Background checking on candidates before an employment offer or as a staff, but before confirmation. Which do you do?

Thursday, 2015/01/15

I have been in paid employment before and I have also worked as a consultant to companies in various parts of the world. The common practice as much as my experience tells is that companies hire their candidates based on first trust with respect to the content of their resumes; but then go ahead to verify the information. In essence, what I see most often is companies hire a candidate and subject their confirmation as a staff on the outcome of any background checks performed. This works; no doubt albeit, it could be more expensive. It may end up being costly to the company and indeed the candidate.

As much as I know again, there are very few instances whereby a candidate is interviewed today and asked to start work the next day; what happens more often is the provision of a notice period for candidates currently in employment or a small window; perhaps a week before the candidate could resume. I wonder why companies don’t perform background checks during this small window; before the candidate steps foot into the company rather than wait through a confirmation period, which is normally three to six months?

At ETX-NG, we performed “pre-confirmation checks” on over 5,000 employees last year with about 70% of these coming from the financial services industry (understandably so) and found qualification irregularities in about 800 employees. Besides this high number, all of these instances, as much as I know resulted in termination of the employment, with each employee spending an average of four months down the line. What this means is that the companies affected have had to pay salaries, taxes and pensions for four months only to realise the lack of integrity from the candidate – this sounds wasteful to me, because I doubt if any employee would generate so much value in a new workplace within four months.
Background checks are risk-mitigating controls – they don’t fully cover the risk, but can reduce it to a level that is acceptable to most companies if properly implemented especially when done before the employment even takes place. There is an argument to it though…background checks costs money. It’s that simple.

The companies I’ve had a chat with ask why would they spend money checking a candidate who they may not hire. This is true and valid; but lets look at this scenario….

Most companies I know streamline their recruitment selection to the two best candidates for a position and then end up offering just one. Lets assume this position pays $1,500 per month, which is about the average salary of the companies that are best suited to our services in Nigeria. Our complete background checks costs $500 per candidate. Based on my argued approach, I would ask the company to pay $500 to check the preferred option and only extend an offer if the primary checks (qualification, previous employment and guarantor) come back clean. This saves the company $6,000 ($1,500 x 4month) in salary plus the $500 which they would still pay to perform a pre confirmation check.

The downsides to pre-confirmation checks outweigh those of pre-employment offer checks. I urge companies to place background checking within the recruitment process rather than within the staff management process.

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