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Protect Profits, Avoid Theft By Screening Applicants


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Roland Burt, owner of Burt’sTires, had a problem. His latest inventory showed a shortage of $12,000.


Burt knew other small-businessowners who ignored employee theft and eventually had to close their businesses.


He had his 12 employees completean investigative questionnaire for shortages. Analysis of the questionnairespointed to two employees as the culprits. One of the thieves was named Fred.Fred was recommended for employment by one of Burt’s friends. Burt meant tocheck Fred’s background but got busy and forgot. Instead, he gave Fred a quickinterview and put him to work.


Burt ended up firing both culpritsbased on petty theft admissions and rules violations. Then he began to wonderhow he might prevent future theft problems.


Obtaining information about yourjob applicants is the key. Preventing employee theft is just one benefit.Reduced turnover, better job performance, less absenteeism, and improvedcustomer service are others.


Qualified job seekers don’t stayunemployed long. If you can make conditional job offers to top candidatesduring their first visit, you’ll hire more of the best.



There are two basic sources ofinformation about job applicants. The first is the applicant himself. Use theright screening tools, and he will provide much of the information you need.


The second includes outsidesources, such as criminal record checks, credit reports, drug tests and workreferences. This information, though less readily obtainable, is equallyimportant.


Here are seven steps to help youmake better hiring decisions.


Step 1: Have each applicantcomplete a thorough employment application. But, remember that all employmentapplications are not created equally! A comprehensive employment application isworth its weight in gold. Most applications are too brief, failing to ask manycritical questions. If you think your employment application could be improved,obtain a copy of the Ultimate Employment Application from


Step 2: Give the applicant an“Answer Truthfully” speech. Job applicants are more likely to answer yourquestions truthfully if you tell them why they should. Instead of saying,“Here, fill out this application,” tell the applicant something like this:“Jake, I’d like you to fill out this employment application. Please take yourtime. Make sure your answers are truthful, correct, and complete. We will checkall your answers for accuracy. Answering all questions truthfully will increaseyour chances of getting hired. We’re not looking to hire perfect people, justemployees who tell the truth.” Will this speech magically persuade everyapplicant to answer every question truthfully? Of course not. But, applicantswill give you many more truthful answers with this speech than without it.



Step 3: Have the applicant take agood pre-employment honesty test. Expect dishonest people to apply to work foryou. It’s the ‘honey-attracts-bears’ principle. Your store will attractdishonest people who hope to become your silent partners. A good pre-employmenthonesty test can tell you an applicant’s likelihood to steal from your company– and much more. You can administer the test during the applicant’s initialvisit, score it on the Internet in minutes and use its follow-up questionsduring the initial interview.


The best pre-employment honestytests include:

• Three types of questions abouttheft – theft admissions, theft attitudes, and behavior in hypothetical theftsituations.

• Questions about other importantareas, such as work attitudes, work history, customer service attitudes,current alcohol and drug use and undetected crimes.

• Validity scales to identifythose applicants trying to ‘beat the test’ by answering falsely to makethemselves look like saints.

• A post-test interview worksheetin addition to test scores. The worksheet is a printout of questions answered‘wrong’ with suggested follow-up questions included. The follow-up questionshelp evaluate the seriousness of the applicant’s admissions.



Step 4: Interview the applicant.Steps 1, 2, and 3 will wash out many undesirable applicants. Then, you caninterview those still in the running. But, before the interview, review boththe application and pre-employment honesty test results, making notes about anyanswers you want to follow-up on.


Begin the interview by brieflyintroducing yourself and your tire business. Candidly explain the negatives aswell as the positives of the job you are seeking to fill. Make sure he is stillinterested after hearing the job’s negatives. This step decreases yourturnover.


Next, talk with him about hisprevious jobs – those he liked and those he didn’t. Obtain clear and logicalexplanations of why he left each job in the past five years. Make sure heexplains any gaps between jobs. These gaps often conceal unfavorable short-termjob experiences or incarcerations. Try this approach: Ask about previous jobs,beginning with the most recent and working backwards. Question him as if he hadwritten nothing in the work history section. Here’s an example of a typicaldialogue:



Interviewer: “Please tell me aboutyour most recent job.”

Tim: “Well, I didn’t list it. Ionly worked there three weeks. Dooley’s Supply.”

Interviewer: “Why did you leave?”

Tim: “They said I was coming to worklate.”

Interviewer: “How often?

Tim: “Just once or twice a week.”

Interviewer: “Before Dooley’s,where did you work?”

Tim: “The one I put on myapplication.”

Interviewer: “Which one was that?”

Tim: “Uh, Summit Tire Shop, Ithink.”

Interviewer: “When did you workthere?”

Tim: “Same dates I listed.”

Interviewer: “And those dateswere…?”

Tim: “I can’t remember exact datesright now.”

