Certifinder Blog Moves To HRhome

We are pleased to announce that all of the content and articles written for the Certifinder Blog will now be available exclusively on the Social HRhome Blog.

HRhome is an online resource created by HR professionals for HR professionals. Certifinder customers have access to proprietary content and customizable features within 9 primary sections that allow them to find the information, tools, and resources they need to quickly solve HR-related challenges. Customers also have the ability to access to premium content developed by Littler Mendelson. HRhome is a unique and rich set of content and tools so that you don’t have to waste any time finding what you need to get your job done.

Click on the link to visit the Social HRhome Blog and be sure to subscribe (it’s free) so that you get all of the latest news and information from Certifinder, HRhome and Littler Mendelson.

Analyzing Identity Theft

In my human resource management class, a student stated that he thought it was illegal for employers to ask job applicants for their Social Security numbers. His statement surprised me; but, when I asked what others thought I discovered that most of the students agreed.  Many even said they would refuse to give their Social Security number on a job application to protect themselves from identity theft.

I told a friend who is a first-class human resource consultant about my classroom exchange.   She said I shouldn’t be so surprised because she and other HR consultants were encouraging companies to eliminate Social Security numbers from their job applications.  The new “best practices” standards are to not ask for any personal identifying information until after the company has made a conditional offer of employment.  Again, these “best practices” standards are to protect identity theft which seems to be a growing paranoia.

I find this situation very disturbing because the problem is upside down.  Rather than eliminating Social Security numbers and other personal identifying information from job applications to prevent identity theft, we need to eliminate identity theft.  Social Security numbers were created for employment purposes – to show that a person is authorized to work in the United States and to maintain a record of each person’s earnings and withholdings history.  It seems to me that all job applicants should be required to provide a valid Social Security number on their job application and before they progress any further in the hiring process this information needs to be verified.

Executives at Certifinder told me that the previous year they had a 28 percent “hit” rate, meaning that 28 percent of the resumes and job applications they checked had false information.  When I asked what kinds of information was misrepresented, they said it included almost anything – educational degrees the applicants never received from schools they had never attended, previous work experience from employers that didn’t exist or from whom they had never worked, previous salaries that were overstated, even home addresses that were wrong.  With a “hit” rate this high, why would any employer put someone who submits a dishonest resume in a position of trust, or any other job for that matter?  In short, waiting to request a Social Security number until after you have made a conditional offer of employment is a mistake even if it reduces identity theft.

In a front page article, The Wall Street Journal reported the going rates for stolen information, such as $5- 7 for Social Security numbers, $2- 4 for email addresses, and $30- 400 for bank account numbers.  The fact that there is a market for stolen electronic data should be very shocking to everyone in society.  Our social standards have not kept pace with our technological advances.  The misuse of electronic data is just as wrong as the theft of any other property.  Intercepting someone’s email is just as wrong as stealing someone’s mail, which is a federal offense.  The fact that the information is electronic does not eliminate or reduce the moral obligations surrounding it; it only makes the harm that can come from misusing it more convenient and serious.

- David J. Cherrington

Shoppers and Dishonest Employees Stole Over $7 Billion in 2010

Shoplifters and dishonest employees stole over $7.0 billion in 2010 from just 23 major retailers, according to the 23rd Annual Retail Theft Survey conducted by Jack L. Hayes International, the leading loss prevention and inventory shrinkage control consulting firm. These 23 surveyed retailers apprehended over 1 million shoplifters and dishonest employees in 2010 and recovered more than $148 million from these thieves.

“For the first time in over 10 years, total shoplifter and dishonest employee apprehensions, and the dollars recovered from those apprehensions all declined from the previous year”, said Mark R. Doyle, President of Jack L. Hayes International. “While surveyed retailers made almost a million shoplifting apprehensions, apprehended over 69,000 dishonest employees, and recovered over $148 million from these thieves in 2010, these numbers are all down slightly from the previous year. It appears the economy, fewer store employees, and less Loss Prevention staffing all played a role in these results.”  Mr. Doyle added, “Both shoplifting and employee theft continue to plague the retail industry, which results in higher prices to the consumer and can force companies to close unprofitable stores.”

