Background Screening 2006 In Review: Industry Numbers

Article Submitted by Commercial Investigations LLC

Michelle Pyan, President

According to the Society for Human Resource Management, over 80 percent of employers now conduct background screening.  By comparison only about half of employers ran background checks in 1996. 

Industry experts claim that employers lose negligent hiring suits 60 percent of the time and the average verdict award is $870,000. 

Background screening providers report criminal hit rates ranging from as low as 4 percent in the education industry to over 16 percent in the construction industry.  Overall industry wide, 8 to 10 percent of those screened have criminal record hits. Construction, automotive and retail are three industries with higher hit ratios for criminal records.

According to KPMG, industry statistics show that in 2006, 5 percent of total criminal record checks revealed a criminal record in the last seven years and 43 percent of total credit checks had a judgment, lien, bankruptcy or collections record.  Over the last 5 years, driving records with 4 plus violations have been stable at 5 percent.

The U.S. Department of Justice statistics still indicate that most crimes are committed a short distance from the criminal’s residence.  So, although a 7 year criminal history search based on residence is not perfect, it is still statistically effective.     

Discrepancies in education verifications were up from 2005 to as much as 20 percent.  Discrepancies related to disclosed past employment continues to increase and some screening companies report as much as 50 percent of employment verifications contain conflicting data.    

Drug testing related to employment purposes has been increasing but the percentage of positive results of those tested has continued to decrease.  According to The Background Investigator, “In 1988, 13.6 percent of those tested had a positive result for drugs, compared with 3.8 percent in 2006.”  There are several explanations for this beyond declining drug use.   In 1988, a higher percentage of those employers utilizing drug testing were in manufacturing.  As with criminal history, adverse results will vary depending on geography or industry.  Today with more companies in different industries performing drug testing, more types of candidates are screened. 

The majority of drug users are employed by small businesses.  Drug users have become accustomed to being tested and have migrated to those companies not testing—typically small businesses.  Also, more companies have instituted random and post-accident testing, which could also account for some of the decline.  The bottom line is that although the percentage of positive results has declined, the number of companies testing has risen.  Therefore, it’s important to test so that your company is not a targeted employer for drug users. 

Aside from drug testing, there appears to continue to be an upward trend in adverse reports.  There are several possible explanations for this.  More companies are performing screening and more companies are screening all employees, not just managers. 

The depth of screening continues to increase along with the number of inquiries per subject.  The scope of products offered in the industry continues to expand and provides a means for employers to hire the best possible employees for their organizations.  Contact CI to review your background screening policy and make sure you are hiring the best possible candidates.   

Commercial Investigations llc (CI), a full service licensed private investigative agency, offers thorough and affordable employment Background Investigations.  CI provides accurate, timely, cost effective and fully compliant reports supported by high standards of customer service.  CI also offers consulting services to assist organizations with reviewing and auditing their Background Investigations processes for compliance, effectiveness and efficiency.  CI provides the Proactive Truthtm regarding applicants, thereby reducing turnover and limiting exposure to civil liability. 

Article Submitted by Commercial Investigations LLC

Michelle Pyan, President

800-284-0906 / 518-271-7546

michellepyan@commercialinvestigationsllc.com