The Case for Background Checks

Ten years ago in this market, it was not common for companies to require drug tests and background checks. Today, 95 percent of employers require background checks, partially due to the workplace theft, violence and negligent hiring litigation. There are other “softer” factors in play: negative effects on morale and performance; the loss of reputation; and the damage done to an employment brand when poor candidates are hired. These factors do come into play in the competitions for recruiting and retaining A players.

They Should Be Part of Your Hiring Process

Typically, you can find a service to perform the related tasks for less than $100 per candidate depending on the level of background check and whether it is multistate or national.

How to do it legally

Overall process - Take into account these steps: 1) a candidate has to sign off on the fact that you will be doing this check; 2) interview the candidate; 3) extend the job offer first to avoid discrimination and state, “As a condition of employment you must agree to run a background check”;  4) Have a policy and procedure; and  5)  if there is a contrary decision, the candidate/employee has to be notified.

Background Checks – The Equal Employment Opportunity Commission (EEOC) has ruled that refusing to hire individuals based on criminal convictions disproportionately excludes applicants of certain minority groups. If an applicant has a record of a conviction, the EEOC urges employers to consider the nature and seriousness of the offense, the relationship of the offense to the job and the length of time that has passed since conviction or incarceration.

Credit Checks – Effective Oct. 1, 2013, the State of Nevada is implementing limitations to employers conducting credit checks on employees or applicants. “Employers may not directly or indirectly obtain a consumer credit report or other credit information from an applicant or employee as a condition of employment. Employers are further restricted from using, accepting, referring to or inquiring about a credit report or credit information.” There are exceptions: required/authorized under state or federal law; the employer reasonably believes employee/applicant engaged in specific activity that may constitute a violation of state or federal law; or if the credit report is reasonably related to the position.

How to use the information for employment decisions

A background check is a starting point, one of many things that should be factored into a hire. There is always a black, white and grey line. That grey line may not only be giving someone a second chance, but may also turn out to be one of the best hires you will ever make.

Written by Jim Annis, President/CEO of The Applied Companies, which provide HR solutions for today’s workplace. Celeste Johnson, Tom Miller, and Suzanne Chennault, Applied’s division directors, contributed to this article. 

January 2014 HR Brain Teaser

Brain Teaser Courtesy of EPLI Pro™

What Should You Do?

Your best employee, Mary, walks into your office on Monday and announces that she has made the best New Year’s Resolution of all time. Curiosity gets the best of you and you ask, “What is it?” Mary smiles from ear to ear and makes the following announcement, “This year I have resolved to be nice to even the worst of the worst people!” You reply, with a smile, “Sounds great!”

Mary starts walking towards you and places her hand on your shoulder. There is something about the way she is looking at you that makes you worried. Mary begins to speak and your fears are confirmed. Mary begins to tell you, her supervisor, are the worst of the worst. For what seems like forever, Mary tells you all the things you have ever done wrong as her supervisor and as a human being in general. As you listen your blood begins to boil. You can hardly believe what you are hearing!

When Mary finally finishes her monologue, she turns to leave the room.

You should do the following:

A. Pick up your pencil and throw it at her head.

B. Discipline her for being rude.

C. Talk to someone in HR and figure out whether Mary can be fired  -  or at
     least find out what can be done. 

D. Yell back at Mary and tell her all the things she has done wrong.

Answer: C     Hopefully everyone got this one correct! What Mary did was rude and probably not the best career move, but you are a supervisor and you should not respond with anger or pencil throwing violence! Speak with someone in HR and explain what happened and ask for advice. Maybe Mary raised some valid concerns that you should address. Or, maybe Mary is just simply rude and needs to be counseled by HR on how to interact with others at work. In either case, do the right thing and keep your emotions in control.

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Divisions of The Applied Companies
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Hiring Trends

It’s a new year. Forget the day-to-day for a minute. Take your best guess at what the next two to five years will look like. The Applied Companies considers the experts at ITR Economics when making decisions. For 60 years, ITR has been offering its clients a look at the future with a 94.7 percent forecast accuracy rate – plus they provide specific, actionable strategies for capitalizing on cyclical opportunities and dodging economic danger. According to ITR, as a country, we are definitely past the recovery stage. We will have a slight dip in the economy in 2014 as the Affordable Care Act (ACA) begins to impact the economy, which will show signs of weakness as people will start paying the taxes as a result of pay or play. Subsequently, they suggest that we will have years of significant continuous growth until 2018 – 2020. Here are some thing to consider.

 Consider the Leading Indicators

 In addition to the following, identify the leading indicators in your business and your particular industry.

  • Housing Starts
  • Corporate Bond Prices
  • Conference Board Leading Indicator
  • Purchasing Managers Index
  • Consumer Expectations
  • Chicago Fed National Activity Index
  • ITR Leading Indicator (10 major benchmarks of macro activity)
  • US Total Industrial Production Forecast
  • Employment
  • Retail Sales
  • Wholesale Trade Durable Goods
  • Wholesale Trade Nondurable Goods
  • Business-to-Business Activity  (Non-Defense Capital Goods New Orders)


How You Will Approach the Growth Years

If you are not taking care of your employees, they will be gone. We are already seeing stiff competition for A players. When the economy really gets cranking between now and 2018, bank on your key people being seduced by rich benefit plans and perks, unless you offer as attractive a package. Remember the things that were taken away from employees when the economy was bad? If they have not been reinstated, readdressed or replaced, those employees will seek it elsewhere.

What It All Means

If you have not defined and refined your company’s HR structure, culture, and corporate social responsibility efforts, or have less than stellar leadership, now is the time to fix those issues. Do it before another company that has defined themselves and their “sales pitch” to potential employees starts to woo your best. Positions that were high in demand years ago may not be now. People receiving unemployment benefits limited at 99 weeks has already started diminishing as they maxed out and start to fall off the rolls. The unemployment rate is not a true indicator of the heavy bidding for top employees now and in the next few years.

Written by Jim Annis President/CEO of The Applied Companies, which provide HR solutions for today’s workplace. Celeste Johnson, Tom Miller, and Suzanne Chennault, Applied’s division directors, contributed to this article.