By Thomas Ahearn, ESR News Blog
A recently published new study on employment background screening has found that organizations using automated tools for background checking, employment and education verification, and reference checking experienced 60 percent better quality of hire compared to those without employment background screening solutions in place.
The new report from Aberdeen Group, a Harte-Hanks Company – “Employment Screening: Mitigating Risk, Driving Down Cost” (September 2010) – is based on over 400 survey respondents to Aberdeen’s 2010 Talent Acquisition Strategies study and looks at the components of employment background screening that are most widely used and how these components impact hiring performance.
The report found that employment background screening is fundamental to best-in-class performance. When asked what kinds of technology they currently used as part of their talent acquisition process, over three-quarters (78 percent) of survey respondents cited the use of employment background screening solutions. The report also found that companies using employment background screening were 43 percent more likely to achieve “Best-in-Class” companies, which Aberdeen Group defines as the top 20 percent of performers along the following categories:
- First year retention of hires.
- Percentage of new-hires that were the top-choice candidate.
- Average year-over-year decrease in time-to-fill vacant positions.
Overall, the research revealed that among Best-in-Class companies the most utilized employment screening technology was employment background screening, with 83 percent using employment screening such as background checks and drug testing.
As for the most common aspects and elements of an employment background screening solution, the Aberdeen Group found that out of all of the survey respondents:
- 88 percent performed domestic criminal background checks.
- 87 percent performed previous employment/education verification.
- 72 percent performed reference checking.
- 60 percent performed drug screening.
The use of employment background screening has shown an impact on overall quality of hire, with an increase of 7 percent year-over-year for organizations using employment background screening as compared to a 5 percent average increase among those that did not use employment background screening.
The need for criminal background checks and employment and education verifications is key when it comes to risk inherent in hiring, the Aberdeen Group survey found, since even seemingly ideal candidates may have issues unearthed via background checks that make them undesirable for hiring and prospective employees may be included to stretch the truth about their educational backgrounds or previous employment in the current ultra-competitive job market.
The Aberdeen Group survey also shows these two employment background screening elements – criminal background checks and employment/education verifications – are even more important in the financial services, healthcare, and public sector environments:
- Financial services: 93 percent performed criminal background checks and 97 percent performed employment/education verifications.
- Healthcare: 94 percent performed criminal background checks and 94 percent performed employment/education verifications.
- Public sector: 100 percent performed criminal background checks and 83 percent performed employment/education verifications.
Lastly, when it comes to selecting a partner for providing employment background screening, the Aberdeen Group survey found that the speed with which the process was completed (62 percent of respondents) and the accuracy of the results (54 percent of respondents) were far and away the top criteria.