How to Avoid The 30% Cost of Hiring the Wrong Person

What some companies may not realize is the hidden costs of not conducting a thorough employment background check. According to one staffing agency the cost of hiring a candidate with a $40,000 annual salary is $14,000-roughly 30 percent of the salary on recruiting activities! Multiply this by the number of bad hires a company makes! This does not include the possible damages by poor performance of an employee. The hidden dangers of hiring a “bad employee” can also lead to liability issues such as sexual harassment complaints.

One of the best ways to protect your company and employees is by practicing “due diligence”. “Due diligence” is performed when a company has taken reasonable steps to assure the safety of the company and employees. By using an agency your company maintains neutrality and consistency in standards of hiring employees. Take the right step and hire a background search firm!

Shocking as it may seem about 47% of all applicants knowingly falsify their resumes or applications! Approximately 1/3 of all employees regularly steal from their employers! In retail, internal theft causes 85% more shortage than shoplifting! Between 1971 and 1988, internal theft increased from $16 billion to over $200 billion! Twenty percent of all business failures are caused by internal theft!

Additionally, approximately 17% of processed background checks have a charge and or conviction related to violence. Some applicants will deliberately withhold conviction information to hide past criminal activity and or a violent past. Employers can be held liable for employees who commit acts of violence while at work, especially if the employer failed to check their past.

One of the main reasons a company may not use a background check agency is cost related. The managers at those companies feel the cost is not justified. They may also feel that this is a duty that should be performed by the Human Resources department. Unfortunately, the reality is that most employers do not have the time and in-house resources to conduct a thorough background search; let alone a criminal background search. And even if they could, most firms do not staff an attorney specializing in employment law.

Lawsuits involving negligent hiring and negligent retention practices are at an all time high and can affect your business. Would you want a convicted thief running your accounting department or operating a register at your store? More and more, courts are deciding that certain negative facts in a person’s past should disqualify them from given positions. So if that employee convicted of theft causes a loss to one of your customers (embezzlement or credit card fraud), then YOU may be held responsible!! You can be liable because you “should have known!” The bottom line is, if you hire someone based solely on their resume and their word, you are at risk for encountering these and many more problems.

A background search firm will not make arbitrary decisions on what information to disclose to you. Instead they will provide all information that is available and allowable under the law. Their role is to help you find the best candidate based on his or her background as suited for the position. They have special access to current and updated personal and criminal records. When you hire an agency to conduct a background search you will receive expert knowledge on current laws as they apply to background searches.

The best way to reduce the costs of a bad hire is take steps to prevent hiring a “bad employee” in the first place. And as we all know, it is often much more costly to fix a mistake than to prevent it!

Sabrina S. Siracusa invites you to check out to get her free, informative newsletter Loose Ink directly in your inbox. It contains great tips on helping you increase your business through creative and persuasive content on your website! Make sure to check it out today.

Source: Sabrina S. Siracusa –


Filed Under: HR


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