Provided by ESR Newsletter and Legal Update.
The perennial challenge for employers is how to identify applicants that are the right fit and have the knowledge, skill, and abilities to do the job. In pre-industrial society, the problem was generally solved by either hiring someone that the employer knew, or basing the hiring decision upon a personal recommendation. Another method was using an apprenticeship-type program that gave an employer a great deal of insight into who they were hiring.
Although these approaches are still in use today, it is no longer possible to match millions of applicants and jobs based upon the employer having a pre-existing relationship with applicants. Additional approaches such as using the Internet to find good candidates have developed. Since every time an employer hires a stranger, it is somewhat of a "leap of faith," employers need tools to make good decisions. Employers are seeking ways to determine who the person really is and what the person has done in the past, as predictors of how they will perform. Although past is not always prolog, past performance says a great deal about how a person may be expected to perform in the future. Employers also want a means to "look under the hood" at applicants rather than just accepting them at face value.
Every hire represents a significant investment and - at the same time - a significant risk. A bad hire can result in a legal and financial nightmare. Bad hires cost an employer a great deal in terms of time wasted recruiting, hiring and training, and searching for a replacement, not to mention the job not being done. A bad hiring decision can also lead to litigation for negligent hiring, if the new employee turns out to be unfit, dishonest, or dangerous, and someone is harmed. To add insult to injury, when the bad hire is eventually terminated, employers need to deal with the possibility of a wrongful termination lawsuit even if the firing is entirely justified.
In order to evaluate the various hiring tools, it is essential to understand that the hiring process occurs on a time line. Each step of the continuum carries its own set of legal implications. Matching your hiring tools to the proper stage of the time line is key to sorting out the best applicants AND to helping prevent a bad hire.
Although these approaches are still in use today, it is no longer possible to match millions of applicants and jobs based upon the employer having a pre-existing relationship with applicants. Additional approaches such as using the Internet to find good candidates have developed. Since every time an employer hires a stranger, it is somewhat of a "leap of faith," employers need tools to make good decisions. Employers are seeking ways to determine who the person really is and what the person has done in the past, as predictors of how they will perform. Although past is not always prolog, past performance says a great deal about how a person may be expected to perform in the future. Employers also want a means to "look under the hood" at applicants rather than just accepting them at face value.
Every hire represents a significant investment and - at the same time - a significant risk. A bad hire can result in a legal and financial nightmare. Bad hires cost an employer a great deal in terms of time wasted recruiting, hiring and training, and searching for a replacement, not to mention the job not being done. A bad hiring decision can also lead to litigation for negligent hiring, if the new employee turns out to be unfit, dishonest, or dangerous, and someone is harmed. To add insult to injury, when the bad hire is eventually terminated, employers need to deal with the possibility of a wrongful termination lawsuit even if the firing is entirely justified.
In order to evaluate the various hiring tools, it is essential to understand that the hiring process occurs on a time line. Each step of the continuum carries its own set of legal implications. Matching your hiring tools to the proper stage of the time line is key to sorting out the best applicants AND to helping prevent a bad hire.
The stages and available tools of the hiring process can roughly be divided as follows:
1. Sourcing Stage: This is the process of gathering potential applicants through a variety of means that can include inbound applications from job boards, websites, newspapers, or outbound efforts, such as recruiters seeking passive candidates;
2. Preliminary Screening Stage: In order to narrow down the applicant pool, there is a preliminary screening primarily based upon the applicants' self-stated qualifications, conveyed by the resumes or applications or newer tools such as video websites;
3. Assessment Stage: This stage can include the interviewing process to further narrow down the field of candidates, as well as numerous other assessment tools, ranging from objective testing to references from past employers or supervisors, or various other testing methods;
4. Decision Process Stage: Here, the employer has narrowed the pool to one, two, or three finalists and is moving toward a conditional job offer based upon an internal decision-making process;
5. Background Checking Stage: At this point, either a conditional job offer has been made or is contemplated, and the employer needs to exercise due diligence, typically through a background screening firm, to determine if there is any reason NOT to hire the candidate. The emphasis of a background screening firm at this point is a factual verification of details such as job title and dates;
6. The Post Offer/Pre-Hire Stage: This is where an employer is able for the first time, if they so choose, to address such areas as pre-employment physicals;
7. The Post Hire/On-Boarding Stage: This is where an employer, for example, can complete the form I-9 process.
These seven stages illustrate a clear demarcation between efforts pointed at finding someone to hire, and efforts directed at deciding who NOT to hire. This is where evaluation of the pros and cons of the hiring tools comes into play. Background checks, for instance, are of little assistance in stages 1 through 5. That is because a traditional background check is only performed on finalists, where, by definition, an employer has already made a tentative decision to either hire or place that person in the group of finalists. Background checks are used to decide who NOT to hire.
