Companies Losing Candidates From Poor Background Checks

Nearly one in six HR managers rate their background-check candidate experience as fair or poor. A new report from CareerBuilder takes a look at strategies to help optimize the background-check process for candidates.

August 11, 2017 – Background checks are designed to validate candidate resumes and protect employers from negligent hiring risks, but employers should make sure they are not losing candidates because of a poor background-check experience.

According to a recent CareerBuilder survey, more than a third of employers (38 percent) have seen candidates turn down a job because they had a negative experience with their background check. Yet, fewer than half of the HR managers who conduct background checks (44 percent) have tested their background – check experience themselves.

When employers do road test their process, they find a less-than-ideal candidate experience, with around one in six (14 percent) rating their experience as fair or poor.

The national survey, conducted online by Harris Poll on behalf of CareerBuilder, included representative samples of 2,369 full-time employers, including 221 HR managers, and 3,462 full-time U.S. workers across industries and company sizes in the private sector.

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“Employers are aware that conducting background checks is an important business process, but few invest time to evaluate the candidate experience, ease of use, simplicity and impact on the hiring process,” said Ben Goldberg, CEO of Aurico, CareerBuilder’s background checking business unit. “The longer the background-check process, the higher risk of losing a quality candidate to another employer. Employers should test their application and background-check process and ensure candidates have a positive experience.”

A Reflection on the Business

A negative experience with a company’s HR technology (such as a job application or background-check process) can affect a candidate’s opinion of the company overall. Fifty-six percent of candidates think less of a company if they have a poor experience with its HR technology, and eight percent of those who have accepted a job offer and then withdrew did so because a background check took too long or they had a negative experience with the background check or drug check.

A poorly conducted background check is among the most common reasons employers lose candidates who have accepted job offers: Twenty-one percent of employers who have lost candidates that have accepted a job offer said it was because background screening took too long, and 20 percent said it was because a candidate had a poor experience with background screening.

Mr. Goldberg recommended several strategies to help optimize the background-check process:

  • Partner with the best. Make sure your provider keeps up with compliance standards, is National Association of Professional Background Screeners accredited and provides timely communication and support to candidates.
  • Check the clock. The longer the background check, the higher the risk of losing the candidate to someone else. Typically, background checks should return in less than five business days, but on average take 24 to 72 business hours to complete.
  • Test the candidate experience. Employers should experience the process firsthand to make sure it is easy and straightforward. It is also important to seek direct feedback from candidates.

Workforce Summer Fling Could Set Up Race for Workers This Fall
U.S. employees are more willing than ever to test their options. According to one recent report, 25 percent of workers might be heading to greener pastures this summer. That is likely to set up a fall scramble to find new workers.

Lack of Available Talent

A company’s workforce is clearly its most valuable asset. The largest expense on any employer’s balance sheet is headcount, and investing in employees and their skills are critical to an organization’s success. Smart employers are acting ahead of time to ensure they have the most highly skilled and productive workforce to ensure their organization is prepared for whatever business challenges are coming.

According to the “Definitive Guide” report by Adecco, nearly half (48 percent) of best-in-class companies are already increasing training in critical skill areas to help combat the skills gap. Employees likely want to fill any holes in their skill-sets, but cost can be prohibitive; such programs can be expensive. But for companies, the initial investment in alternative training programs may pay lasting dividends, especially where global competition is concerned, said Adecco.

Governments, businesses and employees can learn a lot from what the U.S. economy and workforce went through during the last recession. What is certain is that American workers will show resilience in the face of a daunting labor market, said Adecco. By applying that same resilience, innovation and reinvention to the current skills gap challenge, the report concluded, the American workforce will undoubtedly evolve to meet the needs of the new global economy.

A significant part of the challenge will be balancing the development of soft and hard skills; both will be required to effectively navigate and tackle new industries, technologies and global competitors. And while these are the same dynamics responsible for widening the skills gap, the report said, they will also help connect the American workforce and economy to a greater success and prosperity.

U.S. Job Growth Continues Through Summer
Employers added 209,000 jobs last month as the U.S. unemployment rate fell slightly, to 4.3 percent, according to the most recent U.S. Bureau of Labor Statistics report. During the month, the number of workers unemployed remained at seven million.

Skills Gap Costing Employers

According to a separate CareerBuilder survey, nearly 60 percent of U.S. employers have job openings that stay vacant for 12 weeks or longer. The average cost HR managers said they incur for having extended job vacancies is more than $800,000 annually.

“The gap between the number of jobs posted each month and the number of people hired is growing larger as employers struggle to find candidates to fill positions at all levels within their organizations,” said Matt Ferguson, CEO of CareerBuilder. “There’s a significant supply and demand imbalance in the marketplace, and it’s becoming nearly a million dollar problem for companies.”

Calculating the impact of this problem on either the economy as a whole or individual employers is difficult, but unfilled positions come at a steep cost. When the right talent can’t be found, lost profit and revenue can be as high as $23,000 per unfilled position, according to the U.S. Chamber of Commerce Foundation.

While strong job growth is a good sign for the U.S. economy overall, it presents certain challenges for employers and HR professionals. According to the iCIMS “U.S. Hiring Trends” report, employers are struggling to attract suitable candidates. Jobs are becoming harder to fill, requiring more time and money to hire best-fit talent.

The report suggested that employers having difficulty filling positions with qualified candidates should invest in their talent pipelines by fostering relationships with passive candidates and interns, as well as by developing an effective employee referral program. Medium and large businesses, apparently recognizing the value of an internship program, have been able to convert interns into full time hires. Not surprisingly, small businesses struggle here.

“Technology is advancing rapidly, transforming the workplace and how employees engage with employers,” said iCIMS chief economist, Josh Wright. “These rapid changes are evident in debates about skills gap in the labor force and the impact these have on the labor market. Employers across all industries and company sizes need to examine their operations and search for opportunities to nurture their own pools of talent.”

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor – Hunt Scanlon Media

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