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Digging up the dirt
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February 2, 2000: 7:20 a.m. ET
Employee background checks are on the rise, a boon to private investigators
By Staff Writer Hope Hamashige
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NEW YORK (CNNfn) - Think you know your employees? Certain they're not going to take from the company till? Or worse yet, that they may be prone to violence?
Fueled in part fueled by headlines about workplace violence and in part by their own problems with employees, more and more employers are turning to private investigators to make determinations about who will be a good, productive and trustworthy employee.
The search for employment, according to private investigators like Sam Streiner, brings out some of the very worst impulses in people.
"Applicants lie," he said.
In nearly 30 years of checking backgrounds of potential employees, Streiner has determined that 32 percent of all job applicants lie to potential employers about their employment history, educational background or driving records. Of those applicants who have criminal records, 70 percent do not admit their crimes to potential employers.
That trust is on the wane is good news for those who conduct background checks for employers. At Pinkerton Services Group, the division of Pinkerton's Inc. that does employee background checks, business is growing by about 50 percent a year. Avert Inc. (AVRT: Research, Estimates) in Fort Collins, Colo., has seen its list of clients grow to 12,000 since it opened in 1986.
"It's insurance," said Jim Stover, Bristol Hotels and Resorts' director of safety and security. Bristol Hotels began investigating its employees' backgrounds four years ago, Stover said, because the company's managers were concerned about crime and opening themselves up to negligent hiring lawsuits.
A safer work environment
Workplace violence usually tops the list of reasons Pinkerton's clients initiate a background check program. Pinkerton's research, however, adds that digging into employees' backgrounds not only creates a safer workplace, but also halts high turnover rates and increases productivity.
The fallout of the largest negligent hiring lawsuit in legal history, settled in 1998, has been increased caution on the part of employers. Trusted Health Resources Inc. of Boston and the Visiting Nurses Association were successfully sued after one of its employees killed a patient.
The jury awarded the dead man's family $26.5 million in 1998 after concluding the company should have made an effort to discover that Jesse L. Rogers had a felony criminal record before he was hired to care for John P. Ward, who had cerebral palsy.
Rogers murdered Ward, then 32, and his 77-year-old grandmother at their home on Sept. 10, 1991.
Both Pinkerton and Streiner's A-1 Investigative Agency in Hollywood, Fla., said extensive, costly background checking isn't necessary in most cases. Rather, they recommend the background check fit the job.
If the job involves driving a company car, for example, then check out the applicant's driving record. But if the person is going to be working, unsupervised, with such vulnerable people as children, the elderly and infirmed, it is probably a good idea to make sure the job candidate has not spent time in jail.
In addition to employment history and educational background, an extensive background check will turn up personal credit information, workers' compensation claims, personal bankruptcies and any civil or criminal court filing. Most agencies also contact friends and relatives and interview them. Pinkerton and A-1 recommend extensive background checking only in cases of high-level, high-profile executives.
The bare minimum most agencies recommend is to have someone confirm employers' work histories, education and Social Security numbers.
Not everyone thinks the trend is a positive one. Discussions of employee background checks, drug testing and the like tend to infuriate advocates of employees' privacy.
The National Employee Rights Institute, while it believes employers should check references and employment history, has said that extensive background checks, so-called "integrity tests" and programs such as drug testing are humiliating and far too intrusive.
To which, Pinkerton spokesman Mark Leaf responded: "Employers have not only a right, but a vested interest to know about the people they are hiring."
Pinkerton's research reveals that 82 percent of the Fortune 1000 companies hire investigators to perform background checks of their employees. The smaller the company, however, the less likely it is to perform similar checks.
Something about the more intimate environment at a small business, said Fred Giles, group vice president at Pinkerton Services, makes employers think they won't have problems with their employees. Others think the cost is prohibitive.
Giles said the cost of checking varies from place to place, but that it is "well under $100." Streiner said the most basic check starts at $15 and goes up from there.
Asked whether he could describe a circumstance under which he would waive background checks, Giles conceded he might not suggest an employer check out blood relatives. After a little thought, however, he added, albeit hesitantly: "Actually, I might." 
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