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Pre-Employment Screenings


Never fly blind: The importance of pre-employment screening

Who are you hiring? Are they who they say they are? Does anything in their past point to potential problems, such as embezzlement, workplace violence or industrial espionage?

Pre-employment screening can uncover red flags, possible threats, connections to competitors and other critical information.

Screenings can also reduce a company’s liability and save money.

Three levels of screenings

Because of the time and cost of background checks, companies need to balance the risk and reward. An executive with access to sensitive information, for example, requires more careful vetting than a front-line employee. In general, pre-employment screenings fall into three broad categories.

Standard background check. For entry-level employees up to lower-level managers, these checks concentrate on verifying the information that a prospective employee provides. Activities include:

  • Verifying social security number, date of birth and aliases (especially maiden names for women)
  • Verifying education and military history, particularly reason for discharge
  • Verifying at least the last seven years of addresses and checking criminal history in those locations
  • Verifying driver’s licenses and driving records for employees who will drive a company vehicle or rent a vehicle while on company business
  • Checking criminal history and civil actions, including arrests or warrants; state, county, local criminal checks; sex offender registries; and the Office of Foreign Assets and Control (OFAC, which includes terrorist watch lists)

Senior background check. For senior-level executives, companies should add a credit check and a more extensive online/social media investigation. Companies should not only check references, but also ask each one for an additional reference. In addition, companies generally should verify certifications, awards, and other third-party information.

C-level background check. A C-level executive is one of the faces of a company, as well as a critical part of operations. An extensive background check should also include investigations into investment and ownership relationships. Companies should look for any connections with potentially conflicting companies or organizations. A search of Uniform Commercial Code (UCC) filings, which must be done state by state, will uncover many business connections and potential financial issues.

Note: In many cases, potential hires must be told that certain checks are being made, and some (such as credit checks) require explicit, written authorization. The liabilities for not informing potential employees or receiving explicit, written consent can be significant.

What background checks can uncover

Thorough pre-employment screenings can uncover three types of potential issues that can:

  • Embarrass or compromise a company’s operations
  • Affect employee morale and/or lead to potential workplace violence
  • Cost a company money

Common embarrassing issues include falsifications of resumes and problems at former employers. A high-level employee who winds up publicly fired because of a resume falsification damages an organization’s credibility. Problems at a former employer, even if they include unproven allegations (such as financial irregularities or harassment), can compromise a company’s operations and its employees.

The real red flags, though, are potential risks of workplace violence. Using social media and other tools to uncover a potential employee’s interests and history helps safeguard a company.

An arrest, even without a conviction, for a violent act, attempted felony, assault and battery, or other violent crime is an obvious red flag. Membership in organizations, or advocacy for organizations, positions or activities that are counter to your company’s culture can also pinpoint potential problems.

A number of issues that can be uncovered during a background check can also save a company money. Not only can security incidents caused by a new hire be expensive, but the cost of hiring and training a replacement can often exceed that individual’s salary. Hiring someone who gets fired quickly because of a problem that a background check would have identified creates two problems: it costs the company money, and it can harm the company’s reputation.

Companies should pay particular attention to an applicant who comes from a competitor. Does that person still have ties to that organization? Will he/she pass on sensitive information that will compromise your company’s operations? Does the applicant have financial difficulties that might lead him/her to sell sensitive information?

Liabilities for negligent hiring

Organizations have a responsibility for the safety of their employees, particularly when a background check would have uncovered a potential threat. Companies can get sued for not doing thorough background checks, and some have paid multi-million dollar judgments when unscreened employees have harmed customers or other employees.

The damage to a company’s reputation and credibility, while incalculable, can be even greater.

For example, a federal contractor, who fatally shot 12 people and wounded three others at a Washington, D.C., naval base had a background of violence, had been arrested for violent acts and was fascinated by guns. Neither his employer nor the company responsible for his background check apparently uncovered any of this, allowing him to obtain a Secret clearance.

Numerous lawsuits will ultimately cost the Navy and several contractors millions, or possibly tens of millions, of dollars. And, of course, 12 people are dead.

Not all workplace violence is foreseeable. But thorough pre-employment screenings can protect a company and its employees from many potential threats.