October 2018

by Adam Kneisley, SESCO Management Consultants

A company is only as good as its employees. In an increasingly competitive business environment, it is perhaps more important than ever for employers to exercise prudence and caution in hiring and maintaining their workforce. Background checks and drug testing have become important parts of the hiring process. Failing to conduct background checks and drug testing during the hiring process can be a costly mistake for an employer of any size.

Background Checks

Matching the right person with the right position is rarely easy. It’s a little bit of an art and a science, and even candidates with sterling resumes and references aren’t immune from not working out as planned. There are countless reasons why an individual hire might go haywire. Without requiring applicants to undergo a rigorous background check, companies are almost hiring on faith, because they assume everything a prospective employee claims is accurate. That’s a huge assumption to make and one that can have disastrous consequences.

Background checks should be a part of every employer’s recruiting and hiring process. The checks can range from consulting with references to checking criminal records. If your employees have contact with the public or financial transactions, you should be particularly thorough about your background checks.

A background check is a critical form of risk management for the hiring process. Background checks are an important, cost-effective way for employers to reduce turnover, improve productivity, and reduce legal liability. Conducting background checks provides critical information and demonstrates the employer’s due diligence in hiring and retention.

Employers have a duty to provide a safe workplace. Background checks can help keep the workplace safe. In fact, background checks show that the employer has exercised reasonable care and made a diligent search. Legal liability is among the leading reasons to perform background checks. Conducting background checks shows due diligence and helps protect the employer from liability. Screening applicants for signs of past unacceptable activity and behavior makes the workplace more secure.

Submission of past work history may only show starting and ending dates and duties performed. The employer needs to know more about events between those dates, including actions and activities that could cause issues. The employer has a duty to provide a safe workplace; today this means a place free of violence, threats, harassment, and other unacceptable behavior. Background checks search for information and indications of problems that become causes for terminations: criminal activity related to dishonesty and alcohol or drugs as well as other information.

The costs of a negligent hiring suit to an employer can be severe and long-lasting. Conducting background checks can reduce liability, but even more important, it can reduce the risks of harm to the employer’s business, employees, customers, or any other party. The primary goal is to make good hires and retain skilled, productive and experienced employees. While to be successful in a negligent hiring suit the aggrieved party must show the employer had actual or constructive knowledge of the employee’s unfitness, failing to conduct a background check has been held to amount to the employer having constructive knowledge of such unfitness.

The old adage that an ounce of prevention is worth a pound of cure applies to background checks. Prevention is far less expensive than fixing a bad hire. The cost of a professional background check is a small fraction of the costs associated with an unwanted termination, particularly a fault-based termination that a background check might have prevented. Cost estimates of unwanted terminations range from part of the annual salary to twice the annual pay for skilled positions in high-demand fields.

Drug Testing

Although many aspects of society are harmed by illicit drug use and prescription drug abuse, it is especially detrimental in the workplace. Not only can it lower the productivity and revenue of a company, but it can also place employees at risk. According to the National Drug-Free Workplace Alliance, 75 percent of the 17.5 million illicit drug users 18 and over are currently employed. It is recommended that all employers conduct drug testing, and implement strategies to pursue drug-free workplaces.

Drug use can impair a person’s judgment and increase safety risks. This is especially concerning in certain industries, such as construction, in which using drugs at work could cause an injury or even a fatality. Employee drug use causes as approximately 50 percent of all on-the-job accidents. Employers are charged with ensuring that employees that perform safety-sensitive or dangerous jobs, like driving vehicles or operating machinery, are performing their job functions in a safe way.

Employees under the influence of drugs may struggle to stay on task, letting their minds drift toward problems that aren’t related to their work. Drug testing allows employers to target those employees who aren’t reaching their full potential due to drug use. In so doing, employers will improve their company’s overall performance.

Substance abuse or addiction can lead to missed deadlines and decreased attendance. Dwindling productivity will result in lower profits as well. Drug addiction causes up to 40 percent of employee theft, an additional drain on profits.

Pre-employment drug testing is a great way to find employees who fit your company’s goals and standards. In addition, it reduces the likelihood that you will have to fire a new employee, allowing you to retain valuable workers and decrease your turnover rate.

In some states, workplace drug testing allows employers to decrease their worker’s compensation insurance rates, as well as other costs by reducing on-the-job accidents and drug-related illnesses.

SESCO offers a variety of services related to employers conducting background checks and drug testing. These services may be customized to meet your organization need and budget. Contact a SESCO consultant today to explore the opportunities for your organization.

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