Pre-Employment Background Screening Guidance on Developing an Effective Pre-Employment Background Screening Process
FIL-46-2005 June 1, 2005
The FDIC is providing the attached guidance on developing an effective pre-employment background screening process. This process can be an effective risk-management tool by providing management with a degree of certainty that the information provided is accurate and that the applicant does not have a criminal background.
Used effectively, a pre-employment background screening process may reduce turnover by verifying that the potential employee has the requisite skills, certification, license or degree for the position; deter theft and embezzlement; and prevent litigation over hiring practices.
Institutions should verify that contractors are subject to screening procedures similar to those used by the financial institution. Consultants should be subject to the financial institution's screening process.
Management should develop a risk-focused approach to determining when pre-employment background screening is considered appropriate or when the level of screening should be increased, based upon the position and responsibilities associated with the position.
Costs are associated with developing and implementing an effective screening process. However, absent an effective screening process, a bank may incur significant expenses from recruiting, hiring and training unqualified individuals based upon their skill sets or backgrounds. These individuals may have to be replaced due to an inability to perform assigned duties or for other improper actions.
FDIC-Supervised Banks (Commercial and Savings)