August 26th, 2015 | Sterling
Background Checks Boast More Value Than You Might Think
Background checks are a valuable piece of the hiring process, but exactly how much are they worth to your organization? You might be surprised to find out that the value of a background screening program for a company with 1,950 annual new hires is nearly $3.6 million. SterlingBackcheck’s white paper on How to Calculate Your ROI on Background Screening shows you how to calculate the value of your organization’s screening program.
Think of Background Checks as an Investment, Not an Expense
Employers often consider background checks a hiring cost, but what if we told you that you’ve been looking at it the wrong way? Background checks return significant value, much more than the initial cost of conducting them. The value is somewhat intangible so it can be hard to quantify, but that doesn’t mean it doesn’t exist.
VALUE FACTOR #1: INTERNAL FRAUD & THEFT PREVENTION
Occupational fraud and theft affects companies of all sizes in all industries. From using company supplies and equipment for personal purposes to more complex cases of asset misappropriation, fraud costs organizations trillions of dollars worldwide every year. Thorough background checks help prevent you from hiring candidates who have been convicted of theft or caught with their hand in the cookie jar at a previous job.
VALUE FACTOR #2: REDUCED EMPLOYEE TURNOVER
You spend significant time and money to recruit the best talent, onboard them, and provide necessary training. So it can feel like a bad break-up when they leave a short time after being hired. Then there’s the cost – the off-boarding process, finding and training a suitable replacement, and loss of productivity. These costs add up and are estimated at 100% to 250% of an employee’s annual salary plus benefits. One of the most valuable, reported benefits of background checks is the reduction in employee turnover. Background checks help employers determine whether or not a candidate is qualified, what their track record with past employers looks like, and if the individual will be a good fit for the organization.
VALUE FACTOR #3: WORKPLACE VIOLENCE PREVENTION
Violence in the workplace is nothing new. In fact, according to the U.S. Department of Justice’s National Crime Victimization Survey (NCVS), there were approximately 572,000 non-fatal violent crimes committed against workers in 2009. The impact on victims of workplace violence is often incalculable and there are also major financial implications for the employer. Between legal expenses, absenteeism, and general damage control, the costs can quickly become extraordinary. Criminal record checks are useful for identifying violent criminal behaviour and reference checks can be used to detect any confrontations that have occurred at past workplaces.
What’s the Value of Your Background Screening Program?
Industry averages are nice. They give you a ballpark figure without actually having to do the math, but sometimes it helps to know exactly how the information applies to your organization. Whether you are trying to sell the idea to your boss or you’re just curious if background checks really are as valuable as everyone claims, SterlingBackcheck’s white paper on How to Calculate Your ROI on Background Screening guides you through the process of conducting your own calculation.
This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.