Hiring a new employee is an investment of both time and money. The costs are high, but the cost of making a poor hiring decision is much higher.
A company can lose up to two and one-half times the amount of that person’s salary. Those expenses include direct costs related to replacing and training an employee, in addition to the resulting indirect costs due to issues such as employee violence, theft and fraudulent claims. With the construction industry continuing its rebound, veteran workers who left during the down economy will need to be replaced. As hiring continues, it is important to have a pre-employment program or strategy in place to protect the company.
Gone are the days when a glowing recommendation was enough to land the next construction job. Today, more construction hiring managers are asking to see a resume and rightfully so. In most industries, pre-employment screenings and hiring decisions have traditionally focused on a review of basic information: the employment application, resume/experience and an interview. However, according to a CareerBuilder survey, 57 percent of employers have caught lies on a resume. This scary statistic proves it is critical to validate information provided by candidates. Following are a few types of validations and what employers can and cannot use.
- Reference checks. This helps verify a potential employee’s work habits and may include information from previous employers or personal references.
- Motor vehicle record check. Drivers bring past driving habits along with them. Giving keys to an employee with a poor driving record can subject the company to significant liability in the event of an accident.
- Criminal background checks. Hiring an employee with a criminal history can pose a danger to fellow employees or the public. In general, arrest records cannot be used, and state and federal laws differ on the extent that an employer may consider an applicant’s criminal history in making hiring decisions.
Filtering Applicants in Today’s Connected World
The practice of using social networking sites to further research potential employees and weed out candidates is risky. Not only is the organization dabbling in issues of legality, but it also could place a company in thorny situations when it comes to personal differences.
Employers have said provocative photos on a social networking site were the largest contributing factor when a potential employee was not hired. While “provocative” seems like a crazy term for employees in the construction space, who gets to define what constitutes provocative and does the candidate have the right to find out this is the reason he or she was not hired?
By using social networking sites as a filtering tool, a company could be exposing itself to potential lawsuits. Many users post personal information, such as their religion and age. Even if the candidate is not hired for legitimate reasons, such as lack of experience, he could accuse the company of illegally basing the decision on information obtained from his social networking site.
Staying Protected Just in Case
Even if a company has done its due diligence and followed its pre-employment strategy, there is still a chance it can be served with an employment practices liability (EPL) lawsuit. According to researchers, three out of five employers will be sued by a prospective, current or former employee while in business. These lawsuits can be financially and emotionally draining for a construction company, even if it is found not liable. Avoiding an EPL claim requires management to be proactive by establishing a consistent methodology for employee policies, recordkeeping and dealing with legal counsel and insurers.
Unfortunately, claims alleging wrongful termination, whistleblowing and age discrimination are common. While not all of these claims are paid out, it can still lower company morale and result in large litigation costs. As such, following are a few best practices for preventing employment-related claims.
- Investigate candidates during the hiring process lawfully and guard their private information closely.
- Require employees to sign an “employment-at-will” policy.
- Ensure all new and current employees receive proper training, especially on-the-job safety training for their roles.
- Create and enforce a strict zero-tolerance policy regarding discrimination and harassment in the workplace.
- Immediately investigate all claims of harassment and administer discipline and training as necessary.
- Ensure the company is properly covered under Employment Practices Liability insurance.
- Make sure the workplace policy provides at least two different methods of reporting harassment.
- Create an employee handbook, and then have all employees sign that they have read and understand it.
- Thoroughly document all evaluations, employee complaints and situations that led to termination of employment.
The uptick in the construction industry is definitely a welcome one and will bring new talent and great projects to fruition. As organizations continue to hire, they can be protected by following proper pre-employment procedures and employment best practices.