As you begin recruiting and interviewing employees, you'll obviously be drawn to certain candidates because of their experience, educational background and personality. While it's easy to make a decision based on what you see in front of you, it's wise to consider what may be hidden from view, too.
Small businesses, unfortunately, are particularly vulnerable to embezzlement and other kinds of employee theft because they lack the checks and balances of big corporations. One report by the Association of Certified Fraud Examiners found that the median loss for small firms with fewer than one hundred employees was $190,000. The most common schemes? Employees fraudulently writing company checks, skimming revenues and processing phony invoices.
You can increase your chances of avoiding problems— and spotting dishonesty— by beefing up your hiring practices. Here's how to do it.
• Use a formal job application. Take a page from corporate America's book and supply job candidates with an application that requests full name, address, education, employment record (with years) and references. An application that includes all of this information can give you a clearer picture of someone's background than, say, a resume that he or she provides. Also, it's wise to state on the application that supplying false information can lead to dismissal. Documentation can help protect you in the event of an employee lawsuit.
• Ask tough questions. Carefully review the application, and during the in-person interview, ask probing questions, especially about gaps in employment. A candidate may certainly have any number of innocent explanations (such as attending school, reevaluating his or her career or caring for a child or other family member), but gaps between jobs can indicate an inability to hold down a position, a sudden dismissal or, at worst, a prison stay. Arrange for others at your company (or a trusted advisor, if you're a solo entrepreneur) to meet the person as well; getting a second or third opinion to confirm your impressions will help you make more solid hiring decisions.
• Call former employers and check references. Often, former bosses don't want to provide too much negative information, for fear that they could be sued for defamation. At the least, you should be able to verify the person's employment history and salary history. The best question to ask a former employer is simply, "Is this person eligible for rehire?" If the answer is no, that's a definite red flag.
• Perform a background check. Preemployment checks can screen out applicants who may be unfit (or dangerous) for your workplace because of a criminal record. Some states may require that employers in certain industries— say, child care or health care— conduct background checks. A background check also can confirm the accuracy of information that the candidate provided on the application. While a background check isn't necessary for all employees, it's smart to conduct one on a job candidate who will have access to sensitive data or your company's finances. The Fair Credit Reporting Act, which sets standards for employment screening, requires that you get consent from a potential employee before conducting a background check. Check the FTC's website to make sure you are in compliance. Also, you don't want to run afoul of state or federal laws concerning the kinds of information an employer uses to make employment decisions. If you do perform a background check, ask a business owner or your attorney for a referral to a reputable firm.
• Invite a potential hire for a paid tryout. You can learn a lot about potential employees, including how well they fit into your small business environment, by inviting them to work on a test project or spending a trial run in your office. A tryout may be a particularly good way to test an applicant's technical skills— say, a proficiency with a type of software— and may reveal far more than a reference or background check.
Source :- The Wall Street Journal, By Colleen Debaise
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