Credit Reports in the Hiring Process: How to Bring Clarity to the Confusion
Employers use credit reports to assess a candidate s stability and their propensity to be dishonest or commit fraud. But this implies that the HR/recruiting representative understands how to analyze derogatory items on a credit report to determine whether they are the result of unfortunate circumstances or financial mismanagement. Oftentimes the interpretation tends to be a little off. According to a 2012 survey by the Society of Human Resources Management, 47 percent of employers use credit checks when hiring for some or all positions at their firms. Additionally, a national survey by Demos (a research center for economic issues) found that 1 in
10 job applicants were told they would not be hired for a position because of their credit. These statistics confirm the widespread use of employment credit checks in addition to the power they wield over hiring decisions. The complexities of interpreting credit reports can make this analysis difficult and result in a costly hiring process, and of course it could mean missed opportunities in hiring top talent. However, if we are able to truly understand the nuances of a credit report, it puts the employer in a better position to hire the best applicants and not exclude viable candidates thereby shortening the recruitment lifecycle, and likely benefits performance as measured by cost and time to hire, and other metrics. What to Do Where a bad credit history might be a disqualifying criterion, employers may want to consider factors like the nature and the gravity of the derogatory entries and the time elapsed before denying the application outright. Qualified, but unemployed, workers in particular can become trapped in a Catch-22: job-seekers are unable to secure work due to damaged credit and are subsequently unable to escape debt and improve their credit because they cannot find work, which in turn reduces the possibility that they may be hired for other jobs. Another extenuating circumstance is lack of adequate health insurance, which is often a contributing factor in unsustainable medical debt. In addition to unemployment and medical issues, there are countless other situations (divorce, natural disaster) which may be a reflection of factors outside of the candidate s control and not necessarily a reflection of their financial wherewithal. There may not be a linkage between these situations and a candidate s ability to perform assigned duties. The Case of Ms. Spoon Ms. Spoon applied for a job at a large corporation in St Louis, Missouri. The human resources representative really liked Ms. Spoon and she was one of three candidates in line for the job. Although she had a stellar resume, the hiring manager disclosed that they would need to pull her credit report and do a background check. Ms. Spoon, had been working with Justine Petersen (an organization that assists low-income individuals to develop, maintain, and increase financial assets) to improve her credit report and score. She knew that she had some past collections due to a previous period of unemployment. However, over the last two years she had always made her credit payments on time and had paid off many of the collections accounts incurred when she was unemployed. Unfortunately, the hiring manager told Ms. Spoon that due to the past derogatory items on her report, she would not be able to offer Ms. Spoon the job even though she is qualified and a top candidate. Not one to let an amazing opportunity pass her by, Ms. Spoon called Justine Petersen to ask for a letter on her behalf explaining why her credit report should not be used to exclude her as a candidate. The letter from Justine Petersen described to the hiring manager how Ms. Spoon had been working diligently on paying back her debts and how, by the time of the job interview, she had only three very old collections accounts left. The letter also noted that Ms. Spoon also had three positive, active lines of credit that she always paid on time. In fact, rather than filing for bankruptcy as an easy way out, Ms. Spoon was taking responsibility for paying off past creditors and maintaining good relationships with current ones but the credit report, as it was traditionally interpreted, would not have shown that. Ms. Spoon was hired for the job and has been working there for over three years now. She consistently receives high performance reviews. 管理新知 您可能感兴趣的文章 Create a Better “Candidate Planet” for Earth Day 2012-04-23 《HR Transformation》中文版面世 2016-12-02 为什么打卡？通过自我量化实现更好绩效 2015-09-11 最近文章 阿里为什么不去清华招人？
2018年01月15日 因利益冲突，Facebook COO和Twitter CEO退出迪士尼董事会 2018年01月15日 沪调整城乡居民养老保险有关标准 24日前可就近办理 2018年01月13日 易车网任命总裁张序安为 CEO 李斌卸任 2018年01月12日 IBM：3万职位面临调整 1万人或被裁 2018年01月12日 热门文章 阿里为什么不去清华招人？
2018年01月15日 2017年度职场出差行程调查，出差最多的居然是他们！！
2018年01月12日 员工在自己QQ空间评论HR经理吃屎，可辞退他吗？
2018年01月11日 年底招聘难的原因和对策 2018年01月11日 面试热问：“你期望的薪酬是多少？”面试官到底在问什么？
2018年01月11日 扫一扫 加微信【已隐去】 关于沙龙 顾问委员 广告推广 隐私安全 联系我们 申请vip会员 支付方式 市场合作或广告投放 电话：【电话已隐去】 邮件：【邮箱已隐去】 在线QQ【已隐去】 VIP会员 企业VIP会员 机构VIP会员 广告刊例 商务合作 Follow HRSalon