Outsourcing Pre-Employment Checks – Is This Suitable For Your Business?
Pre-employment checks — In 2018, the NSW Independent Commission Against Corruption (ICAC) conducted research that discovered that between 20 and 30 per cent of job applications contained some form of false information. The report states that “the detrimental effects that poor employment screening practices have can be very wide-reaching”.
“Furthermore, the ICAC recommends that employment screening should not just be a one-off element of the initial recruitment process, but should also be applied during the course of the individual’s tenure in the organisation, for example, if an individual is to be promoted to a higher position.”
Meanwhile, many businesses are looking to hire new candidates and sometimes experience retention issues. They realise that they need a more thorough approach to pre-employment checks.
HR teams are also balancing between meeting all of their usual obligations while interviewing potential candidates, shortlisting applicants and running background checks.
They’re stretched thin.
While businesses understand it’s critical to ensure that they get the hiring right to avoid delaying projects further, the sad truth is that this juggling act is the reality many businesses face when it comes to recruitment.
So, is it a wise choice to conduct pre-employment checks in-house, or do you look to outsource this instead?
We’ll go through the advantages and disadvantages of outsourcing pre-employment checks so that you can make the right decision with your hiring process.
Disadvantages of Outsourcing Pre-Employment Checks
Potentially More Costly
More often than not, outsourcing your pre-employment checks can cost more than conducting this in-house if you had the right HR person in place.
Such services usually incorporate the screening agency’s running costs and mark-ups.
Businesses that are either cash-strapped, only undertake occasional or small scale recruitment or aren’t under as much pressure with time and resource constraints will most likely benefit in conducting pre-employment checks in-house.
Speed and Timing
For employment screening agencies who use their resources wisely this may not be an issue but, should they poorly handle their inbound work, there can be delays in receiving the findings of the screening.
However, this may not entirely be the fault of screening agencies. Candidates may lack a sense of urgency towards screening agencies’ pre-employment check requests vs. hiring employers due to a lack of rapport or understanding of the business drivers. This can often delay how quickly pre-employment checks are conducted.
Level of Pre-Employment Checks May Be Excessive
It’s highly recommended to have a baseline level of pre-employment checks for all recruitment efforts. However, depending on the nature of the role, more comprehensive screening may or may not be necessary. Its important to have a risk based approach to your employment categories.
Having a clear understanding of the risks and what pre-employment screening measures need to be in place will help with ensuring that you’re not performing extensive pre-employment checking where it’s deemed arbitrary.
Advantages of Outsourcing Pre-Employment Checks
No Conflict of Interest
Using a screening agency offers independence in the screening process. Hiring choices can be inadvertently affected if the interviewer completes the employment screening. Ultimately, screening agencies don’t make recommendations on hiring, they objectively report on findings which are not influenced by emotional or personal factors.
Recruiting and pre-employment checks is a time-consuming process that requires dedicated resources to ensure the best decisions are being made. Outsourcing provides the benefit of freeing up HR staff to focus on other critical business needs while still maintaining a thorough pre-employment screening standard.
Basic pre-employment checks can be conducted in-house. However, hiring for important and high-risk roles (such as C-suite, security/police and health care) means that you’ll want to use the latest screening methods. Given that the majority of screening agencies specialise in only pre-employment checks, you can be confident that they have experience in thoroughly identifying and checking all aspects of a prospect across a large sample size and database.
Screening companies utilise the latest technology to improve the accuracy and efficiency of candidate checking – technology that may be too expensive to invest in for businesses who don’t hire frequently who are unable to meet specific criteria of government or other agencies..
Employers looking to conduct pre-employment screening should be aware that they are subject to legal and regulatory requirements. In 2012, the Australian Privacy Principles were introduced to set out the rights and obligations of collecting and using private, confidential information. Employers must understand that the practice of pre-employment checks may expose them to discrimination complaints if the request or requirements are not reasonable in the context of the position they are hiring for.
Advising candidates that pre-employment checks are being taken care of by an external screening company often provides reassurance and projects a more professional image for the business.
Scalable & Accurate
Start-up businesses or businesses experiencing a high-growth stage requiring hiring in large volumes need to screen with precision and accuracy. Rather than hiring HR team members internally to cope with the growth, outsourcing pre-employment checks to a screening agency can ensure that your results are accurate and delivered in a reasonable timeframe to make more efficient hiring decisions.
In addition, having an ongoing and reliable relationship with a screening agency who understands your requirements will improve your hiring processes and outcomes.
As regulatory changes are enforced in law, handling of personal data during pre-employment checks becomes more complex.
Using a screening company will reduce the chances of legal missteps as well as provides another layer of legal protection.
Improved Hiring Quality
A recent study found that it costs businesses on average close to $10,000 to hire a new entry-level employee, and hiring a new executive can potentially cost over $34,000.
In addition to the cost, filtering candidates that don’t fit within your hiring standards and employment screening framework on the merit of integrity and character, when detected early, can significantly reduce risk and employee turnover for a business.
Using a screening agency for pre-employment assessments such as aptitude tests, psychometric assessments, background checks, and other comprehensive measures can significantly improve hiring quality and outcomes.
Other Considerations for Outsourcing Pre-Employment Checks
Are you a business that operates in a high risk sector? Pre-employment checks may be required for roles dealing with vulnerable people, sensitive information or intellectual property. Risk management becomes a significant priority in specific industries that would benefit significantly in outsourcing pre-employment screening expertise to a reputable screening company.
Size of Business
As mentioned previously, businesses that are at an early or high-growth stage will have limited resources to dedicate to HR. Outsourcing pre-employment checks will mean that these businesses can scale their efforts while maintaining the quality required to find the best candidates.
Many small to medium businesses often don’t possess a core focus or competency in recruitment and therefore, dedicate limited resources towards recruitment efforts. Outsourcing to screening agencies can maximise hiring quality while not over-extending resources into recruitment.
Ultimately, conducting pre-employment checks in-house or with an outsourced third party screening company both have different merits and much is highly dependent on the business’ needs and the HR resources they have available.
Ask yourself some critical questions – is your business looking to hire a large number of roles? Does your company have the right HR resources to dedicate towards this process? Does your business have the expertise in-house to conduct the most suitable pre-employment screening checks?
Outsourcing pre-employment checks can provide a robust solution for businesses looking for a reliable and accurate solution. It’s highly recommended you review and understand all of the advantages and disadvantages above to assess the suitability of engaging in a screening company.
VerifyNow specialises in helping businesses streamline its pre-employment screening service. We provide one of the most comprehensive screening services in Australia to help you make the best decision for your next hire. To find out how we can help you with your next hiring process, get in touch with us today.