Whenever a company hires someone, it takes a risk—from an economic perspective, a corporate culture perspective, a longevity perspective and from a safety perspective. According to Bill Greenblatt, president and CEO of Sterling Testing Systems, hirers should always ask themselves how well they know the person they are about to hire. Companies need to be able to make an educated decision to enhance their chances of success. RM talked with Greenblatt about the risk management role inherent in the process of looking for good employees.
RM: What does the process of pre-employment screening involve?
Businesses need to obtain information prior to hiring candidates. It’s pure risk management: trying to identify trouble before it becomes a problem you can’t handle. You have to look at an individual and find out as much as possible prior to making them an offer. You also need to verify information after offers are made. You can check intelligence through intelligence testing, skills-based testing (for example, to ensure they have the requisite skills to manage the business they say they can manage), criminal conviction searches, motor vehicle abstract searches, verification of address, social security numbers and credit information. You can also do drug testing, reference checks, third party interviews, and professional license verification.
Who handles pre-employment testing at most companies?
In most cases it’s the vice-president of human resources.
How should the risk manager be involved in this process?
Everything that that can be done to screen people mitigates risk. In business today, there are really three risks: safety risks, economic risks and people risks. The risks you take with people are generally greater than the risks you take with safety and economics. The economic risks that you ultimately wind up taking are caused by poor performance of people. The safety risks are also exacerbated by people. For example, if the right parties are in place to make a fire inspection standardized, to make emergency measures effective, it all comes down to hiring responsible people who understand the ins and outs of business, and the methods of dealing with human capital. That’s why the people in place are the greatest risk to any company. Not to mention the issues of permanency: if you build a business and you hire a corporate executive who does a wonderful job for eighteen months and then turns around and tells you, “I’m leaving,” you’ve now retarded the future growth of your company and you have to take huge steps just to get back to where you were in the first place. The more you know about an individual, the better business decisions you can make, which turn into better hiring decisions, which ultimately lead business to have less risk and to run better companies. Sometimes you do everything you can do, and you still make mistakes. You need to take risks to be a good hirer.
What emphasis has been changed since last September? Have employers wanted something different?
Employers are more concerned now about the physical security of their plants and facilities than ever before. There is no question about it. Employers are for the first time taking a look at the devil within. Up until now, they pretty much said: “Whoever I have here is who I’m going to stay with, they’ve been here a long time, I really have nothing to worry about.” They’re realizing now that is the furthest thing from the truth.
American business is going through an awakening. The terrorists were not working and they hadn’t infiltrated companies. But just think how easy it would be for a prospective terrorist to come into a company and infiltrate the computer system or the physical layout to cause and create damage. This is something that everyone, from the risk manager on down, is now more aware of than ever.
