Background Check a Wise Investment
The New Year is here, sunny and bright, bringing with it hope and aspirations for everyone. This is a good time to evaluate and see how 2013 can be efficient and productive. Hence, let’s start the year by evaluating the ‘Return of Investment’ on background checks. Background checks are beneficial for the company in many ways: it helps the company hire the right people for the job and retain the right employees. It also helps avoid having fraudulent employees in the company and avoid workplace violence due to drug/alcohol use etc.
On the other hand losing employees can be expensive for the company, especially losing ones who held high positions: the expense is three-fold, money, time and energy is lost in the process. The expenses will involve the cost of paying a recruiter or the internal HR to reevaluate the position and do the necessary advertising to attract new candidates. Once the news is out there, the next expense would be for the interviews conducted, time spent for training a new employee. A big parameter to consider is that of productivity loss, when there is not much work done between the time when the old employee quits and the new employee is trained. Then comes the time spent by supervisors and higher-paid employees for training the new comer and the low productivity of new sales staff when compared to experienced employees.
The estimated cost incurred for replacing an employee is 30-150% of an employee’s salary. The number has a wide range as it depends on the industry and number of employees. The Human Resource Management Report estimates that without proper background checks, the average liability of a bad hire is $3,111.18 whereas that of an employee hired after a detailed screening with the help of a professional agency is $299.97. Hence, $100 or less spend on a background screening can reduce your liability to $2,800/employee/annum.
Thus if you prefer saving money for your company and retaining good employees, make sure that the recruiting process is complemented by an effective background screening conducted by a reputed agency that adheres to proper guidelines.
Disclaimer (Source: HRM report)
- An average liability of $3,111.18 per hire (Total liability / Total annual hires) before design and implementation of a quality screening program
- The average liability is reduced to a cost of $299.97 per hire (Program cost / Total annual hires) by developing and implementing a strategic background screening program with the help of a highly qualified provider