Mr. Background Check’s Checkup

Screen Shot 2014-10-07 at 2.51.03 PMScene: Antiseptic, hospital room filled with the latest diagnostic equipment. Mr. Background Check lies happily in bed, not a care in the world. By his side are his nurse and doctor.

Nurse cheerily: Good morning Doctor. How is Mr. Background Check today?

Doctor checking an exam chart: Well, let’s see … no heartbeat, no pulse, no brain waves

Nurse raises back of hand to mouth: You mean he’s …

Doctor interrupts: No, no, Mr. Background Check is alive and well.

Nurse: But how can that be? With no brain waves I’d have predicted he ‘d be (pause) gone.

Doctor: No surprise really. We could never predict very much from the information we get from Mr. Background Check

Nurse: Then why do we collect the information?

Doctor pauses, then angrily: Because we always have. That’s why.

Stage direction: Doctor quickly exits stage left in a huff. Nurse looks at Mr. Background Check, shrugs her shoulders and exits stage right.

Do you rely on the information garnered in background checks to make employment decisions? Most of us do. But, the research on selection methods’ ability to predict job success puts background checks near the bottom of the list.

For example, Koppes and Palmer in 2012 found “no relationship” between credit report data and performance. Other studies show that reference checks only account for about 4 percent of the variance in employees’ performance.

Most arguments in favor of the status quo in background checks go like this: “I only want honest people on my team.  After all, isn’t it just common sense that a candidate who lies on his or her application or resume will be an employee who lies?” Not necessarily. Our common senses tell us that the sun revolves around a flat earth. Common sense can be a false guide. We need to rely on objective evidence of what works in predicting employment outcomes.

Unfortunately, much of what we read on background checks are cautionary tales. So and so lied on their application, and despite 20 years of sterling performance he/she was fired. A case in point is a September 18, 2014 article that appeared in the NY Post but was first published in Marketwatch. This article tells of five executives who were terminated when it was discovered that their resumes contained inaccurate information. Some of these leaders had decades of presumably good performance before their secret was discovered. They lied on their resumes and they performed well at the executive level?

This is just one anecdote that illustrates a bigger point: If lying on your resume or application doesn’t predict employment outcomes, then why are we using background checks to make employment decisions?

If you are conducting unstructured interviews or are not employing a validated assessment test, then you can get a higher level of predictive validity from your hiring process by investing in those tools than in paying for or engaging in background checks.

Background checks are not going away. So, the question: is how can we make them more valid predictors of employment outcomes? The answer is important, because if we don’t address this issue, the government will do it for us.

First, we need to differentiate between a “misrepresentation” and a “lie.”

Wood, Schmidtke, and Decker, in a 2007 article appearing in the Journal of Business Psychology, said that there are three components to a lie:

  1. The statement must be an intentional act
  2. An overt statement is not required (lies of commission {telling a lie} and lies of omission {leaving a substantial fact out} both count as lies)
  3. The false statement must be material to the employment decision

Liars Quiz:

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Mary stated on her application for employment as a Senior Dog Walker that she has an AA in Outer Mongolian Studies. A subsequent background check revealed that she attended classes, had 25 credits, but no degree. Did she lie? Yes____ No____

Answer: No. Mary’s education is not material and therefore not a lie.

Materiality is the key to increasing the background check’s value. Material information is that information upon which we make our employment decisions. If you don’t need a degree to do the job then the degree is not material.

This means:

  • Only verify education and employment that is directly related to the job for which the candidate has applied
  • Conduct credit checks only when the position requires a significant fiduciary responsibility
  • Conduct a motor vehicle check only when a driver’s license is truly required of the job
  • Reference checks that throw back to Downtown Abbey days should be conducted using validated, structured interview items
  • Conduct thorough criminal checks. We owe our employees and customers a safe environment. But be judicious on how the results impact the employment decision. Old convictions without any evidence of recidivism are not strongly predictive of employment behavior.

One final thought:

Candidates misrepresent their backgrounds for a pragmatic reason. They want to get hired. When we: publish invalid or unvalidated job requirements; pass over candidates who have been unemployed too long; or question the “energy“ of older workers; aren’t we encouraging misrepresentations? Aren’t we a cause of the problem?

John Miraglia
John Miraglia is an organizational effectiveness professional with expertise in recruitment, applicant assessment and talent reviews, performance management, and learning and development. He has extensive experience in the financial services industry. He resides with his family in central New Jersey.