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How Much Should You Be Spending On Background Screening?

Posted on 7/6/11 9:30 AM

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Hiring a new associate costs every company monetarily from the moment you accept an application. Most companies have a multi-step process when it comes to interviews and usually, the higher the position within the company, the more steps involved in both the interview and hiring process.

background screeningThe same holds true for many companies when it comes to background screening. Store Managers, District Managers and higher positions normally require more background screening and most companies seem to have the right formula in place when it comes to properly screening these positions.

The question most companies face is usually, “how much time and money should be spent on lower level hiring such as Key Holders, Sales Associates, Stock Associates, and Cashiers?   While there is no one “right” answer to this question, there are several ways to determine the formula best suited for your company.

With a multitude of checks that can be performed on a potential associate, the first step is knowing what types of checks into a person’s background, skill level, personality, etc are available. A few of the most common checks include;

  • Retail Theft Databases

  • Criminal Background Screening

  • Financial & Credit Checks

  • Personality and Aptitude Testing

Let’s explore these common background checks in some detail.

Retail Theft Databases: There are “subscription databases” in the industry which house information pertaining to employees and customers who have committed and admitted to acts of theft, whether they are internal or external apprehensions. Often, a person who is caught stealing may not be prosecuted by a company, perhaps due to dollar amount, company policy, etc. Because they were not prosecuted, a standard criminal background screen would not show any wrongdoing. These databases are unique from standard criminal background checks as they report individuals who may have been apprehended, legally signed an admission, but may not have been prosecuted for a dishonest act against a retail company.

Considered a mutual association, access to these databases requires membership and support in order to join. If you provide data to support the database you may also run checks against the database. A benefit to belonging to a retail theft database is that the cost is much lower than a background screen and can be a good first check for potential new hires or to reduce the applicant pool in making a final determination.

Article: 4 reasons to use a Retail Theft Database for background screening

Criminal Background Checks: Criminal background checks can be very beneficial in determining if an associate or potential associate has been arrested and/or prosecuted for any criminal activity.  With a variety of criminal checks available through most screening companies, several factors should be considered when planning to conduct this type of background check.>

  • Should the background be run pre or post hire?  The cost of running pre-hire criminal checks are higher due to the number of screens; however it may be the right option for certain level positions. Post-hire criminal screens may be more prudent for lower level positions.

  • How deep should your criminal checks be? Background screening can be completed nationally, state-wide, multi-state, multi-county, felony, misdemeanors, etc. To determine the best screen to conduct, look at your employee base and your hiring practices. If you relocate personnel, take on transient help or see many employees working outside their county of residence, then perhaps multi-county or multi-state is ideal. Are you concerned about all criminal activity or only certain incidents?

A good rule of thumb is to always have the ability (and authorization from the employee) to run criminal background screening post-hire. This will allow you to be able to add additional screening in the event something has occurred and may affect the associate’s ability to work safely in your company.

Article: When a National Criminal Database isn't a National Criminal Database

Financial & Credit Checks: These checks may not be necessary for all associates; however, they are often deemed a crucial check in positions handling money such as book keepers as well as higher level management such as Store Managers.  One question you have to ask is “do the financial checks make sense for your company to run on all cash handlers, including cashiers?”

If the risk of large cash losses is higher in your environment, then it would be best to know the financial history of all those handling the cash. Again, look to have the ability to run these checks post-hire, as financial situations change in every individual’s life.

Personality and Aptitude Testing: These tests vary depending on how customized you wish to be within your environment and your specific needs. Due to the detailed specifics of this testing and most often the cost, this testing is usually used for higher sales related positions (commission, strong sales oriented environments). If sales and service are high on your list of a candidate’s skill set, then the benefit will often outweigh the costs.

While none of these checks alone guarantee the financial health or success of a company, they can often contribute to making sound hiring decisions.  With the “right” people in place, your company can prosper, reduce shrink, reduce expenses, and increase the bottom line.


Authored by:

Shannon Hill, LPI   Shannon Hill, National Client Services Manager

   Shannon HIll Linkedin

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