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and law firms who require information on pre-employment screening,
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March, 2004 Vol. 4, No. 3


1. New SHRM Survey Shows Employment Screening on the Rise

2. Yearly Hiring Index Demonstrates Why Employment Screening is Increasing

3. Privacy-The Inherent Problem in Sending Personal Data Abroad

4. ESR Featured in Nationwide Conferences on Safe Hiring and Due Diligence

1. New SHRM Survey Shows
Employment Screening on the Rise

A study released by the Society for Human
Resources Management (SHRM), revealed a significant increase in the number of
employers that conduct pre-employment screening. The findings were part of a study published in 2004 publication
entitled Workplace Violence Survey.

According to the study, 82%
of the respondents indicated they conducted some degree of screening on
potential employees in 2003. This was up from 66% in the 1996 survey.

Reference checks (80%), past
criminal checks (80%) and work history (79%) were the most widely used tools by
those employers surveyed. The remaining tools were verification of education
records (55%), motor vehicle records (44%), credit checks (35%), and military
discharge information (21%). The survey also broke down the use of screening
tools by the size of firms. Large firms
with 500 or more employees were more likely to check education than small
firms. Overall, the larger the firm,
the more comprehensive a pre-employment investigation seems to be.

The two screening tools that
had the largest increase in usage were criminal records (80% in 2003 compared to
51% in 1996) and credit reports (35% in 2003 compared to 19% in 1996).

Although the number of
respondents was not large, the statistics do reflect HR and security trends,
post 9/11, where a dramatic increase in employment screening has occurred. Each
of these tools has their pros and cons. Credit reports, for example, should be
approached with caution to ensure they are used fairly and do not invade
privacy. See the Special ESR report on
Credit Reports and Job Hunting at

A copy of the full survey is
available online at the

2. Yearly Hiring Index Demonstrates Why Employment
Screening is Increasing

The reason for the
increase in employment screening and safe hiring is demonstrated by a yearly
hiring index showing the degree of fraud, discrepancies or criminal records
found in background screening. For example, ADP, a large national
provider of employer services, releases a yearly survey and according to their
2003 Sixth Annual survey, 10 percent, or approximately 300,000 records,
contained an area of concern or data inconsistency. The 2003 Hiring Index
showed that among records checked:

  • 5%
    had a criminal record in the last seven years
  • 44%
    had a driving record with one or more violations or convictions
  • 24%
    had credit records showing a judgment, lien or bankruptcy, or had been
    turned over to a collection agency
  • 9%
    had a previous workers’ compensation claim
  • 51%
    of employment, education and/or credential reference checks revealed a
    difference of information between what the applicant provided and the
    source reported
  • 8%
    of the information differences were received with negative remarks from
    the source in regard to the applicant

The study can be found at:

3. Privacy-The Inherent Problem in Sending Personal
Data Abroad

An increasing issue for Americans is the
trend by US firms to send personal and private identifiable data abroad to call
centers and data centers to take advantage of low-cost foreign labor. Privacy advocates are concerned that US
firms are sending all sorts of records offshore beyond the reach of US privacy
laws, such as medical records, social security numbers and credit card numbers.

Legislation is underway in California to protect the
privacy of US citizens. A bill has been
introduced in California to require that any firm that sends confidential data
out of the US must disclose to consumers that their personal information is
being shared overseas. Another bill
would put an outright ban on any work involving California consumers’ data sent
overseas. In Washington, D.C., Rep.
Edward Markey (D-Mass.) is involved in an effort to make regulatory agencies
take action to protect privacy rights
form being harmed by overseas outsourcing of data.

supports these efforts to protect privacy. According to the ESR privacy policy:

“All information about consumers stays within the United Sates in order
to be under the protection of US Privacy laws. The only exception is
information that is necessary to conduct international searches, for those
employers who have received permission from applicants to access information
about employment, education, credentials or criminal records outside of the
United States. In those situations only the data needed to obtain the
information leaves the United States.”

4. ESR Featured
in Nationwide HR Conferences on Safe Hiring and Due Diligence

ESR will be featured in national conferences
involving safe hiring, as well as two audio conferences sponsored by
prestigious national publishers.

September 2, 2004–Long Beach, CA —“Safe
Hiring Audit-Implementing and Measuring Due Diligence.”
2004 Professionals in Human Resources Association (PIHRA) Annual
Conference. (see

May 19, 2004–Sacramento, CA ” How to
Avoid the Nightmare of a Bad Hire.
” American Society of
Safety Engineers (ASSE).

May 18, 2004–San Rafael, CA “Ten Safe Hiring
Tools Employees Can Use Today and Cost Nothing
.” Marin HR

May 6, 2004– -National Audio Conference sponsored by BNA– “Criminal
Records Use: What the HR Professional Must Know To Avoid Bad Hires and Legal
Expert panel including ESR president Lester S.
Rosen. Time: 2:00 to 3:15 EST. Additional details to be posted

April 20-21, 2004-Washington, D.C. SHRM 35th
Annual Employment Management Association (EMA) Conference and Exposition.
Topic: “Safe Hiring Audit-Implementing and Measuring
Due Diligence in Your Hiring.”

April 13, 2004–Houston, TX ” How to
Avoid Hiring Criminals and Problem Employees.”
Gulf Coast
Symposium. See

April 6, 2004–Oakland, CA–Privacy in the
Seminar sponsored by Lorman Seminars (Details

March 23, 2004-San Jose, CA-“Identify Theft:
How Individuals and Businesses Can Protect Against Fraud and New Legal
Obligations on Employers.”
San Jose EAC (breakfast

March 18, 2004-National Audio Conference sponsored by Stafford
Publications– ” The Fair Credit Reporting Act: Recent
Expert panel including ESR president Lester S.
Rosen: Time: 1:00 to 2:30 EST. See:

March 16, 2004– Pleasanton, CA ” Dodging
the Bullet–Keeping Criminals and Imposters Out of Your Workplace in Ten Easy
.” TriValley Human Resources Association(TVHRA) (noon

Contact ESR for further

Please feel free to contact Jared Callahan of ESR at 415-898-0044 or
href=”mailto:[email protected]”>[email protected]
if you
have any questions or comments about the matters in this newsletter. Please
note that ESR’s statements about any legal matters are not
given or intended as legal advice.

Screening Resources (ESR)

Grant Avenue, Suite 7

Novato, CA 94945


Employment Screening
Resources (ESR
Rated Top Background Screening Firm in First Independent Industry Study

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