The cost associated with hiring a new employee can be quite substantial. Think about the processes involved and the expenses for recruiting, training, benefits and pay. Now think about hiring someone that you did not do a background check on. The expense of the new hire may have been costly, but imagine what the expense will be of a negligent hire and the lawsuit to follow. Not a pretty picture.
Benefits of Screening
The statistics below illustrate the value of conducting background checks on all potential and existing employees:
- The US Department of Labor claims that “the average bad hire‟ that leaves a company within six months costs the company approximately $40,000 in severance pay, training, wasted human resource time, possible search firm fees, loss of productivity and impact on employee morale.
- Considering hiring, training, productivity loss and vacancy, some estimate the cost of turnover at about 150% of annual salary. (Source: Saratoga Institute)
- 34% of all forms contain outright lies about experience, education and ability to perform essential functions to the job. (Source: Wall Street Journal)
- 30% of all business failures are caused by employee theft or embezzlement. (Source: American Management Association and US Chamber of Commerce)
- Employers lose over 70% of negligent hiring cases with an average settlement of over $1.6MM. (Liability Consultants, Inc.)
- 10% of all job applicants have a criminal history. (Screening Index, 2009.)
Lie on your resume? Who Me
Case Studies of Negligent Hiring
The following sites may assist in your pre-employment screening: