Hiring Mistakes Cost Companies

A recent survey by Occupational Health and Safety outlines the trouble hiring mistakes can afford small to mid size companies. Three out of four employers say they've hired one employee they wish they hadn't. Twelve percent of those respondents say that hiring mistake alone cost them about $10,000!

"The businesses we talk to say they are seeing more individuals lying on their résumés or exaggerating their skill sets in order to get scarce jobs. In a down economy, small business owners must be especially vigilant when they bring on new employees," says SurePayroll President Michael Alter.

Most mistakes are being made by negligent or poor hiring decisions. Skipping crucial steps along the way during the hiring process cost these business big:

• "We hired an employee without doing a background check, and then I caught her stealing."
• "We rely mainly on a strong 'gut feeling' to determine if the candidate seems qualified and references check out."
• "Our hiring errors have been largely due to time constraints--we needed to fill a position fast and quickly chose what appeared to be the best applicant from resumes received."

"For small business owners, the psychological and economic strain of making a hiring mistake can be a massive burden on the company," Alter says. "What's more, these kinds of hiring mistakes can be reduced or avoided altogether by implementing proper precautionary measures. Investing in pre-employment screening services is worth the small upfront investment."

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Highlight on Healthcare Background Checks: Avoid Negligent Hiring Suits

The best protection against negligent hiring lawsuits is a policy of due diligence on each applicant that approaches your company. The healthcare industry is particularly vulnerable to negligent hiring lawsuits because they are held liable for any illegal act conducted by their employees. Managers and supervisors can even be held personally responsible for the acts of those they manage and supervise.

If an individual in a healthcare facility is injured physically or financially by the criminal, violent, or negligent acts of an employee they may legally pursue a negligent hiring lawsuit against the employer. Punitive damages from such a lawsuit can range well into a six-figure settlement. Negligent hiring suits that are successful demonstrate:

• An employment relationship existed at the time of injury
  
• As a result of the relationship, the employee and the injured party met
  
• Both parties had a right to be where they were at the time of injury
  
• The employee was unfit or incompetent and posed a reasonable risk to the public
  
• The employer knew or should have known the employee was unfit
  
• The employee caused injury
  
• The employer’s negligence in hiring was the proximate cause of injury
  

 

Utilizing background checks is one way to prevent negligent hiring from happening in the first place. A recent survey by SHRM (the Society for Human Resource Management) indicates that 53% of job applications contained false information and 10% conceal criminal history.

At minimum, conducting a criminal background
check in all counties in which an applicant has lived for at least the last seven years. Verifying licensure, employment and education are extremely valuable in the wake of public reports of education fraud on resumes.

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