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A recent Associated Press piece discussed the use of credit checks by employers as part of pre-employment screening and background checks. The writer cited an interesting statistic.
“In its most recent report on reference and background checking, in 2004, the Society for Human Resource Management found that 19 percent of organizations conducted credit checks.”
This is one case where I think you should join the minority and use pre-employment credit checks. Here’s why.
If you’re hiring for a position where an employee has access to money, financial records or sensitive information, and credit check should be part of your screening. Financial problems can cause people to succumb to temptation to steal or use confidential information for profit.
I’d even go further than that. I think you should check the credit of anyone who’s promoted or transferred into a sensitive position with access to money or privileged information. I think you should run a credit check on all people in those positions on an annual basis.
But what about others? Remember that you run any background check to look for clues to things you want to investigate further.
Check the employers list on the credit report against the one on the application to make sure they match. Check basic personal information including any aliases or different social security numbers.
BE CAREFUL AND LEGAL: There are differing state laws on whether and when you can use a credit report as part of your hiring process. So check with your attorney to make sure you comply with the law.