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Do You Have a Skeleton In Your Closet?

3.22.2011

Years ago, a background check for a public company Board search revealed a candidate was the subject of a shareholder lawsuit. Although the suit was clearly frivolous, the Board believed that it could not overlook the incident because of its public perspective and did not move forward with the individual.

The opposite happened with a search for a VP of Human Resources. Our background check showed that the individual had declared bankruptcy-not once, but twice. Dead issue you assume? Not so. Our client was open to hearing the candidate's explanations (a nasty divorce and a failed business partnership), and did not believe the bankruptcies would impact his performance. The Client hired the executive, and three years later both client and candidate remain extremely happy with the decision.

And to confuse things even further, we recently completed a senior level executive search where the background check revealed the candidate had unpaid traffic tickets and a poor credit rating. Further discussions with the candidate revealed that the credit bureau had confused the candidate with another "Jane Doe" and, as we and the client expected, the candidate's record was pristine.

Background and reference checks are the crucial final steps in any executive search process. No matter how thorough the interview process has been, candidates are assessed for a relatively short period of time in comparison to their total career performance and history. Employers have become increasingly concerned about mitigating risk, and conduct their due diligence through background and reference checks to avoid negligent hiring. Employers are concerned that a person who has used poor judgment in the past will have the propensity to make the same mistakes again.

Background checks uncover a broad spectrum of a person's behavior, including employment and credit history, motor vehicles record, civil court actions, "deadbeat parent" and various abuse registries, military history, drug and alcohol test results, immigration records etc. References address professional performance, strengths and weaknesses, cultural fit with the organization and character of the individual. If a person used poor judgment and was accused or convicted of a crime at a young age, does that mean this individual can't have learned from his or her mistakes and become a responsible, ethical contributor to an organization? society? People can change, especially if the indiscretion was long ago, but employers are often reluctant to take that leap of faith.

While executives make mistakes, credit bureaus and other institutions who maintain our records do as well. All of us in the executive search field recall incidents along the way where a lab inadvertently mixed up names. A false credit report could lead an employer to the misinformed conclusion that the potential candidate has an overdrawn bank account and has defaulted on his or her mortgage.

What is the solution?

Advice for the Employer

1) Always do your due diligence and conduct background and reference checks, looking for consistency in your findings to address areas of uncertainty. The background and reference check process should be fully transparent. For example, many employers have an expanded network to check additional references other than those provided by the potential candidate.

2) While references certainly need to be valued and properly weighed as part of the decision making process, they also need to be factual and not just hearsay. It would be a real disservice to the individual, as well as the potential employer, if the employer makes a hiring decision based upon unconfirmed information and doesn't give the candidate an opportunity to address whatever issue has been raised.

3) Be educated about the process and open when learning negative information. Communicate your findings to the candidate so he/she can provide an explanation. Perhaps there were extenuating circumstances regarding a first and only misdemeanor offense or a bad credit report. Perhaps the information is not correct? If it is correct, does the negative data have any relevance for the particular role for which the individual is a candidate?

Advice for the Employee

1) Disclose any troublesome issue when it appears that an offer is going to be made and BEFORE reference and background checks begin. If a potential employer discovers a candidate was dishonest or neglected to share information that will surface in a background investigation, the employer may deny the candidate the position based solely upon the lack of honesty or failure to be forthcoming rather than on the negative information uncovered.

2) Run a background check on yourself so you won't have any surprises; knowledge is the best offense. National credit bureaus provide free annual credit reports. The Fair Credit Reporting Act also gives you the right to have access to additional specialty reports that cover your check writing history, employment history, medical history and insurance claims, etc.

3) If you explain your past mistake and express your enthusiasm about the role, you might be pleasantly surprised and receive a positive reaction from the employer.

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