How employee background checks protect your business

Thief holding up a bag of loot

With safety and security an ongoing concern, businesses need to be increasingly savvy to protect themselves and their customers from potential threats. Pre-screening of employees is a vital first step many miss.

For Australian businesses, crime committed by employees is an unfortunate and costly reality. It is estimated that approximately 80 percent of workplace crime is carried out by employees, with offences ranging from fraud and theft, to assault and bribery. According to the Australian Federal Police, fraud losses from staff and former staff alone amount to at least $1.5 billion a year.

Theft is a common risk for SMEs, with figures showing that staff theft in particular is on the rise. The Global Retail Theft Barometer measures annual unknown losses in the retail sector. The 2011 report revealed that thefts by staff account for 40 percent of unknown losses, a greater risk than customer theft at 37 percent. We’re not talking about pinching a pen from the stationery cupboard; the average value of staff thefts amounted to $392.56.

With employee crime representing a very real problem, it is essential that SMEs take the appropriate steps to reduce the risk of being a victim. One effective, yet surprisingly simple way to safeguard your business is conducting thorough background checks on the staff you employ, both permanent and contract.

Informed employment decisions

Pre-employment screening can form a crucial part of the HR process and allows employers to more objectively assess the suitability of candidates against the requirements and risks of a job role. As part of this process businesses can now quickly and easily obtain an accurate National Criminal History Check through a CrimTrac accredited agency. This certification provides details of any Australian criminal record or outstanding charges that a job applicant has against their names.

By requesting that individuals provide national crime check, businesses can be sure that they have correct and up-to-date information for consideration. It is then up to a business to assess the results and establish a candidate’s suitability for employment based on the broader recruitment process.

Some criminal offences make it illegal to work in a particular role, for example the Aged Care Act has stringent guidelines that preclude an individual from employment if they have been convicted of murder or sexual assault or been convicted of, and sentenced to imprisonment for, any other form of assault.

However, in industries without mandatory requirements, employers also benefit significantly from using criminal history information to assess job applicants on a case-by-case basis. The key factors to consider in determining this are the relevance of the offence to the role, and the potential risk posed by the individual to other staff and customers.

Whilst some offences such as drink driving, driving unregistered or driving uninsured, may not affect a person’s suitability for a desk job it may make them an undesirable hire for a logistics role. Similarly a narcotics offence may not preclude an individual from working in retail, however in industries where machinery is operated this could be a high-risk liability.

Despite the risks, many SMEs aren’t aware that they can request a criminal history check from job applicants. Or if they are, the traditional process of requesting a check from the police is viewed as too time-consuming and costly, leaving them potentially exposed.

However, the introduction of CrimTrac accredited agencies in recent years has enabled businesses to obtain the information within 48 hours and at a lower cost than charged by police stations.

Who can benefit?

Individuals may be required to obtain a national police check in Australia for employment working with ‘vulnerable’ populations, occupation-related licensing or registration, Commonwealth government jobs and for voluntary work.

A wide range of industries are now required by law to conduct criminal history checks of employees, however, it makes business sense for many other sectors to request criminal history disclosures as part of recruitment screening for high-risk candidates. For example, businesses with high staff turnover, such as cleaning, heathcare, quick service food franchises, and seasonal retailers; companies where heavy machinery or expensive equipment is operated; roles requiring high levels of interaction with the public; and roles where employees have access to company finances or accounts.

Professions that require criminal history checks and examine the criminal history of individuals prior to licensing or registration include childcare and teaching; health professionals (such as doctors, dentists, nurses, pharmacists and midwives); police and correction staff (including security and private investigators); government workers (such as members of parliament); real estate agents, land agents, conveyances and building work contractors; financial service professionals; public passenger services (such as taxi drivers and bus drivers); gaming licence holders and bookmakers; certain managerial personnel; second-hand dealers; liquor sellers and pawn brokers.

Currently these requirements are mandated on a state-by-state basis, so it is crucial that businesses check which regulations apply to them.

The risks to SMEs

With industries requiring mandatory crime checks, business are obligated to ensure that employees obtain certification. Non-compliance is a serious matter and can lead to fines, licences being revoked, loss of contracts and potential legal action for negligence. However, there are significant risks to all businesses of hiring the wrong person, including the cost of crime, reputational damage and potential legal action if a customer is affected by a staff member’s actions.

While 90 percent of the criminal records highlighted by National Crime Check are for minor traffic and driving offences, we have also seen numerous examples where a business has benefited enormously from pre-screening of employees. One client in the mining sector employed staff and then retrospectively obtained police checks due to the time lapse in receiving these from the police. However, when we started processing their check we uncovered current staff with a string of narcotics and assault charges, which were putting the business in a potentially high-risk position. As a result they redesigned their employment process to ensure that crime checks were conducted prior to employment commencing.

There have also been several cases where crime checks have revealed imprisonment for sexual assault and murder, which the potential employer may have otherwise remained unaware of. While it is up to the business to decide whether this has a bearing on suitability for employment, by having the facts at hand, employers are adequately equipped to assess the risk posed.

Obtaining criminal history checks

With the introduction of CrimTrac accredited agencies, the process of applying for a national criminal history check has been made far simpler and faster than directly from the police. This is particularly beneficial to businesses requiring checks in short timeframes or processing large volumes of checks.

National Crime Check’s innovative online portal provides a fast, simple online application process, enabling businesses to lodge and monitor the progress of crime checks themselves. Once businesses have registered, they simply need to obtain a completed consent form from the individual, conduct 100 points proof of identify check and submit details via an online portal. Businesses are notified once the process is complete, and the police check certificate is then available to view and print online.

Most criminal history checks are returned within 48 hours of lodgement, in comparison to the typical four-to-six weeks processing period when lodged directly with the police.

In addition to being fast, National Crime Check is a secure and private option, and is backed by cutting edge technology. It is accredited by CrimTrac; the background checking body that works with the Australian Federal Police and all state-based police services to perform national criminal history checks, and is compliant with security and privacy regulations.

What about social media?

Andrew Cross of Ambition Recruitment offers the following advice for employers.

Social media presents a smorgasbord of information for the discerning employer to use in their background checking processes, but where do you draw the line between genuine business protection and opening Pandora’s box on issues of privacy and discrimination? Hiring an employee carries not only an excited promise for the future but also the risk of business damage, brand derailment and potential lawsuits. It is therefore not unreasonable to go to reasonable lengths to screen the past activities, interests and online presence of potential employees.

So what should you look for in your investigation? Well the good news is that if it’s in the public domain, then it’s fair game for consideration. The bad news however is that your hiring decision must not be tainted in any way, with actions which appear discriminatory in nature (either directly or indirectly).

And therein lays the moral of the story. Whilst social media will undoubtedly grant greater access to a potential employee’s personality than ever before, it doesn’t have to be all negative. Look for evidence of their hobbies and interests, skills and achievements. And whilst from time to time they may like a beer or two, or have horrendous fashion sense, remember they may indeed be more like you than you’d care to admit.