MANAGING RISK WHEN HIRING NEW EMPLOYEES

RC: Could you briefly discuss some of the key challenges and risks associated with hiring new employees? What mistakes do firms commonly make during the process?

Oldham: The primary challenges and risks are not verifying backgrounds, credentials, experience and education. Essentially, you don’t know what you don’t know. So, performing a background investigation is necessary.

Hale: There are at least three areas where we repeatedly see problems arise. First, an employer should know those it hires. An employee with performance problems is often the result of a hiring process that was incomplete, insufficiently rigorous or both. An employer has a number of tools at its disposal. It can direct its interviewers to focus clearly on how well an applicant’s established skill set meets its needs. It can conduct reference checks that also focus on the skill sets applicable to the position. It can use social media, as long as it does so without pretexting or misusing information from social media sources. It can get further background information through a background check. There is considerable scepticism about the utility of each of these tools in isolation, but by using all of them in a focused and rigorous manner, an employer can be in a better position to identify the best candidates. Second, employers should make sure that interviewers know some basic employment discrimination rules that apply to hiring. Legal claims arising from hiring decisions most often are based on statements made in interviews. The most challenging aspect of the law that affects interviewing concerns disability-related questions. With very limited exceptions, interviewers should not ask about medical problems or workers’ compensation absences.

Jul-Sep 2014 Issue

1stWEST Financial Corporation

Goodwin Procter LLP

Littler Mendelson

Norton Rose Fulbright

Skadden, Arps, Slate, Meagher & Flom LLP