Some organizations conduct pre-employment
background checks as a contractual or regulatory obligation. Other corporations
judge pre-employment screening as a collateral expense. Executive leadership may
acknowledge their legal responsibility to mitigate risk, but they’re quick to
point out it represents a significant investment in time and money.
Any company can quickly start to question if
background screening is really worth it. How much actual dollar value does a
background screening program deliver?
- The typical organization loses 5% of revenue each year to fraud. It takes time and effort to recover the money stolen by perpetrators, and many organizations are never able to fully do so. 58% of victim organizations never recover any of their losses due to fraud, and only 14% make a full recovery.1
- The cost of replacing an experienced worker
who doesn’t work out can cost 50% or more of that individual’s salary, and
these costs go up if the employee has specialized skills.2
- Employers lose 72% of negligent hiring cases,
with an average settlement of $1.6 million.3
Traditionally, the Human Resources department has been primarily administrative, and HR experts have worked as employee advocates. HR’s role in today’s corporate supply chain has shifted significantly, moving away from providing services and support on a reactive basis, toward offering intrinsic value as a strategic business partner. Executive leaders have opened their eyes and minds to the importance HR plays in driving productivity and improving business performance.
