Employee screening: methods of employee screening

Section three of the Personnel Today Management Resources one stop guide on employee screening, covering: the advantages associated with each of the different methods of employee screening available. Other sections .

Use this section to Find out about psychometric tests, using vetting agencies and CV checking software Examine how these different methods are used and what they can do for your organisation

Psychometric testing

Psychometric testing as a method of vetting employees is widely used and is becoming increasingly popular, particularly for managerial, professional and graduate vacancies.

Some 27 per cent of employers surveyed by the CIPD had increased their use of personality questionnaires since 1999.¹

Psychometric tests can be administered in-house or by an external agency. They are usually used as an additional tool in selection rather than as the main mechanism, aiming to develop a rounded and objective picture of the candidate to assess whether they fit the vacancy in question. Organisations tend to buy in tests as and when required, and do not tend to use them as a first line of screening. Testing is increasingly done online. A growing number of employers opt to use psychometric testing at the pre-selection stage to help them sift through large numbers of applicants, particularly in graduate recruitment.

Benefits

The benefits of online testing are:

Automating the selection process

Saving time and resources

More fair to candidates whose strengths may otherwise have been missed

Apart from basic numeracy and literacy tests, there are two types of tests:

Aptitude

Personality

Personality tests are controversial in terms of their ability to measure personality. They typically measure psychological dimensions such as:

Extroversion

Emotional stability

Openness to experience

Conscientiousness

Agreeableness.

Character trait questionnaires, such as the widely used 16 Personality Factor Question-naire (16PFQ), originally developed by the Institute for Personality and Testing, can be useful as it presents a hypothesis about an individual by looking at their method of tackling an issue and measuring the result. The 16PFQ offers indications of to what extent an individual will follow external or internal rules of behaviour. It also measures ability and strategies for coping with pressure.

Screening for honesty

It is still very early days in terms of testing for honesty. So far, there are no foolproof tests for honesty, and UK employers are not fans of using lie-detector tests in the workplace. US employers are much more likely than their UK counterparts to go for tests aimed at identifying potentially fraudulent employees.

There are tests that aim to assess integrity, such as the one developed by Centurion Partnership. Integrity tests are most commonly used for high-profile security work and in industries with theft problems. Some companies believe them to be useless, claiming that reasonably intelligent applicants would be able to manipulate their answers.

Test developer Qwiz, which has a base in the UK as well as the US, offers US clients a product called Qwiz Vantage.

This product, not included in Qwiz´s UK range, purports to identify candidates whose behaviour, attitude and work-related values may interfere with their success as employees, helping employers learn how likely a candidate is to engage in counterproductive behaviour at work.

The US-based Institute for Personality and Testing also offers a product called Protective Services Report (PSR). PSR is aimed at employers recruiting into high-risk positions of trust, such as law enforcement and security. PSR assesses characteristics such as emotional adjustment, integrity and control, as well as intellectual efficiency and interpersonal relations.

But developing integrity tests is a tricky business. One of the problems is that questions have to be transparent and face-valid. PSL looked at developing a test for honesty but abandoned its plans concluding that tests tended to be too vague or only likely to identify very dumb criminals.

Advantages of psychometric testing:

Provision of information that is hard to get anywhere else, such as indicators for candidates' potential performance

Putting the control in the hands of the recruiter, as opposed to processing CVs in which the applicant chooses what information to include

Objectivity, therefore less discrimination

Can speed up decision-making process

Can help automate selection process

Can be done online

Helps draw up manageable shortlist of candidates, particularly helpful if dealing with large numbers of applicants.

Disadvantages include:

Difficulties in achieving workforce diver-sity because recruits will have similar traits

Different ethnic or gender groups may perform differently

Efficacy can vary with some tests.

Equality

Employers need to watch out for indirect discrimination when using tests. The Equal Opportunities Commission (EOC) Code of Practice warns that differences have been found to exist between the responses of men and women to some commonly-used psychometric questionnaires and that some personality questionnaires can also indirectly discriminate on grounds of sex. Careful selection of personality questionnaires is therefore important.

Relate tests to job requirements

Both the EOC and the Commission for Racial Equality's (CRE) codes state that selection tests should be specifically related to job and/or career requirements, and should measure an individual's actual or inherent ability to do, or train for, the work or career. Tests should also be reviewed regularly to ensure they remain relevant and free from any unjustifiable bias, either in content or in the scoring mechanism.

