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Hiring the Wrong Person Can Prove Costly: Background Checks Pay Off

Companies pay a high price for hiring the wrong people. Not only do unscrupulous employees drain corporate coffers with kickback schemes and embezzlement, they also pose a significant liability threat.

An article published last year by the Society for Human Resource Management pointed to a case in Colorado where the state court ordered McDonald’s to pay a $210,000 damage award after a worker sexually assaulted a 3-year-old boy at McDonald’s restaurant.

“The employee had a history of sexually assaulting children, but McDonald’s had failed to check all of the employee’s references,” the article said.

A local seismic firm that almost hired Iron Thundershoe, a paroled rapist who after his release allegedly raped and strangled his wife, has been burned by dishonest employees more than once.

The company hired a young man who later turned out to be a prison escapee. He was hired for a clerk position and worked for the firm for about six months.

One day he just left–with four or five pages out of a company check book. He was never caught and the company never recovered the $30,000 in checks he wrote.

Another recent incident cost the firm about $11,000. An employee that came to the firm from a local temporary agency did such a good job she was asked to stay on permanently.

“We didn’t do background checks,” a manager with the company said. It later turned out the woman was a parole violator who had written bad checks. Before leaving the company, she made several unauthorized purchases.

The seismic company now has Kimmons Services Inc. conduct pre-employment background checks.

The cost averages between $70 to $250 depending on how extensive the investigation is.

“It’s expensive not to run these background checks,”a spokesman for the seismic company said.

Private investigator Edmund J. Pankau, owner of Houston-based Intertect Inc., said there are a number of simple background checks companies can do to protect themselves and their employees. Many of them are contained in a book he’s written, titled Check It Out

-The first place to start, particularly if the applicant will be in a position of dealing with the public, is to find out whether the person has any criminal convictions. “We just did 100 people for a major oil company and found that 17 of them had criminal records,” Pankau said.

-No matter what kind of job the person will be hired for, run background checks on the civil records to see if they have a history of previous workers’ compensation claims or injury suits.

-If the person will be close to money, run a credit report. If the applicant’s personal finances are in shambles, he or she might not be able to resist temptation.

-If the applicant will be driving a company vehicle, run background checks on the person’s driving record.

Do background checks for drug use. “People that test positive for drugs are six times as likely to steal” than a person who tests negative. Pankau said.

Rob Kimmons, a local private investigator and owner of Kimmons Services, Inc., said companies are slowly beginning to realize the benefits of pre-employment screening.

“One thing I think they’re realizing is the cost of training an employee who then doesn’t work out,” he said. “If they’re smart, I think they’ll spend a little money on the front end in hopes they’ll get the right person to begin with.”

Pankau agrees.

“A good person takes what you’ve done and enhances it. A bad person will destroy it,” he said. “So if you’re going to hire someone, have a person who can add to your business.”

By Cynthia Shanley, Houston Post Staff

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