User login

CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
2 + 18 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.

Common Sense and Effective HR Practices Need to Prevail in Screening Applicants

Common Sense and Effective HR Practices Need to Prevail in Screening Applicants

By W. Barry Nixon, SPHR

Recently there has been a flurry of articles and a lot of hullabaloo about the EEOC announcing it intends to produce guidelines that focus on 'evidence based' screening and hiring policies. Recent EEOC hearings and the agency's first lawsuit arising from screening practices have provided momentum to the federal government's move to restrict background screening of applicants' credit and criminal histories. Acting EEOC Chairman Stuart Ishimaru has been a vocal critic of employee background checks, calling for the agency to issue guidelines within the next 12 to 18 months on how to carry out background checks in a nondiscriminatory manner. Ishimaru says that "Employers can expect the new guidelines to require empirical evidence for the business necessity defense in discrimination cases that arise from screening and hiring practices." Lots of people are saying the new guidelines are likely to upend hiring policies based on untested assumptions about criminality and workplace behaviors.

Without trying to be too casual about the issue I really see all the uproar as nothing more than the title of a great old jazz song 'Much To Do About Nothing.' Human Resource Managers that are providing leadership in their organizations have long known that 'one size does not fit all' in the hiring process and that the most effective hiring processes involve using an array of selection techniques. Dr. Charles Handler states in his recent study, 'Decision Making With the Hiring Process: Four Key Ingredients for Success,' that the key factors in a good hiring decision include:

· Relevant predictors of performance

· High quality information

· Information management (the ability to organize and access information) to support decision making

The relevant predictors of performance may include pre-employment testing (personality and/or skills), handwriting analysis, reference checking, behavioral & structural interviewing, job assessments, job sampling, background screening and probably many others. Like any other business process the best decisions are consistently made when managers have high quality information and the right information. The same principle holds true for making hiring decisions.

So the problem is not background screening as the soothsayers would have us believe, but more so how organizations are using background screening. Any firm that is using background screening as the primary information source to determine who to hire should have their entire Human Resource organization fired.

In the end, employers stand to benefit from the new guidelines, which will likely bring greater clarity to what is now a legal quagmire.1 In addition to the new guidelines, in September 2009 the EEOC filed a lawsuit (EEOC v. Freeman Cos., D. Md., No. 09-CV-02573) in the U.S. district court in Maryland against Freeman Companies, a Dallas-based corporate event-planning company. The EEOC claims that Freeman has used credit histories and criminal background checks to unlawfully "deprive a class of Black, Hispanic and male job applicants of equal employment opportunities and otherwise adversely affect their status as applicants because of their race, national origin and sex." The agency is asking the court to prohibit Freeman from using credit histories and criminal background checks. It's also requesting that the court order the company to hire applicants who were rejected on the basis of the reports and compensate them with back pay from the time they were rejected.

The EEOC's position in Freeman is consistent with informal guidance the EEOC issued on Dec. 1, 2005. In this informal discussion letter, the EEOC said that an employer who uses a "blanket" policy of not hiring any applicant who has a history of arrest or convictions violates Title VII of the Civil Rights Act because such a policy "disproportionately excludes members of certain racial and ethnic groups, unless the employer can demonstrate a business need for use of this criteria."2 The outcome of the case will provide increased clarity for employers on how to move forward with the use of credit checks and convictions records.However, I am reminded of the great words of Ralph Waldo Emerson "a foolish consistency is the hobgoblin of small minds," because effective Human Resource Managers are not using blanket credit checks and no hiring of previously incarcerated persons anyway.

