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Lies, Deceit and Fraud in Human Resources

Numbers! Statistics! Charts! Graphs! Sometimes the cold hard facts say it best. The statistics below describe, in further detail, the kinds of workplace risks HireSafe's background checking services will help you to manage proactively:

Fraudulent Resumes

  • 9% of job applicants falsely claimed they had a college degree, listed false employers, or identified jobs that didn't exist.
    *Source: Resume Inflation: Two Wrongs May Mean No Rights, by Barbara Kat Repa, Nolo.com, 
  • 34% of all application forms contain outright lies about experience, education, and ability to perform essential functions on the job.
    *Source: Wall Street Journal
  • 11% of job applicants misrepresented why they left a former employer.
    *Source: Resume Inflation: Two Wrongs May Mean No Rights, by Barbara Kat Repa, Nolo.com, 
  • Nearly one-third of job applicants listed dates of employment that were inaccurate by more than three months.
    *Source: Resume Inflation: Two Wrongs May Mean No Rights, by Barbara Kat Repa, Nolo.com,
  • As many as 30% of job-seekers exaggerate their accomplishments, and about 10% "seriously misrepresent" their background.
    *Source: The Complete Reference Checking Book, by Edward C. Adler

Workplace Violence

  • On-the-job violence costs employers $36 billion each year.
    *Source: Workplace Violence Research Institute
  • The average award in a workplace violence lawsuit exceeds $1 million per case.
    *Source: Workplace Violence Research Institute
  • Workplace violence is the foremost concern of corporate security directors at Fortune 1000 companies. Other top concerns include employee selection and screening concerns, fraud and white-collar crime, theft, drugs and alcohol in the workplace, and unethical business practices.
    *Source: Pinkerton, Top Security Threats, Year 2000 Survey
  • In May of 1999, an estimated 16,400 threats were made, 723 workers were attacked and 43,800 were harassed every work day.
    *Source: The Workplace Violence Research Institute
  • 57% of respondents reported that a violent incident occurred in their workplace between 1/95 and 7/99.
    *Source: Society of Human Resource Management, Workplace Violence Study, 1999

                

There are two kinds of lies...Lies and Damn Lies." Samuel L. Clemens


Substance Abuse at Work

  • One in six workers has a drug problem.
    *Source: Don't Hire A Crook, Dennis DeMay and James R. Flowers Jr., 1999 Facts on Demand Press, pg. 90
  • 87% of major US firms now test employees, job applicants, or both, for drug use.
    * Source: Don't Hire A Crook, Dennis DeMay and James R. Flowers Jr., 1999 Facts on Demand Press, pg. 90

Employee Theft and Embezzlement

  • 30% of all business failures are caused by employee theft.
    *Source: American Management Association and US Chamber of Commerce
  • 14.7% of all applicants admit to theft of merchandise from an employer.
    *Source: Reid Psychological Systems (Don't Hire a Crook, Dennis DeMay; James R. Flowers, Jr., 1999 Facts on Demand Press, pg. 88)
  • 4.4% of all applicants admit to theft of cash from an employer.
    *Source: Reid Psychological Systems (Don't Hire a Crook, Dennis DeMay; James R. Flowers, Jr., 1999 Facts on Demand Press, pg. 88)
  • 33% of all applicants admit to being tempted to steal from an employer.
    *Source: Security Magazine, 3/97

The Effect of Poor-Quality Hires

  • It costs $7,000 to replace a salaried employee, $10,000 to replace a mid-level employee, and $40,000 to replace a senior executive.
    *Source: Recruiting Times
  • In 1999, employers lost 60% of negligent hiring/supervision jury trials.
    *Source: The Reish & Luftman Practical Guide to Employment Law
  • On average, in U.S. businesses, at least half of all new hires "don't work out."
    *Source: Fortune, 2/00


And then...there's Negligent Hiring

Employers nationwide have become responsible for large monetary judgments where the employers have been found guilty of Negligent Hiring. If an employee cause’s harm to another employee or your client, and the employer knows or should have known that the individual was a risk--the courts have found the companies liable--and can require the company to pay thousands, hundreds of thousands, or even millions to the plaintiff.

The liability is known as Negligent Hiring or Negligent Retention, and the best protection from such a lawsuit is for the employer to have completed all "reasonable" activities to identify "foreseeable conduct" before making a hiring commitment. This is commonly known as performing “due diligence.”

Each employer has a duty to make an adequate and "reasonable" determination of an applicant's fitness prior to hiring. A vendor such as HireSafe becomes, in the eyes of the government, a "Consumer Reporting Agency" and the employers agent. This third-party relationship allows the vendor to perform due diligence on behalf of the employer.

If you are sued for negligent hiring liability, the first question your attorney will probably ask is "Did you do a background check?"

If the employer breaches his duty, that employer may be held liable for Negligent Hiring. The duty is breached when the employer hires an employee it knew, or in the exercise of reasonable care should have known, was incompetent or unfit for the work assigned. "Incompetence" means the employee possessed certain personal or physical characterizations which created an unreasonable risk to third parties. The notion of risk creation implies the injury producing conduct of the employee was predictable. If you are sued for negligent hiring liability, the first question your attorney will probably ask is "Did you do a background check?"

A well documented and effective research program of an applicant, together with policies that eliminate applicants that the research reveals are "incompetent" can help employers avoid liability in Negligent Hiring cases.
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