employment background check

The cost of passing up on employment background screening

employment background screeningRecruiting prospective employees is not an easy process. Companies need to know which prospective employees they can trust for specific positions and jobs.

Incorrectly recruiting candidates results in serious consequences for a company—both financially and non-financially. One potential consequence that can arise, among others, is fraudulent behavior, such as corrupt and fraudulent acts, data theft, and general criminal acts in the workplace.

According to one media outlet, 41% of companies with poor hiring have incurred losses of at least $25,000. In fact, a quarter of these companies claim losses of up to $50,000!

Pros and cons of reporting employees who commit fraud

The losses suffered by companies are continually increasing because not all cases of fraud are reported to law enforcement. As many as 4 out of 10 cases of fraud are not reported.

Several reasons underlie companies’ decisions to not report fraud:

  • The company believes that these crimes can be overcome by internal disciplinary actions, although sometimes it does not have a deterrent effect.
  • The company considers that the problem can be solved with the perpetrator merely paying compensation.
  • Worries that the issue will damage the company’s reputation.

With employee fraud going unreported, it is possible the perpetrator will commit a similar act in their new workplace. This is certainly a challenge in itself for recruiters to avoid hiring employees who have caused trouble in other companies into their organizations.

The disadvantages of not doing a candidate background check

In addition to material losses due to fraud committed by employees, there are several other losses that could potentially arise as a result of recruiting employees without conducting a pre-employment background screening.

1. Material losses beyond the potential for fraud.

It is clear that material losses can arise as a result of fraudulent acts committed by employees. However, they can also be caused by salaries expense, training, recruitment process costs, employee benefits, tax burdens, and so on.

2. Negative effect on the team.

Teamwork requires individuals who support each other. If one individual does not perform well or is even toxic, it will affect the performance of the team as a whole. These influences can be in the form of a decreased work ethic, moral barriers, decreased morale, disciplinary cases, to the influence of conflicting ideologies.

3. Wasting time.

All of the work time used to look for candidates, conduct recruitment, interviews, and other recruitment processes is wasted if you find problematic employee candidates.

4. Impact on company image.

Another disadvantage that is no less significant due to bad hiring is its impact on the good name of the company. In addition to the potential for fraud committed by employees on behalf of the company, the company’s image can also decrease due to high employee turnover caused by improper recruitment.

The importance of employment background screening

Thus, it is important for companies to invest time and money to conduct pre-employment background screening effectively and comprehensively. Pre employment background screening is basically a background verification process for prospective employees.

The background screening process itself is quite challenging. First, this process takes a lot of time. Second, competence is required to conduct verification. For example, recruiters need the competence to ensure the authenticity of a diploma and other educational documents. Third, sensitive data, such as criminal records, can only be accessed by authorized parties.

Thus, to obtain accurate, comprehensive, and objective results, it is recommended that companies work with experienced and trusted third parties.

Integrity Asia has been trusted by our clients from various business backgrounds for more than two decades to carry out employment background screening and provide comprehensive analytical reports through Prisma, a one-stop employment screening application that makes the employment background screening process for your company’s recruiters faster, more precise, and comprehensive.

By having all candidate information at hand, your company will be better equipped to make the right hiring decisions. For more detailed information on employment background screening and other compliance services, contact us today.


Photo by Arno Senoner on Unsplash