Leslie E. Silverman, partner, Proskauer Rose LLP, in Washington, D.C., stated it very well "avoid blanket applications of credit checks for all positions." She further stated that "It would be really risky for your company to use a 'one-size-fits-all' policy," Silverman said in a March 3, 2010, Society for Human Resource Management webcast. "A blanket application of credit checks [provides] your company with less of an ability to argue that it is job related," she said. Silverman advised that HR: Be selective on which positions to subject to a credit check. Be able to articulate a rational reason on why a credit check is needed for predicting job performance and related to the business functions. Ensure that your managers use only the information relevant to the job in question that is needed to make an employment decision. Allow your candidates to explain the reasons for negative credit information. "This will place you in a better position to assert that the credit information really was job related and consistent with business necessity," she said. Good Human Resource Managers already know this and are practicing what Silverman said.3 Best practice in this area is to use credit check in the hiring process for jobs that have been classified as 'sensitive' in a job description. Sensitive jobs are those that have been defined as creating high security risk for organizations, thus requiring a higher level of scrutiny of prospective hires to mitigate the risk. Even with the use of 'sensitive' jobs as a category employers still need to be careful and apply the job relevance test. For example, most would agree that using a credit check may be very relevant when hiring a Chief Financial Officer, whereas, it is unlikely that that anyone would agree that using this type of check for a garbage truck driver would be appropriate even though both might be defined as sensitive jobs.

Sensitive jobs need to be defined by each organization based on the nature of their industry and jobs, some typical jobs that would likely be defined as sensitive fit into the following categories:

· Jobs that have access to or directly deal with large amounts of funds, valuables or have signature approval for such items, e.g., C-Suite positions, senior financial positions, Purchasing Manager, tellers, cashiers, etc.

· Jobs that have wide access to company resources that if mismanaged could cause severe damage to the organization, e.g., Information Technology positions with wide access to the organizations information network, janitors that have master keys to company facilities, etc.

· Jobs that have significant access to personal identifiable information and/or impact on the well being of the organizations human resources, e.g., Security, HR, Safety/Occupational Health, Medical/Psychological professionals, etc.

· Jobs that involve the use of equipment or tools that if used in an appropriately manner could cause severe harm to employees, the organizations resources or the public, e.g., truck drivers, surgeons, airplane pilots, armed security professionals, etc.

In addition to identifying 'sensitive jobs' the Human Resources department should fully understand that the purpose of using credit checks is to identify 'red flags,' not to automatically exclude. Once a red flag is identified it is information that should be pursued with the applicant to determine the relevance of the information. For example, if someone has unpaid debt, is it because of a divorce, an uninsured illness, or perhaps an unlucky turn in the housing market? If there are 'red flags' the best practice is to give the candidate a chance to explain. There may be a good explanation or it is even possible that the information in the credit report may be wrong. This step is important to ensure compliance with the Fair Credit Report Act which requires that employers provide applicants with a copy of the credit report, a copy of their rights under the law before taking adverse action and the opportunity to explain or dispute negative information.4 As is true with many of the labor laws and particularly anti-discrimination requirements the laws that are passed are generally catching up to progressive human resource practices and forcing the organizations that are using outdated, out of step and improper practices to get on board with contemporary human resource ways of doing things. Thus, for progressive organizations all this talk about 'evidence based' hiring is as I stated earlier 'Much To Do About Nothing,' while for less progressive organizations it will mean many changes in their hiring practice and putting aside archaic ways of doing things. For them, let the chips fall where they may.

W. Barry Nixon, SPHR is a recognized expert in background screening and manages the #1 online directory for finding a background screening firm,PreemploymentDirectory.com. He is also the author of the recent book 'Background Screening and Investigations: Managing Hiring Risk from a HR and Security Perspective' and the 'Comprehensive Guide for Selecting a Background Screening Firm.' His company also published The Employment Screening Journal.

Endnotes:

1. Fay Hansen, Special Report on Background Checking - Burden of Proof, Workforce Management, February 2010, p.27-33.

2. Roy Maurer, Federal Lawmakers, Enforcers Set Sights on Background Screening, Legal Issues, SHRM.

3. Fay Hansen, Special Report on Background Checking - Burden of Proof, Workforce Management, February 2010, p.27-33.

4. Credit reports and the hiring process: The value (and risk) to HR professionals, EmployeeScreenIQ, www.employeescreen.com.

http://pihrablog.wordpress.com/2010/07/26/common-sense-and-effective-hr-...