The CRE's code says that employers should examine tests to make sure they do not contain irrelevant questions or exercises on matters that may be unfamiliar to ethnic minority applicants, or general knowledge questions on matters more likely to be familiar to indigenous applicants.

There are also differences due to socio-economic backgrounds. Making sure cut off points are not too high helps address this.

Disabled applicants

To comply with the DDA, you should look at whether you need to make any 'reasonable adjustments' to testing procedures to accommodate applicants with disabilities. These can include changes to the:

Testing environment

Format of tests.

Consider, for example, giving a person with restricted manual dexterity an oral rather than a written test. Also consider that routine testing of all candidates might discriminate against particular individuals or substantially disadvantage them. You may need to look at how you assess results to take account of specific disabled candidates, such as accepting a lower pass rate.

Be flexible and make allowances. You might consider waiving the requirement for a numeracy test for a person with a learning disability who does not achieve the required level if the job does not entail much numerical work, and the candidate is otherwise suitable. Or you might give an applicant with a bad stammer more time to complete an oral test, or do the test in written form if oral communication is not a key requisite for the job.

Training

The Employment Practices Code recommends that psychometric tests are only carried out and interpreted by those who have received appropriate training. Questionnaires should be well designed, and measured and interpreted by someone who has been trained to do so and who understands all the legal and ethical issues involved, increasing the efficacy of such tests.

Cost

Online testing is particularly cost effective.

Generally speaking, tests can work out as little as £2 to £5 per candidate. OPP estimates that tests cost about 5 per cent of the total cost of selection. Organisations do not generally buy in tests en masse. You do need to factor in the cost of training someone to be able to administer and interpret the tests. Training takes nine days with OPP and costs £5,000 including hotel bills. But bear in mind that there should be savings in time and resources allotted to interviewing unsuitable candidates. And savings in not having recruited someone who later turns out to be unsuitable.

Validation

Most providers of psychometric tests will offer validation research results to back up their claims of the effectiveness and object-ivity of their tests. But it is also advisable to carry out extensive in-house research.

Cheating and over-familiarisation

With online testing, there is obviously a higher risk of cheating. Test providers such as PSL disable the toolbar so that candidates cannot print tests, making it harder for them to get someone else to do it for them.

Employers increasingly build in honesty agreements with candidates, pointing out that they will be re-tested at a later stage in the selection process.

One of PSL's clients said that out of 800 candidates tested online, less than five were subsequently found to have cheated. Making candidates aware they will be re-tested will stop the employer wasting time with unsuitable candidates. Obviously, if a candidate fares badly second time around, warning bells about their honesty will sound.

To get around the problem of candidates becoming increasingly familiar with tests, such as in the case of a graduate doing the rounds with a number of employers, providers PSL and SHL have introduced randomised - item banked - tests. Questions are selected randomly so the candidate will never know what they will be asked. The odds of someone getting the same test twice are 70 million to one against, according to PSL, which introduced this approach in 2003.

Checklist

Select psychometric tests carefully

Make sure tests relate specifically to job requirements

Review tests regularly to rule out bias in content and scoring

Make sure cut-off points are not too high

Carry out in-house research into validity

Make sure tests are delivered and interpreted by someone who has been trained to do so

If tests are carried out online, make sure candidates are re-tested to avoid cheating.

Agencies

Traditionally, UK companies have not tended to use vetting agencies. In 2002, IRS found very few organisations using checking, screening or vetting agencies.² Just one in seven organisations were found to be using an agency, mainly the Criminal Records Bureau (CRB).

But the tide does seem to be turning, and there are a growing number of investigation companies in the UK, such as The Risk Advisory Group, CV Validation, Experian and the Control Risks Group, which can offer services linked to the verification of candidates' data.

Why employers use vetting agencies

Employers tend to employ the services of vetting agencies to:

Save time in the vetting process

Carry out thorough checks and reduce the chance of missing something vital

Help them develop fraud control policies.

Carrying out extensive checks of employees can unearth all manner of discrepancies and can save the company from being the victim of fraud. Many organisations also use vetting agencies to check out existing employees and to help them set up policies to reduce the risk of similar perpetrations in the future.

