Background Screening Statistics

The effects of Bad Hiring on a company's finances.

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With the recent challenges faced by the United States economy, employing the right person for the job has become really important for both employers and employees. It is not a surprise that for almost every firm in the US, the direct cost in relation to labor is probably the first or second highest line item in a budget; this ranges from benefits, payroll, recruiting as well as training. That budget line item gets even bigger if the firm includes the cost of managing employees.

According to estimates by CFO Research Services, companies spend about 36 percent of their revenues on "human capital" even more for industries like pharmaceutical industry and financial services. Nonetheless, a lot of employers devote more time and effort selecting office equipment or making the choice between competing brands of office supplies instead of taking the time to choose the right employees.

Below is some statistics of how employment screening affects different industries:

• 8% of people applying for a job have a criminal record within the last seven years.  About 24% of those also reveal two or more adverse records within the same period. 

• 51 % of all applications, resumes, and references that applicants submitted have inaccurate information. 

• 46% of employment, education and/or reference checks revealed that the information provided by the applicant is different from what was reported. 

• 30% of business failure is a result of employee theft and other similar forms of dishonesty. 

• Directly or indirectly, the average cost of employee turnover is equivalent to 150% of their annual salary. 

• 47% of credit records showed a judgment, lien, bankruptcy, or referral to a collection agency. 

• 38% of driving records pointed out "one or more violations or convictions."

Generally, the above statistics illustrates how important it is for employers to carry out adequate employment background screenings and the effects of in-adequate screening on the bottom line.

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