Always check 'em out first!

Editor's note:

Dave Wiggins is a speaker, trainer, and consultant on issues of management, sales, workplace innovation, and customer retention. He is the author of two books, including Time Management for Busy People: The Cash Course, Dave lives and works in Lakewood, Colorado, and can be reached at [phone]. The following article should not be construed as legal advice or as pertaining to specific factual situations.

Would you buy a car without examining it first? If you are a smart consumer, you never invest a nickel in any car without knowing the condition under the hood. It may shine beautifully on the outside and have a clean cab with comfortable seats, but appearances tell you nothing about the engine, transmission, brakes, etc. Employees are a little like cars: You do not know what you are getting until they have been checked-out.

Almost all companies are forced to hire people they simply do not know well. If a position stays open for long, most employers relax expectations and hire people with less-than-ideal qualifications. Of course, the alternative is not attractive. Having too few employees can lower service quality and lead to burn-out of the staff you have (including yourself). In extreme cases, a worker shortage can force you to reduce the hours you are open or even to turn away business. Indeed, to be persistently short-handed can be costly in many ways.

Yes, you may need employees, and for some firms the need may be acute. Nevertheless, there are some people your company should never employ under any circumstances! Just one bad employee can destroy a company. If you do not believe in the destructive power of one bad employee, look what happened to Exxon a few years ago.

When the oil tanker Valdez sank off the coast of Alaska, it spilled millions of gallons of crude oil into the ocean, killing millions of fish, fowl, and other wildlife. The entire economy along the southern coast of Alaska suffered, and the oil giant took a public relations beating. Exxon lost billions paying judgments, legal fees, cleanup costs, and higher insurance premiums. Almost a decade later, millions of environmentally conscious motorists still boycott the company's service stations. It is impossible to calculate the full cost of the Valdez catastrophe.

This real-life nightmare began with a single hiring mistake. The ship's captain was drunk at the time of the accident. Of course, no company can control the actions of every employee, but the captain of the Valdez had a recent conviction for driving a car while intoxicated. Obviously, Exxon should never have trusted this man to navigate an oil tanker.

By now, the lesson should be clear. The penalty for a hiring mistake is usually limited to sloppy work, inconvenience, and irritation. But in some cases, a bad hire will steal money, open your company to lawsuits, injure its reputation, drive away customers, and even endanger others. Hiring people always involves some guesswork, and you will sometimes make some mistakes. By taking a few precautions, however, you can reduce both the costs and the odds of hiring the wrong people.

First and foremost, check out every applicant thoroughly before you offer a job. Regardless of the position, you have both a right and a need to know a few facts about anyone you plan to hire. Check if the applicant has committed any crimes, look at credit and driving records, call references, and verify educational and professional claims. Here's why.

Driving Records

If an employee drives a company vehicle and causes an accident, your company may be sued for negligence if the driver has had two moving violations or one DUI conviction in the last five years. Running a business is hard enough, and you certainly do not need the hassle of a lawyer chasing a contingency fee. Also, drivers with many moving violations obviously have more accidents, and accidents drive up insurance premiums.

Even for applicants who will never drive a company vehicle, you still want to see their driving records. Millions of intelligent, decent people have a DUI conviction in their past. Any traffic court judge will tell you, however, that almost everyone with two or more DUIs has a serious problem with alcohol. For obvious reasons, alcoholics are high-risk employees.

Educational and Professional Qualifications

For several years a respected research hospital in Texas hired and employed several physicians who had never graduated from an accredited medical school. The shocked hospital administrators had not bothered to verify the backgrounds of these "doctors." The hospital is now facing several lawsuits.

"Be suspicious of what you read on a resume or an application. Although most people are honest, some will literally say anything to get the jobs they want. In one study of resumes and applications, 10 percent claimed false educational qualifications, and 30 percent made claims that were gross exaggerations or outright lies. Make sure you check out the claims people make about themselves.

Criminal Backgrounds

At least five percent of applications are from ex-convicts. Does the job you offer involve handling money or credit card numbers? Will the new hire have access to trade secrets or expensive equipment? A company that puts someone convicted of fraud or shoplifting in a position of trust courts disaster. A very high percentage of convicted thieves never reform.

Unfortunately, violence in the workplace has been increasing in recent years. You endanger yourself and others by hiring people with a history of violence or sexual assault.

Of course, use your own good judgement. We live in the "real world" and not everyone has a saintly past. For example, take a 32-year-old applicant with a solid work history and excellent qualifications. If that person had a conviction at age 19 for marijuana possession or vandalism, the odds are still high that this applicant would be a good addition to your company. (This assumes that there have been no recent brushes with the law.)

Credit Records

About half of all job applicants have a bad credit rating. This may not be a problem for many positions, but applicants with bad credit are twice as likely to steal money or goods from their employers.

Call the Pros

Doing background checks yourself can be time consuming and costly Firms specializing in employee investigations can often do the job more quickly and better than you can for between $25 and $75. "Using an investigative firm protects you and your company from a lawsuit if the investigative firm makes a mistake and breaks the law," says Valerie Frydendall of CB&I, a Denver, Colorado, firm that specializes in employee investigations.

Drug Testing

Anyone with a cocaine, crack, or heroin addiction needs a lot of money to support the habit. If you are not careful, your company may unknowingly pay for it. Obviously, a person who has problems with narcotics is not the type of employee you want. On the application and in newspaper ads, you should announce in bold letters that your company will conduct a pre-employment drug screening. Just seeing this will scare away many undesirable employees early in the process.

Of course, it is always easier not to scrutinize prospective employees. Checking other people's backgrounds is a chore. Perhaps you have doubts about the wisdom of investigating before hiring. If so, remember the Valdez.