Control Risks Group worked with one UK financial services company who had a senior member of staff forging line managers' signatures on payment requests, obtaining cheques payable to personal credit cards. Some £200,000 had been stolen when Control Risks Group was called in. The investigations company discounted any collusion between employees and identified fraud control weaknesses to help.

Seeking permission

Written permission should be obtained from the applicant before embarking upon an investigation. They should also be shown the final report, giving them a chance to refute information. Checking should be propor-tionate to the role under the DP Act.

Services

Checking services offered by agencies range from obtaining standard references to qualification checking, credit checks and verifying home addresses. Details of bankruptcies, present and past directorships, media coverage of the person, membership of professional bodies, and confirming dates of birth are on offer.

The first step is to verify identity, checking original documents, such as a passport.

A number of checks will then be carried out such as checking qualifications, professional memberships and taking references from previous employers. Any anomalies or discrepancies, such as claiming to have a 2:1 degree instead of a 2:2, will be highlighted to the employer.

Details checked will include exact dates of employment, position held, salary, duties, assessment of their honesty and ability to do the role concerned, whether they chose to leave and whether the employer would re-hire the person. It may well be appropriate to carry out detailed telephone interviews with former line managers, of up to 30 minutes, to verify candidates' competency and achievements. Responses are then measured against whatever the candidate has said on his CV or in an interview.

A credit reference check might be carried out if a role involves handling cash or dealing with accounts. This type of check could be seen as too heavy-handed for a post such as secretary. Some employers want an electoral roll check to verify previous addresses, which can show up a county court judgment, lies on CVs, or problematic previous jobs.

For senior management roles, court records might be checked to see whether the candidate has taken action themselves or has been sued in the High Court. It might be necessary to look fully into candidates' career histories and business acumen spanning over the previous 10 to 15 years, looking at any press coverage for high-level posts, checking they do not appear on a database of suspected money launderers.

Standard checks can take up to five days but are much longer when rigorous checks are required and warning bells go off.

When use is appropriate

Using investigations agencies can be particularly helpful when a lot of checking is required, such as for roles involving handling large sums of money or where security is a high priority.

Cost

Expect to pay around 0.5 per cent or so of candidates' annual salaries.

A basic screening assignment can cost less than £100. For more senior positions, it will cost between £300 to £400. A comprehensive investigation of an international finance director or chief executive for a multinational could cost £10,000.

Checklist

Seek applicants' consent

Give applicants chance to refute findings

Make sure checking is proportionate to role to comply with DP Act.

CV checker software

The use of automatic CV screening has been slow to kick off but usage is picking up as technology in this area improves with better interfacing between databases. Employers tend to outsource rather than buy in systems.

In 2001, only 9 per cent of more than UK companies were considering installing automatic CV screening, with another 2 per cent already having systems in place, according to research.³ Of recruitment consultancies surveyed, 12.5 per cent used CV screening software, with 75 per cent planning to install it.

Before going down this route, make sure:

the service is data protection compliant

you obtain candidates' consent.

Organisations such as Experian offer automated screening systems. Experian's Candidate Verifier links information with state-of-the-art electronic information transfer technology, allowing you to put in the candidate's details and receive initial reports immediately.

Experian's employer reference check confirms dates of the candidate's employment and positions held, along with the reason why they left the position and a basic character assessment if available.

The standard financial report checks the electoral register to verify the candidate's current and previous address, confirms their date of birth, checks publicly available data to reveal any adverse information on county court judgments (CCJs) and bankruptcies at current and previous addresses, checks whether the candidate holds any current or previous directorships or has been disqualified at some stage.

Add-on services include carrying out a higher education check to confirm which one was attended, in which subject and with which grades; a secondary education check, looking at grades and qualifications, and checking membership on industry bodies.

Cost

Employers using Experian's Candidate Verifier pay an annual subscription fee of £130 to gain access to the online service, application input and process software. Standard financial checks, which confirm names, addresses, dates of birth, check for adverse data such as CCJs and bankruptcies, and include current and two previous addresses, cost £6.25. Undisclosed addresses can also be checked at £3.05 per additional address. Employer reference checks that confirm dates of employment and positions held cost £11.46 per employer. Secondary education checks, which confirm qualifications gained with grades achieved, also cost £11.46, as do professional membership checks.

References

¹CIPD survey, 2001

²References: the check's in the post , IRS study, 2002

³Survey of more than 300 UK companies and 580 recruitment consultancies by HR consultancy Effective Resources, 2001