titles to reflect greater job responsibilities and work experience
  • Failing to disclose the nature of employment as an intern or a part-time position
  • Using the name of recognized global brands as an employer where the candidate was employed under an affiliate contract or through a part-time staffing firm
  • Providing exaggerated levels of income to obtain a higher starting pay rate
  • Listing fictitious overseas employment in hopes that it will not be verified

Candidate fraud is costly to a company’s bottom line from: loss of productivity due to unqualified employees; additional recruiting and on boarding costs for replacement hires; and the cost in training, time and effort for your staff to verify each candidate’s employment history.  Thorough and detailed interviews need to be conducted for all relevant employers and supervisor references for potential employers to get the complete facts around candidate experience.  This will help ensure that the candidate is a good fit for the job and your organization.


Proper Education and Credentials

For many positions, education credentials play a key factor in the domain knowledge a candidate possesses in a particular area of study.   Think about an unqualified engineer responsible for designing airplanes or at the controls of a nuclear plant; or a physician with no professional medical education diagnosing patients.  This seems pretty outrageous; however, there are over 2,615 known diploma and accreditation mills identified by Verifile Limited within a 2011 Accredibase Report.  These diploma mills provide fraudulent or unaccredited degrees to individuals for just a few dollars and include little to no course work.  Padding or manufacturing education credentials provide a way for candidates to separate themselves on their application in hopes of being more competitive or even to qualify for a higher salary.  Here are a few tactics that candidates use to pad or even embellish their education credentials:

  • Lying about obtaining a high school diploma or GED certificate
  • Providing a degree from post-secondary school where a candidate only attended and never graduated
  • Listing a different or additional degree from an institution to pad credentials
  • Padding transcripts or grade point averages
  • Providing a fraudulent degree from a well-known institution
  • Obtaining a degree from a diploma mill that offers unaccredited degrees with little to no course work
  • Padding honorarium certifications or extracurricular involvement while attending school
  • Listing a fictitious overseas education in hopes that it will not be verified

The practice of lying about education credentials leads to higher turnover, production loss, concerns for public safety and even higher wages.  Education credentials should always be verified directly by the institution, no matter if an applicant provides a copy of their diploma or even a transcript.

Applicable Certifications
Certain positions may require certification, continuing education or a license issued by a governing body or association that represents a particular industry or profession.   Certifications can range from a commercial driver’s license (CDL), certified public accountant (CPA), successful completion of a professional engineering exam (PE), holding a certain rank from the military or obtaining a certificate in Human Resources such as Senior Professional in Human Resources (SPHR) or other credentials.  These types of certifications may be a requirement of federal or state law to practice professionally, work in a certain industry, or obtained as part of experience or tenure in a professional career or required continuing education to maintain their professional certification.  Certifications provide an additional level of education, training and professional commitment to support a candidate’s expertise and technical skills.  All are supported by a professional governing body where an individual’s license or certification can be verified.  Employers should never take an applicant’s certification or license credentials at face value and should always verify its existence through the issuing body.  Hiring professionals in certain security and safety sensitive positions may be required by law and hiring such individuals without proper verification could result in heavy fines, sanctions or even criminal penalties to employers, if not verified.   Applicants looking to elevate themselves on their application or resume may use such credentials as separating factors for professional experience.

Here are a few things that employers need to keep in mind when verifying credentials or a license held by an individual:

  • Understand that a professional license may be required by government law to practice in certain professions
  • Never rely on a candidate’s title or professional designation at face value
  • Only verify the validity and accuracy of an applicant’s credentials/license directly through the issuing body or originating source
  • Verify if the date of issue matches the candidate’s claims along with noting the expiration date of the certification or license
  • Note current status and type of license obtained through the issuing body
  • Obtain any disciplinary actions taken against an individual or license

Criminal Background Checks
Criminal background checks are a vital part of the screening process for employers striving to achieve due diligence for the purposes of increasing workplace security, safety, and reducing the potential of negligent hiring litigation.  Criminal background checks that support this goal should be comprehensive and comply with all international, federal, state and local laws.  A comprehensive background check should include a thorough search of criminal records within all areas where a candidate has lived, worked and even attended school.  A thorough search should also include an electronic criminal database search to uncover potential criminal offenses committed outside of a subject’s residential movement patterns.  An electronic criminal database includes records from all 50 states and includes information from the Department of Corrections, Department of Public Safety and Multi-state Sex Offender databases.  Additional information such as FBI, U.S. Marshal, U.S. Customs, U.S. Department of Justice, U.S. Secret Service, DEA fugitive and most wanted files is also included.  All information reported from the database needs to be verified from its original reporting source for proper compliance with the Fair Credit Reporting Act (FCRA).

