Background checks help employers ‘get it right the first time’

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Posted: Friday, April 5, 2013 12:00 am

If a lawsuit or arrest is part of your past, your new employer increasingly wants to know.

As the economy improves and companies add to their ranks, many are taking the opportunity to revamp their hiring processes. And, with many people still out of work and vying for a limited number of jobs, employers can be pickier than ever.

At the AAIM Employers Association, a St. Louis-based provider of employer-related business services to 1,600 employers, the number of companies utilizing background checks and drug tests more than doubled last year while its membership rose only marginally.

In 2012, 810 companies sought AAIMCheck background checks or drug tests from the organization, up from 392 in 2011.

Philip Brandt, AAIM’s president and CEO, said the sharp rise in the number of checks isn’t due to increased hiring activity by its members.

Instead, employers are increasingly becoming aware of the high costs when they don’t pre-screen employers, he said.

“Hiring people costs money,” Brandt said. “To get it right the first time is what employers are more focused on now.”

An added danger, Brandt said, is the greater exposure companies are faced with when a high-ranking employee is caught flubbing information on his or her resume.

Examples of executives whose resumes contained errors that proved embarrassing for their employer include Yahoo’s former CEO Scott Thompson, who was ousted from the company a year ago after news broke that he claimed a degree in computer science he hadn’t earned.

“There’s more and more awareness when hires go wrong,” Brandt said. “That can be devastating for their business.”

But with the increase, employers need to make sure they don’t run afoul of federal law.

“It’s a trend that we’ve been noting for several years, particularly after 2011,” Michelle Rodriguez, staff attorney for the National Employment Law Project, said about increasing number of employers conducting background checks and drug tests. Rodriguez said the number of companies that offer these services is also increasing, and technology is making it faster and easier for the checks and tests to be performed.

Her nonprofit group is fielding more complaints from people who say background checks are making it impossible to find work, she said.

“Unfortunately, there are too many companies that have blanket bans” based on criminal history or other factors, Rodriguez said.

The U.S. Equal Employment Opportunity Commission provided new guidance last April that said the use of some background checks in hiring can violate prohibitions against employer discrimination in Title VII of the Civil Rights Act.

For example, a company could be in violation of Title VII if it uses criminal history information for applicants in different ways for different groups, based on applicants’ race or national origin.

Two years ago, World Wide Technology began conducting criminal background checks on new employees who oversee buying and selling equipment - the first time it required this check in the company’s 23-year history.

Now, the St. Louis-area systems integration firm, which employs more than 2,000 people, is mulling making criminal background checks a requirement for all new employees.

“That will be the next step, because of our growth and increased visibility and liability” said Paul Koetting, World Wide Technology’s director of human resources. “We’re always trying to protect the company from all angles. When we were a smaller company, it wasn’t as important. When you get bigger, you can become a target.”

The St. Louis Zoo, which employs up to 800 people in the busy summer months, made drug testing mandatory three years ago for all seasonal, part-time and full-time employees.

“We want to know as much as we can about new employees,” said Dustin Deschamp, the zoo’s HR director. “It is becoming almost industry standard to perform background checks and drug testing because of the liability issues you’re facing.”

David Minton, president and CEO of Clayton, Mo.-based Heartland Bank, said the bank, which employs 300 people, has used background checks and drug tests on all new hires for at least six years.

“We’re obviously handling one of customers’ most important possessions, their money,” he said. “We want to make sure that we do that with employees of the highest caliber.”

But even with the information the background checks and drug tests can offer, Minton said employers should also rely on other factors to make their hiring decisions.

“There’s no substitute for checking references,” he said.

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