As retailers stare down the 2018 holiday shopping season, they’re boosting their workforces with legions of temporary employees to help out during the most hectic time of the year.
But low unemployment rates – which have hovered around 4% all year – made holiday hiring tricky last year, with some retail giants deciding to increase the hours of their existing workforce instead of adding on new help.
For others, the low unemployment rate can force a scramble to find qualified temporary employees. And, in many cases, once they land on candidates who appear to meet their basic requirements, they start adding them to the work schedule — few questions asked.
But the busy holiday season is no reason for companies to scrap a thorough background check policy. After all, temporary employees often have the same access to company facilities, data and customers as full-time employees.
Background checks on employees, even if they will only be in-store for a short period of time, will help mitigate the risk of employee fraud or theft, and ensure customer and employee safety, allowing the bustling holiday season to run as smoothly as possible.
What are the risks?
Many times, employers cite time and money as the reason to skip background checks on seasonal hires. They may think they can pass over this essential step in the hiring process because the employee won’t be with the company for very long, so the risk doesn’t seem worth the resources. But that’s the wrong mentality.
The drawbacks of not fully vetting new hires — whether they are permanent or temporary — can cost companies more than they ever might have spent on a background check.
Theft, of course, is always on the mind of merchants. Though losses from theft, fraud, paperwork errors and other causes dipped from $48.9 billion in 2016 to $46.8 billion in 2017, according to the annual National Retail Security Survey, employee or internal theft accounted for 33% of total retail “shrinkage.”
The average loss from employee theft totaled more than $1,200, according to the study, compared to shoplifting, which averaged $559 per incident.
Indeed, one HireRight customer found that for every dollar the company spent on background checks, another $15 were saved in shrinkage.
Identity theft
But items off the sales floor aren’t the only things a bad hire can steal. Employees with access to credit and debit card numbers, and other sensitive information can wreak havoc on valued customers, draining bank accounts, maxing out credit cards and opening new cards in shoppers’ names.
In 2017, identity fraud hit a record high with 16.7 million U.S. victims and losses amounting to $16.8 billion. One study says consumers don’t think retailers are doing enough to protect them.
The good news is that more retail professionals are catching on to the need for screening temporary workers before they come on board. Data from HireRight’s 2018 Benchmark Report found that 84% of survey respondents are conducting background checks, up from only 41% six years ago.
But there’s still plenty of room for improvement. Here are the three things employers can do to ensure their holiday hires will only help – not hurt – this holiday season:
1. Conduct a criminal records check
Don’t trust the applicant to give you the full list of their past addresses and every alias. After all, job candidates with something to hide probably won’t give you every detail about their past life.
A Social Security trace, using a potential hire’s Social Security number, will uncover every address associated with a candidate’s credit history. Then, using those addresses, employers should conduct the industry standard seven-year criminal search.
One of HireRight’s national retailer clients saw firsthand the difference a basic and more robust criminal background check program can make. The company had historically only performed basic criminal history searches – conducted only in jurisdictions identified by an initial search of a criminal history database. Then HireRight performed 3,500 checks on a sample of the company’s applicant pool. These checks included national sex offender, Social Security trace, enhanced criminal, and federal criminal searches. The sample uncovered 30% more applicants who did not meet the company’s hiring standards, compared to the basic screens done previously.
2. Check the sex offender registry
During the holidays, malls and shops are teaming with children, who often are accompanying distracted adults eager to check another thing off their to-do list. The last thing a retailer would want to add is a predator to the mix.
A thorough sex offender registry search can help ensure your customers and employees are safe.
3. Don’t forget the drug screen
Many holiday workers will be trusted to work with customers face-to-face, and may be a customer’s first – or only – impression of the business. And those not on the floor may be tasked with handling large boxes or equipment in storage rooms. With marijuana laws becoming more lax and U.S. opioid addiction remaining an issue, screening candidates for drug-use can prevent introducing hires that will put customers’ comfort at risk or introduce a liability.
Urine tests are the standard, and will turn around results in up to three days. Newer oral tests, however, can be done inside an employer’s office and require a simple swab inside the mouth. They provide a negative result within 10 minutes. If the result is non-negative, the employer might choose to not extend a job offer or send the candidate to a lab for further validation.
As companies beef up the screening of their holiday hires, it’s also a good time to take another look at their current hires to ensure new issues haven’t cropped up since the original background check was completed. If an employer hasn’t screened an employee in years, they really don’t know who is minding the till.