Selection Protection For Canadian Employers

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By Patricia Langmuir Taylor

As seen in HR.com
Used with permission

Although the tragic events of September 11, 2001, and their offspring, "the war on terror", have raised our security sensitivity to unprecedented heights, the business world is still not paying sufficient attention to matters of security at various levels, one of the most porous being in hiring practices.

As companies install video cameras, erect fences and spend millions on secure access systems, it is equally important to be armed and prepared for a few unscrupulous people, these scoundrels who tend to show up for the interview dressed in sheep's clothing, making great noises with forked tongues of silver. And aren't they also very quiet and unassuming? I t's difficult to know who they are, so mitigating risk in the recruitment, selection and assessment process extends to one obvious critical and often overlooked component: professional background due diligence. We're talking, in other words, about: selection protection.

The advent of privacy legislation at federal and provincial levels is a golden opportunity for companies to review and implement sound professional background due diligence policies and procedures for candidates under consideration for employment. This is essential from lower levels right up to the executive suite. Organizations are, of course, legal entities that owners and directors have a fiduciary responsibility and obligation to protect.

With the rising interest in, and insistence upon corporate governance these days, sound professional background due diligence is doubly important.

Professional background due diligence, of which background checking is a critical part, is really selection protection for corporations that are socially responsible. Hiring managers have a duty to all stakeholders inclusive of shareholders, employees and customers. Moreover, this critical lens, a powerful aid in hiring high performance people, is likely to tell you whether to invest in them; and, if to invest, more about how to do so by tapping into the specific aspects of his or her experience and talent that, in turn, will help propel them towards peak performance along the lines of what Jim Collins, GoodToGreat has discovered as Level 5 leadership.

Notwithstanding the huge need for security professionals who advise on matters of intellectual property and business intelligence, until recently it has been much more of a challenge for most Canadian employers to pursue background checking on prospective employees. Whereas proof of a bona fide employment requirement used to be necessary to conduct various aspects of background checking i.e. academic verification, credit, criminal and driver record checking, now with the advent of The Personal Information Protection and Electronic Documents Act (PIPEDA), informed consent from the prospective employee gives the prospective employer the right to pursue professional reference and background checking.

Jennifer Fantini, an Employment Lawyer with Borden Ladner Gervais LLP, admits that "while PIPEDA is somewhat confusing for employers and employees alike because the law is developing at the moment it, nevertheless, should be seen by employers as a rule book for accessing important information about prospective employees."

Fantini further points out that a central concept of informed consent in this regard is that personal information belongs to the prospective employee. Therefore, collection of this kind of sensitive information underscores the need for companies and agents alike to safeguard it. Also, while the company owns the report, candidates have the right to read anything emanating from professional reference reviews and background checking, (as well, of course, as those associated with other aspects of the selection / assessment phase).

Vincent Tsang, Vice President Business Development of Toronto-based Infocheck Ltd., says, "9/ 11 has indeed had a major impact on how organizations look at best practices in hiring. Over the past three years corporate demand for background checking has increased dramatically." Tsang, of course, refers to verification of academic and other professional credentials, criminal, credit and driver abstract reports.

Whereas banks, pharmaceutical manufacturers, technology providers, other companies with significant proprietary interests and public sector organizations generally have had good background checking policies and procedures for years, many companies prior to 2001 did not even bother to pursue academic verification, mostly for reasons of time constraint. The well publicized saga of John Davey, the Canadian appointed to a CEO role with a Maori television station in New Zealand in 2000 has been a clarion wake-up call to the corporate world to take background checking seriously. The Davey case is a great example of academic verification, merely one component of background checking, having been pivotal to unraveling this particular con artist's premeditated and vast web of deception.