Interviewer: “You filled thisapplication out 10 minutes ago. You remembered then.”

Tim: “You’re trying to intimidateme!”

Interviewer: “No need to getupset.”

Tim: “I’m not getting upset! Don’ttry to mess me over!”

Interviewer: “Okay, Tim. Thanksfor coming in today.”


Tim could benefit from HonestAbe’s advice: “Tell the truth, and you won’t have to remember so much.” Tim wasa job hopper with an anger management problem. He couldn’t begin to rememberall of his jobs.



Step 5: Conduct a do-it-yourselfcredit check. With the applicant’s consent, conduct an Internet search under“free credit report.” Print two copies of the applicant’s credit report – onefor him and one for you. Compare his starting pay with his debts and reasonableliving expenses. This comparison will tell whether he can afford to work foryou. Employees whose installment debt plus expenses exceed their income have amonthly shortfall to make up. Some will steal to make up that shortfall.


Step 6: Conduct quick and easycriminal record checks. Tell the applicant that he can shorten the hiringprocess if he stops by the nearest police station, obtains a copy of hiscriminal record and brings back it to you. Few applicants who have criminalconvictions will return. They will seek employment elsewhere instead.


However, there are a few drawbacksto criminal record checks. Experts claim that criminal record checks fail toidentify at least 30% of applicants with criminal records. Why? Because mostemployees who steal are not caught, and most employees caught stealing are notprosecuted. Plus, many employees who are prosecuted are not convicted. Thus,few employees who steal from their employers end up with criminal records foremployee theft.



Still, you can’t ignore theadvantages of criminal record checks. If record checks miss 30% of applicantswith criminal records, that means that they do identify 70% with criminalrecords. A 70% batting average is still pretty good.


Criminal record checks are farmore likely to reveal scofflaws – people who ignore or disregard the law – thanconvicted felons. Scofflaws often have multiple misdemeanor convictions. Forexample, one applicant was cited five times for littering and three times forreckless driving last year. He would probably ignore your company’s rules.


Step 7: Check the applicant’sreferences – both previous employers and personal.


Many human resource departments atprevious employers will provide only minimal information about formeremployees. If possible, call the applicant’s previous supervisors. Previoussupervisors typically feel willing to help former employees who did good jobs.Most supervisors can be coaxed into giving a reference.


Here’s one technique:

Reference Checker: “Mr. Edwards?Al Johnson has applied to work for us here at Big Chain Tires. Al said heworked for you from February 2003 through June 2004. Is that correct?”


Supervisor: “Yeah, that’s aboutright.”

Checker: “Was his performancegood, fair, or poor?”

Supervisor: “The lawyers say Ican’t answer that one.”

Checker: “He was that bad, huh?”

Supervisor: “No! Al did a realgood job for me!”

Checker: “Thank you, sir. Iappreciate your time.”


The reference checker confirmedthat Al was a good employee. If the reference checker were to ask, “He was thatbad, huh?” and got only stone silence from the respondent, that’s a badreference. Just be patient and listen carefully.


With personal references, thereare a few questions on employment applications that often yield betterreferences than those the applicant lists himself, including:


• “Have you ever worked for ourcompany before?” If so, find out the name of a former co-worker or supervisoryou can talk with about the applicant.



• “Do you have any friends,relatives or acquaintances who work for our company?” Current employees whoknow the applicant can be very helpful.


• “Have you ever been convicted ofa criminal offense as an adult?” If so, his probation or parole officer mightprovide some background.


Some frustrated reference checkersclaim that individuals named as personal references will never say anythingnegative about the applicant. Not so! Asking personal references the samequestions you ask work references can yield intriguing results. For example:


Reference Checker: “Mr. Smith?Steve Sauder listed you as a personal reference on his application to work forus here at Blake’s Tires.”

Smith: “Yeah, I’ve known him sincechildhood.”

Checker: “I don’t have hisapplication in front of me. Where’s he working now?”

Smith: “Nowhere since they laidhim off from Jerry’s.”

Checker: “Where was that?”

Smith: “Jerry’s Car Wash.”

Checker: “Why did they lay himoff?”

Smith: “Said he was smoking potduring work. But it was on his own time – his lunch break.”

Checker: “Is he on probation orparole now?”

Smith: “No, he finished that lastyear.”

Checker: “What was the charge?”

Smith: “You’d better ask him thatone.”

Checker: “Thank you, Mr. Smith.”


In closing, establish a mandatoryapplicant screening procedure, starting with a comprehensive employmentapplication and a pre-employment honesty test (for examples, go Make sure all steps in the hiring process are followedon every applicant you hire.



Hiring the best applicants willmake your life easier and profits increase. Hiring undesirables will cost yourcompany money and make your life miserable. You can reduce employee theftdrastically and protect your profits. Just follow the seven easy steps.

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