The average American cost per hire is estimated to be in the thousands of dollars. Because of this, some human resource departments might have the temptation to cut out some of the costs associated with conducting thorough executive background checks. Then, they might hear news of yet another corporate embezzlement charge and change their minds.
Every company conducts employee screening in their own way whether it be for making a decision on an entry level applicant or upper management candidate. However, executive background checks as well as the exploration of any employee regardless of experience level typically include these five elements:
- Financial History Evaluations
By 2010, more than half of all employees already conducted credit checks on employees. This trend is likely to continue because many employers realize a person under financial pressure might not make money-related decisions that are in a company’s best interest. This could be a detriment to otherwise well-deserving, honest employees who wouldn’t steal but maybe would not comprehend a corporation’s business model enough to implement the right financial strategies to move a company toward its revenue goals.
Credit checks, however, can determine who would use executive bank accounts responsibly based on how timely a person is with making payments and how well they budget money and prioritize expenses. Credit checks could also identify likelihood of theft if a person has ever falsified their identity to make purchases or has overdrawn multiple times to the point of facing criminal charges.
- Criminal Investigations
As of 2007, about 86 percent of companies conducted criminal background checks on employees. This has continued to be a standard practice — which had tightened during the recession when jobs were scarce — because of the value that HR has discovered in digging deeper into a person’s past.
A criminal conviction, by the way, does not automatically disqualify an employee. However, hiring a CEO, vice president, treasurer or other person who would assume more responsibility than an entry level employee usually requires making sure a person having this much power over a company will not abuse the position. Money laundering or drug charges may be some top concerns for hiring managers as well as any history of violence or sexual harassment.
- Social Media Screening
Many people do not realize the impact that social media has concerning the hiring process. However, almost a third of companies as early as 2009 already set policies in place concerning what workers can post on their personal blogs. For instance, many companies forbid gripes about the company and certain confidential processes an employee might not like. Any negative comments on social media at all even ones not work-related could possibly hurt a candidate’s career potential and block them from securing executive positions.
- Personality Tests
Many employees including some applying for executive positions find some of the multiple choice tests they have to take during a job interview ridiculous. They may not realize the purpose behind these questionnaires that seem to ask the same questions over and over again.
Corporate Resolutions states that many of these tests are designed to determine how an employment applicant would respond in certain scenarios, as an arm of an executive background investigation. Oftentimes, these tests are simply to get to know the person and predict how that individual would fit in with a team. This prepares a company for a variety of interaction possibilities from which they can choose the match that best suits them.
Some personality tests provide more than just prediction of interaction with other employees, however. They might delve into attitudes a job candidate might have that either could negatively or positively affect work performance. In addition, these tests might reveal signs of impatience or even show evidence of a violent temper.
- Reference Verification
The quest for information never seems complete without asking for references who can verify that a person is who he or she claims to be. This step taken further can reveal references of references to add a double layer of assurance of trustworthiness. Contacts provided by employment applicants might include co-workers, an old boss, a business partner or longtime friend.
The effort that a company puts into executive background checks varies. It sometimes depends on available time and funds for it, but the level of position responsibility typically determines how high of a priority this process is. On the other hand, many companies thoroughly check all hourly and salaried employee candidates.