Infocheck's statistics show that 9% of what are commonly referred to as "red flag" candidates (i.e. people that have a glaring weakness in their professional track record that could prevent them from being hired) have been involved in theft and / or fraud-related activity. Clinton Fox, Vice President Operations, Infocheck, reveals their agency conducts 450

criminal checks each week and finds 7.5% of finalist candidates registered in the Canadian Police Information Centre (CPIC) data base. Obviously, the cost of not applying this type of scrutiny to the hiring process is sheer folly, particularly considering potential damage to the organization that could escalate into millions of dollars from just one bad hire. Technology providers, toy and pharmaceutical manufacturers are, in fact, at the top of the industrial espionage threat list.

While there are no guarantees that a prospective employee's experience and organizational behavior will impact positively on a company, nor about how that individual will relat e and react to the myriad threats both internal and external that are sure to bombard them once on board, at least a thorough background due diligence / 360 degree review, as an integral part of a larger, well defined and rigorous selection / assessment process, is an excellent way of increasing the odds that the candidate is suitably prepared for tactical and strategic responsibility at every turn.

Otherwise, it's a bit of a 'pig in a poke'. That is to say, when hiring managers, in effect, guess at how the person will be able to contribute to the company's collective prosperity and success; when they do not adhere to a structured and well thought out selection process; or in fact, skip over critical parts of their background due diligence. Gut feel offers only a third of the right answer in assessing fit. Gut feel, frankly, could also lead hiring managers to wrong conclusions, particularly if they are prone to clone hiring or if choosing people correctly is not a particular forte. By looking through the lens of referees who are familiar with his or her recent professional experience, particularly when questions posed during the background due diligence interviews are based on hiring criteria and core competencies, much can be gleaned about the candidate's aptness for the prospective role, organizational culture and surrounding business environment.

Contrary to popular opinion that feedback from referees tends to be skewed in favour of the candidate, useful suggestions for "developmental improvement" that come forth, if the right questions are posed about a candidate's track record, arguably are the most enlightening part of the process. Useful feedback includes such comments as: " ...would likely require more experience developing and managing people... "; "is possibly more tactical than strategic"; "tends to avoid conflict"; "may intimidate some colleagues"; "initially presents an impression of shyness and lack of assertiveness"; "aggressive style may not be suitable for managing others"; and, "tends to withhold information inappropriately". This seemingly negative commentary certainly, in combination with other revelations that have come to light during the selection / assessment phase, may indeed knock the candidate out of the running. On the other hand, often such valuable perspective is taken under advisement by superiors who are then better informed about how to coach and mentor the new person to greater professional heights.

Horror stories can easily unfold if candidates are not checked out properly from the beginning. For example, a human resources executive with a consulting firm recently stumbled into a real can of worms when asked to investigate a bullying incident between a department manager, team leader, and the harassment between them that extended to other members of the department. I t turns out the protagonist and antagonist in this case had not been put through a proper professional background due diligence review upon joining the firm in the first place. Therefore, reasons surrounding termination from their previous employer went undetected when they were introduced to the firm through an employee referral program. Not surprisingly, the two who, incidentally, were having an affair on company time, nearly destroyed the morale and productivity of the department with their aggressive and inappropriate behavior. In fact, toxicity generated from their actions was known to reduce another male member of the team to tears.

While no hiring process is foolproof, Doug Lawson, a Human Resources Executive with extensive experience in the pharmaceutical industry says his company's professional background due diligence process has saved them from "the odd few prevaricators" who manage to talk their way into the search process. I n fact, he recalls an individual whose referees had not been giving her glowing feedback and whose résumé indicated she had a degree from one of the maj or universities here in Ontario. A quick background check, however, proved this claim was patently untrue. When the candidate was confronted with this fact, she proceeded to fabricate an excuse that there was another student in the faculty with the same name. Her "name twin", according to her, had died and the university must have deleted her records by mistake at the same time. After many other attempts at lame explanations, she went as far as to say that she would go to the university to point out her graduation picture on the wall.

The moral of the story is that by adding a professional background due diligence review to the overall hiring process, companies can reduce the risks and costs associated with bad hiring. This is, after all, an effective way for busy hiring managers to increase their odds of hiring the right person. The career success of hiring managers may depend on it.