When analyzing criminal information as part of the decision making process, employers should always be mindful of the following factors associated with the crime and the position being applied for.  Employers are encouraged by the Equal Opportunity Employment Commission (EEOC) to consider the “green factors” when analyzing criminal data as it relates to employment decisions. 

  1. The nature or gravity of the offense or conduct;
  2. The time elapsed since the conviction and/or completion of the sentence; and
  3. The nature of the job sought or held

On April 25, 2012, the EEOC issued enforcement guidance through its publication titled “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.”  Employers using criminal history information within their decision making process should develop a documented policy and process when evaluating such information to ensure compliance with EEOC regulations.


The Use of Credit History
Credit reports are a critical element of the background screening process for many employers. Banking, finance, security, public safety and the pharmaceutical industry are just a few industries that rely heavily on credit reports for making a hiring decision.  Consider a candidate for a government position who has defaulted on a government backed student loan or possesses tax liens against them.  What about an employee that has fiduciary responsibility over company funds, check writing authority, or access to large amounts of cash?  Consider an employee that is granted a company credit card and struggles to manage their own personal credit within acceptable limits.  What about an employee that has access to customer credit card information or confidential consumer information which could lead to potential identity theft?  A credit report may give insight into a candidate’s stability and trustworthiness for a specific position, although there is no proven correlation to a candidate’s credit score and their ability to perform a job.  For that reason, a credit score is not part of an employment credit report.

Proper use of credit report information within the hiring decision process is imperative to avoid discrimination and legal liability.  Each report should be reviewed on an individual basis and employers should provide a candidate/employee with an opportunity to respond to derogatory information found within their credit history, since many times there are unavoidable circumstances which lead to poor credit.  Create a policy that is consistent when using credit reports as part of the screening process and be aware of potential restricted use within certain states.

Specific state laws have been enacted for responsible credit report use for employment purposes.  As of the publication date of this article, California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington either prohibit or restrict employers from using such information at a certain time within the hiring process or restrict the use of credit reports based on position or industry.  Employers should refer to their corporate legal counsel and active legislation within their state for proper use.

Additional Credentialing
Certain industries such as healthcare, childcare, security, transportation and banking may require specific screening due to federal and/or state law or may be required due to the safety and security risks within a particular industry or specific profession.  Specific background screening components such as screening against the FBI database, the need for fingerprinting, bonding or the search of domestic and international sanction lists may be a required within the screening process.  Other requirements may include yearly screening of criminal history, driving records, credit evaluation or a check against fraud databases.  Pre-employment or ongoing drug and alcohol testing or a regime of physical exams or fitness tests are mandatory for specific positions in certain industries as well.  It’s important that employers have a firm understanding of these requirements within their particular industry for proper compliance.

Conclusion
By incorporating a comprehensive and compliant background screening program you can properly assess, screen and credential your future employees and alleviate the overwhelming challenges, risks and liabilities of making a bad hiring decision.  It is important that all employers work with their legal counsel to develop a policy that is legally compliant and within EEOC guidelines.  Proper assessment, credentialing and validation of a candidate’s attributes and skills will help to ensure you find the right candidate for the right job and ultimately add to the future success of your company.

Employment Background Investigations works with employers across the nation and around the world to provide a full range of comprehensive and legally compliant background check solutions to help reduce the risks and liability of a bad hire.  EBI can help design a program that is comprehensive, compliant, and timely by using a combination of county, state, federal and national electronic database resources for a complete criminal background check solution.

EBI is committed to providing employers with valuable education and resources on changing legislation and cutting-edge and compliant solutions to meet federal, state, local and international legal requirements.  All content provided by EBI is published for the convenience of its readers and should never be deemed as legal guidance or advice.  Always consult your legal counsel for specific advice on local laws and industry regulations.

If you found this information useful, select the button listed below and access more industry news, resources and tips from EBI, a NAPBS Accredited screening firm and global leader in the background screening industry.

Background Checks, EEOC & FCRA

Robert Capwell

Posted By: Robert Capwell

EBI’s Chief Knowledge Officer, Mr. Robert E. Capwell, is considered one of the leading experts in the background screening industry with over 22 years of experience in the field. Mr. Capwell was a contributing author of the second edition of the ASIS Pre-employment Background Screening Guidelines and has written numerous articles and whitepapers for various publications including a periodic column on background screening for The Society for Human Resource Management (SHRM) Online. He has been quoted in The Wall Street Journal, Human Resource Executive Magazine, Entrepreneur Magazine, and several HR-related publications. Mr. Capwell speaks regularly to industry colleagues and HR Professionals both nationally and internationally.

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