Highlights from this highly anticipated annual theft survey include:

• Participants: 23 large retail companies with 19,104 stores and over $632 billion in retail sales (2010)
• Apprehensions: 1,029,276 shoplifters and dishonest employees were apprehended in 2010, down 3.8% from 2009
• Recovery Dollars: Over $148 million was recovered from apprehended shoplifters and dishonest employees in 2010, down 7.3% from 2009
• Shoplifter Apprehensions: 959,903 shoplifters were apprehended in 2010, down 4.1% from 2009
• Shoplifter Recovery Dollars: Over $104 million was recovered from apprehended shoplifters in 2010, a decline 4.7% from 2009.  An additional $33 million was recovered in 2010 from shoplifters where no apprehension was made, up a substantial 16.4% from 2009
• Employee Apprehensions: 69,373 dishonest employees were apprehended in 2010, down 0.4% from 2009
• Employee Recovery Dollars: Over $44 million was recovered from employee apprehensions in 2010, down 12.7% from 2009
• On a per company basis, one in every 33.2 employees was apprehended for theft from their employer in 2010. (Based on over 2.8 million employees)
• On a per case average, dishonest employees steal 5.9 times the amount stolen by shoplifters ($639.99 vs $108.46)

Hayes International believes that ineffective pre-employment screening is a major contributor to the significant employee theft problem.

The first step to controlling internal theft starts at the point-of-hire; do not hire the “bad apple”’.  Some retailers, in an effort to reduce their costs, have lowered their pre-screening requirements and are now hiring more ‘questionable’ employees.  Anytime statistics show one out of every 33 employees is actually caught stealing by their employer, there has to be some type of breakdown in the pre-employment screening process.

To request a full version of the Hayes Retail Theft Survey, click on the Contact Us link and let us know you would like a free copy of the report.

- Editor

Use of Credit Reports by Employers Will Soon Be Restricted in Connecticut

Effective October 1, 2011, employers in Connecticut will face new restrictions on the use of credit reports regarding current or prospective employees as a result of the recent enactment this month of Connecticut Public Act 11-223. In enacting the new law, Connecticut becomes the sixth state limiting employers’ use of credit reports, following Hawaii, Washington, Oregon, Illinois, and Maryland. Similar laws are pending in several other states and at the federal level. The Equal Employment Opportunity Commission (EEOC) is also conducting related investigations and pursuing at least one disparate impact claim based on the use of credit reports. Thus, employers who use credit history information to inform hiring or personnel decisions in states that have enacted credit check laws should review their policies for compliance, and employers everywhere should continue to monitor developments in this evolving area of the law.

To read the full article from Rod Fliegel and William Simmons on this important topic, please visit the Littler Mendelson ASAP website.

- Editor

Reducing Employee Theft Using Applicant Integrity Screening

One of our major US retail customers has a large population of part-time and full-time hourly employees in the US and Canada.  These employees range from 18 to 25 years old and are often new to the workforce.  Average turnover for full-time employees was 84% in 2010 and 130% within the part-time employee population.

The most significant problem facing this company with this employee population is dishonesty and employee theft.  They have determined that successful employees within their organization have the following characteristics:

• High level of honesty and integrity
• Ability to work independently
• Strong work ethic

Certifinder started out providing this company with the Applicant Review integrity assessment for pre-screening potential applicants.  The Applicant Review is used by many retailers in the US and Canada to reduce employee theft by identifying the highest-risk applicants early in the hiring process.  Because the Applicant Review is very cost-effective, it can be utilized for the entire applicant pool and not just the final candidate.

During a recent quarterly review with this customer, we concluded that the Applicant Review was providing the customer with a good tool for pre-screening applicants but more was needed to address the significant employee theft issues for this organization.  To determine the best solution for this customer, we contacted several leading research organizations within the retail industry to get their data and recommendations.  We also contacted other Certifinder customers in the retail segment that have faced similar issues to understand their experiences and get specific recommendations on what has worked for them.

After conducting research with several leading organizations on the subject of reducing employee theft and dishonesty and having meaningful conversations with key retail customers, we developed a specific set of recommendations that our customer could review and implement to reduce employee theft.

More Information

If you would like a copy of the case study titled “Reducing Employee Theft Using Applicant Integrity Screening” developed from this work, please send an e-mail request to Steve Bryson at: steve.bryson@certifinder.com

- Gary Cornick