Are there other tools available besides background checks for sorting through the pool of applicants? Yes. One of the most interesting new tools is for online automated reference checks and assessments. An example is the offering of Checkster, a company founded by a veteran in the talent management sector. Job candidates select references, such as former supervisors and co-workers, who then get an assessment request emailed to them. It's self-service. Eliminated are the time spent making phone calls and waiting for and tracking responses. The references simply fill out an email questionnaire. The questionnaire itself is a scientifically designed assessment instrument that gives a fresh look at the applicant and contains a number of state-of-the-art validation tools. The results are communicated back to a recruiter or hiring manager in a graphical and intuitive report. Although there are others competing in the same space, Checkster clearly has thought through and designed the process from both the assessment and talent management point of view.
The end result of using such a tool is that the reference can quickly respond to an email, and time is not wasted on playing phone tag or managing follow-ups. The employer obtains a candid assessment because the person giving the reference is advised that the actual scores are confidential. Through Checkster's processes, the email evaluations provide a scientific assessment of what is "under the candidate's hood," thus increasing the employer's odds of making a job offer to the best candidate.
The question has arisen from some hiring managers as to whether services like Checkster can replace the type of employment verifications performed by background firms. The short answer is no. Although services from Checkster and similar firms can be extremely valuable, they are done earlier in the time line of the hiring process. Background checks are done near the end of the time line. Traditional background checks and Checkster-type services can compliment each other, but they serve different purposes. They are different tools for different functions.
First, Checkster-type services occur in the talent sourcing and selection stages. Background checks, by comparison, occur only AFTER a tentative decision has been reached. In other words, Checkster-type services are used to decide who to focus on out of a pool of candidates, while a background check seeks to assist an employer in exercising due diligence by examining if there is any reason NOT to hire someone that an employer has potentially targeted for employment. Although a Checkster-type service will obviously also help to eliminate some candidates from consideration in the early stages based upon the results of the third-party reference and assessment provided to employers, there is a fundamental difference between an email-based reference service and the role of a background firm.
The whole idea behind due diligence as a legal defense is independent factual verification. For example, background firms do not take the applicant's word for whether the past employer even existed. A background firm will typically independently verify that the past employer existed as well as verify that the phone number is real, independent of what the applicant contends. Even if past references are contacted for evaluation purposes by email, the task of verifying the truthfulness and accuracy of the employment history still requires a screening firm to independently obtain information from past employers.
Another advantage to an employer utilizing traditional background checking techniques is that the employer has a powerful argument in front of a jury in the event of a lawsuit for negligent hiring that they excised due diligence. The background firm's efforts to manually verify the existence of a past employer, and then to verify that the applicant in fact worked there, is one of the most important and powerful due diligence tools in the employment process. By knowing where a person had been, an employer is able to eliminate any unexplained gaps in employment, and to also know where to search for potential criminal records. It is a well-known fact among due diligence professionals that verifying where a person has worked is just as important, and in some cases more important, than checking for criminal records. A criminal record can occasionally slip through the cracks, but an unexplained gap in employment creates a red flag that may prompt an employer to do further research.
If an employer is sued for negligent hiring, it is also questionable whether an employer can demonstrate due diligence if they let job seekers pick and choose which references were contacted. There is also the possibility of a fake or set-up reference, or an applicant creating a fake identity, and having the bogus ones "verified." Checkster certainly takes steps to minimize the possibility of fraud. However, in the final analysis, there is no substitute for the hard work of manual checks. By manually verifying the existence of past employers, and verifying dates of employment in order to reveal gaps in employment, an employer is taking the final due diligence steps needed before making a hiring decision final.
Employment verifications by a background firm are typically conducted in a call center environment in high volume by callers who are used to verifying factual information about an applicant's employment history. Given the highly sophisticated software and databases, as well as expertise that screening firms bring to the process of manual verification, a substantial number of such checks are completed within three working days.
The bottom-line is risk management. Although these email assessment tools are an excellent means of providing an in-depth assessment about a candidate during the decision-making stage, the traditional background check complements them for the final candidates and provides the demonstrable due diligence that can be used as a legal defense if there is a negligent hiring lawsuit and can help uncover fraud or fake references.
The bottom-line is risk management. Although these email assessment tools are an excellent means of providing an in-depth assessment about a candidate during the decision-making stage, the traditional background check complements them for the final candidates and provides the demonstrable due diligence that can be used as a legal defense if there is a negligent hiring lawsuit and can help uncover fraud or fake references.
