If human capital is an organization’s greatest asset, it can also be its greatest liability. Ask Enron shareholders, Tyco investors, or members of the Catholic Church.

None of these institutional calamities occurred due to a natural disaster, a political upheaval, or a radical change in technology. Instead, they are amazing examples of how the people they trusted to take them to new heights turned out to be their undoing. Consider your own organization; What policies and procedures are in place to ensure that your recruit-to-hire program is in fact building human capital assets? If background checks are not part of your process, consider:

o The reported percentage of applicants who include false information on a resume varies by source, but is in the double digits
o There are hundreds of online sources openly selling fake diplomas, degrees, and other educational certifications; or provide “Professional References” for a fee.
o On average, about 11% of the workforce has a criminal record
o According to the Workplace Violence Research Institute, negligent hiring costs American businesses more than $18 billion a year.

A strong hiring program that includes a well-balanced background check will help minimize turnover and liability exposure. If your background check consists of a few calls to the names and numbers your applicant provided, your organization is misinformed and at risk. And oddly enough, if you’re running a full range of searches on each final candidate, you may be creating liability rather than reducing it. Here are some general considerations.

Do you need a background check policy? Tragic events, financial losses, and the litigious nature of our business climate have made background checks a part of our work culture. At this point, it is wise to have a written background check policy, with details to be adhered to in the hiring process.

Who do you check? The best case scenario includes a check on all new hires, temps, and contractors. However, this does not mean that your company should absorb the cost of the entire campaign. It is perfectly acceptable for employers to require temp agencies and other providers they employ to provide staff who have been screened. Internally, if employee groups or employment levels are excluded, the value proposition of your policy is diminished and may lose some of its integrity. This will be highlighted in court by the lawyer of the candidate or employee who feels harmed by his selective policy. It is best to include all employees and conduct background checks that are appropriate for the position.

Most background check providers will create different search packages to meet your requirements. However, if your policy includes different degrees of selection, it is critical to keep your controls consistent within job categories or levels. Keep this in mind if you promote from within. If a candidate for a vacant position is a current employee, the background check that was performed for their current position may not be sufficient. Make sure an up-to-date background check is done and that you meet the parameters of the new position. Many organizations are also adopting a policy to update criminal background checks as part of their employee review process. There is no need to reconfirm previous education or employment; but a background check update is a prudent and proactive step in maintaining an effective background screening program.

What searches should be included? This is up to your discretion, although there are some guidelines that may help. The background check must be relevant to the position and thorough, without being unreasonable. There’s not much difficulty in deciding that a criminal record search should be done across the board: how else would you know if someone is posing a danger to your co-workers and clients? However, running a credit check on a machinist is probably unnecessary and can be seen as intrusive, as you create liability when you try to minimize it. Confirmation of previous employment applies to all applicants, but education verification probably isn’t necessary for someone hired to pick fruit. Find the balance for each position and work with your background check company to develop the necessary search packages.

Searches conducted as part of the background check will be based in part on information provided by the applicant or employee, but this should not be the sole source. Each check must include an address history/social security number trace to confirm the applicant’s residency history, and the criminal record search must be based on those results. If the Address History report matches what the candidate provided, great; if not, ask why. The criminal history search should include, at a minimum, county court searches (some states also refer to this as district court) because it involves an investigator obtaining records directly from the source of the record: the court. Many screening companies offer “statewide” or “countrywide” criminal history searches, and while these searches have value, a few items should be noted. These are database searches, not brief searches. Statewide databases are often based on Department of Corrections data (often no record if not incarcerated) or county conviction data, although not all counties participate. Even state-run CORI systems are often heavily filtered, sometimes to the point where a record of a convicted felon who served time will not be identified. The value of these searches lies in their coverage of a large geographic area; and are best used to augment county court searches. So-called “Nationwide” searches are really misleading: they don’t include every state, so they can’t be called nationally, and they’re subject to the same database deficiencies as statewide criminal searches.

Driver’s license records are important for positions such as sales, deliveries, and any other position where an employee drives during work hours. Professional licenses must be verified in any profession that requires a license, and education verifications must be run for positions that require a diploma or degree. Regarding references, and use yourself as an example; Have you ever provided a future employer with the name of a reference who wouldn’t give a glowing resume? Dates of employment, title, salary, etc., can be obtained from Human Resources; To get a real sense of performance, you should talk to a former supervisor or co-worker.

As an HR professional, part of your role is to identify the skills and value a person brings to your organization. Of equal importance is your responsibility to create and maintain a safe, secure and productive work environment. And while no single policy or procedure addresses these tasks completely, a comprehensive background check program is one component that will help keep your human capital in the asset class.