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Growing demand for firms providing pre-employment screening
The UAE may gradually move to introduce mandatory background checks on job applicants in the financial services sector, many experts believe, as the sector grows to place more emphasis on compliance to an increasing list of regulations.
However, many human resources (HR) departments remain unequipped to conduct thorough application screenings, placing demand for third-party service providers.
“Using third party service providers is not yet common practice despite a large percentage of HR departments not being equipped to conduct detailed pre-employment screenings. This is despite the obvious benefits and cost saving of reducing the risk of recruiting the wrong employee,” said Annalinde Nickisch, an HR consultant at The Thought Factor in Dubai.
She added that many companies have few HR personnel handling everything from payroll to recruitment, meaning reference checks are often not thorough enough and are undocumented.
Nickisch said hiring a new employee without having a complete picture is an uncalculated risk that is now becoming even costlier after the recent change in the UAE for businesses to provide mandatory medical insurance to employees.
“Though most companies with established HR Departments conduct reference checks, the depth in which pre-employment screenings are conducted varies significantly from organisation to organisation. Whilst some employers merely validate the previous employment and the performance of the candidate, others conduct additional screenings such as extensive social media reviews, or a criminal history check,” she said.
According to estimates by the US Department of Labour, a bad hire can cost employers 30 per cent of the employee’s potential first year earnings. This would put the cost of a bad hire of an employee who makes, say, Dh10,000 a month (or Dh120,000 per annum) at Dh36,000 - and that’s just one bad hire.
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