Panning for Gold

Should companies do background checks on all job applicants? Consider this: More than 40 percent of all resumés contain errors, according to local employment-screening experts. Potential employees are fudging employment dates and even falsely claiming degrees that were never received, says Scott Andreassen, director of human resources services at Empo Corporation, a Minneapolis-based human resource outsourcing and professional employer organization. And employers have seen this trend increase since the market crashed in late 2008. Some job seekers—desperate to get a foot in the door—fabricate all or part of their resumé.

Greg Mohn, CEO of Orange Tree Employment Screening Services, a firm in Edina that provides pre-employment screening, estimates that about 80 percent of companies are doing some kind of background screening now and that this represents a significant increase in the past few years.

Several high-profile cases have highlighted the importance of screening. Most notably, Radio Shack CEO David Edmondson resigned in 2006 when it was found that he had not received two degrees he claimed to have earned. In fact, the school reported that he had completed only two semesters. The bad publicity from this oversight caused Radio Shack’s stock to plummet as investor and public trust in the company faltered.

“That’s actually the point in time when a lot of clients actually decide to sign on the dotted line . . . when they have a moment of pain,” Andreassen says.

Mohn agrees, likening the reaction to purchasing a security system after your house has been burglarized. He thinks employment laws regarding negligent hiring—when a company hires someone with a history of dangerous behavior but chooses to ignore it or doesn’t do the proper screening—coupled with the easy accessibility to fast, accurate, and inexpensive background checks, are behind the increasing demand for pre-employment screening services, too. “The courts have said you have a responsibility to at least do a background check,” Mohn says. “And if you didn’t do one, you can’t say you didn’t know [about past behavior]. That doesn’t hold up in court anymore.”