I recently read an article published on the Telegraph’s website about companies failing to crack down on graduate CV fraud. As many as one in three firms are simply not bothering to request proof of educational achievement. This really got me thinking, why in todays increasingly interconnected and digital world, do so many companies fail to screen candidates? I think the answer to this question is rooted in the general recruitment approach adopted by a company.
In an ideal world every candidate that reached the job offer stage would undergo a background check. Depending on the role an employee screening programme could cover some or all of the following background checks:
- Criminal record checks
- Reference checks
- employment verification
- credit enquiries
- educational verification
- DVLA checks
Conducting these background checks can be a time consuming and costly business. For this reason (and sometimes just pure incompetence) these background checks are often disregarded. But this is a gamble. Failure to perform even the most basic of checks like contacting a reference can have disastrous consequences. Instead of a small cost and inconvenience, you might be left with an expensive and embarrassing hiring disaster.
So why do many companies still side-step the employee screening process? It’s my belief that a company’s initial staffing strategy decision has the greatest bearing on the likelihood of adequate candidate screening taking place.
Incentives and time
A company’s decision to screen a potential candidate is a question of time and incentive. If a good enough incentive exists than a company, individual or agent will perform a background check, but only if they have the time to allocate to that activity. Each recruitment approach comes with its own incentives and time restraints which ultimately affect the propensity to undergo employee background checks.
Recruitment approaches and employee background checking
Recruitment approaches vary from company to company. At large companies recruitment is often undertaken by an in-house HR professional or HR department. Alternatively companies may choose to outsource recruitment to an agency; this is the preferred option of many large and mid-sized businesses. Typically in the smallest organisations recruitment is left to line managers and company directors.
Each approach brings with it its own set of motivations and incentives to perform background checks and also its own resource constraints which can impact the ability to perform adequate candidate screening.
Human Resource professionals
Incentive-highTime – high
Let’s begin with in-house HR professionals and departments. Out of all the recruitment solutions HR professionals have the highest incentive to perform employee background screening. Staffing is one of the main functions of the role and a bad hire can severely damage a HR professionals reputation and progression opportunities. The HR department will also have to deal directly with the aftermath of a bad hire, insufficient background checking really is making a rod for one’s own back.
The time that in-house HR professionals have to perform background checks should be high, in fact candidate screening is probably in most HR professional’s job descriptions.
Incentive – low Time – low
I’m going to go out on a limb here, the vast majority of Recruitment agencies lack the proper incentives to perform adequate background checking on candidates. A large amount of a Recruitment consultant’s remuneration is based on placing people in jobs; this is a time intensive process. The opportunity cost of performing candidate screening is high because the benefits that would have been received through canvassing to win new business and find candidates must be forgone.
The commission structure at an agency will also have an impact on whether background checks are performed. Agencies that offer their consultants commission as a percentage of fee might be susceptible to biases in employee background checking. If you are a consultant working on two placements – you are likely to put the most time and effort into the placement which offers the higher commission.
As for time, this is a scarce commodity for most agencies given the high levels of competition to win business. Put simply, Employee background checking isn’t one of the core competences of Recruitment agencies.
In-House (non HR professionals)
Incentive – high Time – low
We’ve covered in-house HR and external recruitment agencies, now it’s time to turn our attention to the recruitment approach employed by most SME’s – The in-house (non-HR) approach. Normally in smaller organisations recruitment falls under the remit of company Directors and line Managers.
The incentive to perform background screening on candidates and new employees could hardly be higher. When you’re a small company every penny counts, and a botched hiring decision will have a tremendous impact on the company’s bottom line.
So why do small businesses often forgo candidate background checks? Well the chances are if you’re a line manager or company director in a small firm then you’re wearing many hats; with other commitments taking precedence, screening candidates is often overlooked.
It’s a real catch 22 situation for companies in this position, the incentive to screen candidates is high but time and resource restraints simply do not allow the necessary level of due diligence.
The take-home message
So what’s the take home message of this article? It might appear as though I have a pro- HR department agenda, or that I’m dismissing Recruitment agencies out of hand. Truthfully I believe neither of these things. There are many agencies out there that screen each and every candidate they put forward, and they do it incredibly well. Similarly there are large HR departments that simply will not give candidate screening the attention it deserves.
The intention of this article is to address some of the fundamental reasons that explain why candidate screening is often overlooked. If you believe that candidate screening is paramount to your staffing strategy then it can help to ask this simple question: With our current approach to recruitment, do the incentives and resources exist to make candidate screening a priority?
Connie Barrow is Operations Director of Armchair Group.