Hiring 'Right' Person Is Good, Avoiding 'Wrong' Person Better

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Every credit union wants to hire the "right" person for a position, but according to one expert, most do not realize the importance of not hiring the "wrong" candidate.

Karen Houston, regional vice president for Dallas, Texas-based Credit Union Employment Resources, a subsidiary of the Texas CU League, told attendees of a recent CUNA Human Resources Training and Development Council conference here more credit unions are putting time into pre-employment screening. The reason behind this trend?

"Because due-diligence protects credit unions from lawsuits," she declared. "Employee problems are caused by problem employees, and those problems can be avoided in the first place with a safe hiring program."

According to national hiring statistics, 4% of all job applicants in corporate America have a criminal record, 5% have negative personal references, 31% have one to three driving record violations, 6% have four or more driving violations, 1% have filed a worker's comp claim and 33% have a negative credit history. Houston said 48% of resumes and 30% of job applications contain false information or material.

With all those negative statistics out there, it is difficult for a credit union-or any employer -to protect itself.

Negligent hiring is defined as an employer's obligation not to hire an applicant it knew or should have known was likely to undertake conduct against other individuals or otherwise subject employees or third parties to actions which can create legal liability. Houston said if a credit union is found responsible, negligent hiring suits can cost it millions of dollars

Houston tells credit unions to follow the "S.A.F.E." system of hiring to minimize the probability of bringing in dangerous, questionable or unqualified candidates:

* Set up a program with documented policies and procedures, including checking references and doing a criminal background check.

* Acclimate and train everyone involved in the process with their safe hiring responsibilities. Impress upon them the personal importance of due diligence.

* Facilitate and implement using a safe-hiring checklist. This creates a routine and provides a clear audit trail.

* Evaluate and audit. Human beings tend to accomplish things that are measured, audited and rewarded, she said.

A Breath of A.I.R.

Another acronym Houston said will help credit unions avoid hiring the wrong person is A.I.R., or Application, Interview and References.

"During the application process, let people know up front about the safe-hiring program. It might discourage some from applying if they know there will be a criminal or credit background check and/or drug screening," she said.

Houston advises not relying solely on a person's resume. Instead, she encourages having candidates fill out an application. This allows a CU to inform the applicant there will be a background check, and the applicant's signature grants permission to do screening at that time and in the future.

CUs should be sure to ask the applicant to list all employment for the past five to 10 years, and addresses for seven to 10 years. Unexplained gaps might indicate potential problems.

Every interview has three goals, Houston said. First, it is a chance to convey critical information to the applicant to discourage bad applicants and encourage honesty. Second, it allows for the transfer of information from the applicant to the employer. Third, it permits the assessment of the candidate.

Interviews should be structured to ensure uniformity, she continued. Doing the interview the same way every time helps the interviewer stay on track, ask questions in a legally defensible manner and make sure "integrity" questions are asked of all candidates.

Checking an applicant's references is more difficult today than it was in the past, said Houston.

"Credit unions cannot just pick up the phone and ask about a person anymore. Don't use the 'R' word, because people get defensive if you say you are asking for a reference. Start with easy-to-answer questions and build up."

Employment references should be used for two things: verification of factual data from the application, such as starting and ending dates of employment and the position held, and an attempt to get qualitative information regarding the person's job performance. Personal references - from someone familiar with the applicant in settings other than a job - are for questions about the person's character.

"Verification is critical," said Houston. "It eliminates unexplained employment gaps, and it allows a credit union to hire based on facts, not instincts."

If the applicant requests his or her current employer not be contacted, that is acceptable, she said. "But what's fishy to me is when the applicant doesn't want me to call past employers."

When speaking with a job seeker's past employer - especially if the direct supervisor is talking - listen carefully for vocal clues, Houston said. "They might not say much in words, but their inflection might say a lot."

As with the other portions of the pre-employment screening, an audit trail is important. Houston said CUs should use a standardized form for documenting reference calls, including attempts that are not returned.

"It is not enough to simply look for the proper skill set, experience and a good fit," appraised Houston. "Credit unions must find out if there are good reasons not to hire someone."

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