Employment Screening as a Risk Management Strategy

As the saying goes, “No risk, no reward.” Every organization has risks to face. And while it’s unrealistic to think we can prevent every loss, certain risks demand our attention. In employment screening, we address key human capital risks – those related to the “human factor” of the organization.

Specifically, employment screening is designed to bring an objective view to the decisions made around hiring, promoting, retaining, and dismissing employees. Rather than relying on “gut feel” or what’s stated on an applicant’s resume, employment screening gives you clear methods by which to verify claims and check the background of a prospective or current employee. Screening programs can also strengthen an organization’s defense in the event of a negligent hiring or negligent retention lawsuit by demonstrating ‘duty of care’ in the employment process.

The Employment Screening Risk Management Process:

employment screening risk assessmentThe process of establishing an employment screening strategy for risk management begins with a risk assessment and ends with setting clear and consistent hiring criteria.

1. Risk Assessment – Risk Tolerance & Role-Related Risk

Background screening programs are tuned to the risk appetite and tolerance level of the organization’s leaders.  In other words, we take into account the amount of exposed risk an organization is willing to accept (risk appetite) and the amount of uncertainty the organization is willing to accept (risk tolerance) in relation to human capital.

A risk assessment helps to measure and define those boundaries by looking at both the enterprise risk appetite and tolerance and the role-related risks.

Download our Risk Assessment Worksheet for a quick and easy approach.

And remember, no risk assessment is complete without a comprehensive assessment of the organization’s compliance requirements.  In certain situations, your organization may have a legal or contractual obligation that supersedes all else.

2. Screening Plan/Methodology

From the risk assessment you’ll have a good feel for what your background checks should involve.  The type and comprehensiveness of the background checks you perform for each individual will be tied to the organization’s risk tolerance and further defined by the role-related risks for each job. Here’s what this looks like:


employment screening methodology

3. Decision Making Criteria

Alright, so you’ve got a background screening report in your hands.  The next obvious step in your risk management strategy is to define how you’ll judge the results of the background check to make employment-related decisions. There is much to consider, including FCRA, Title VII, and other state and federal laws.  Importantly, your decision criteria should be consistent across all applicants or candidates for a given position, brightline policies around criminal reports or credit checks should be approached with extreme caution, and your program should include a targeted screen and an individualized assessment component.

In the end, there is much to be gained by approaching employment screening from a risk management perspective rather than a mere “check the box” activity.

Our latest background screening guide offers much more on these topics.  Download the Employment Screening Survival Kit here.

employment screening kit

About MichaelGaul

Michael is a results-oriented marketing executive with over two decades of experience in employment screening, physical security, and business process management. Michael has deep experience in human capital risk management and a passion for educating business leaders and HR professionals on strategies that tangibly protect their interests. Michael serves on the Board of the Secure Cash and Transport Association (SCTA) and is a member of the Professional Background Screening Association (PBSA), and the American Society of Industrial Security (ASIS).
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