In Human Resources, there's a simple rule when it comes to hiring employees: The best predictor of future performance is past performance.

For most employers, researching the candidate doesn't extend beyond checking a reference or two. But is that enough?

Probably not.

More and more often, employers are finding it essential to conduct extensive background searches on candidates. In addition to checking references, it may be necessary to find out if he or she has a criminal background, a drug history or if they lied about their education or previous employment.

About 23 percent of applicants screened have misrepresented their employment or education credentials and 8 percent have a criminal history, according to Blair Cohen, CEO of InfoMart, Inc., an employment screening company based in Atlanta. And, according to American Background Information Services, Inc., in Winchester, Va., over 12 percent of people screened had an undisclosed criminal background.

Even with these statistics, most employers still conduct their own pre-employment screening, which usually means they are not extending their research beyond calling references listed by the candidate. And if the names are handpicked by the applicant the feedback about the candidate will most likely be positive.

However, outsourcing the background screening can provide more in-depth information, which may reveal the applicant's true colors. But at the same time, using human resources consulting firms or background screening agencies can also prove to be cost effective, since they know what they are looking for and know the most efficient ways of finding it.

Professional background screening can range anywhere from $35 to $300 in the Northland, depending on the search type and the candidate's history. The average screening will look at public records, but other important checks can include a search for outstanding warrants, motor vehicle reports, credit reports, education credentials and prior employment verification.

But let's be honest here, is a full-fledged background search really necessary here in our very own Twin Ports? You betcha.

Because we live in a desirable locale, the Duluth-Superior area tends to attract job seekers from outside the region-such as the Twin Cities or beyond-therefore relying on only references even more risky since they are an unknown face at the other end of the phone. Oftentimes, checking on a reference locally will yield a familiar name or company, which makes the input more reliable. And a competitive job market-such as one we are seeing now-may tempt applicants to be dishonest on their resumes.

In addition to finding out what kind of person you are hiring, the benefits of conducting a background search may prove to be a smart move legally. For example, Company X does its homework and calls Company Y inquiring about John Doe's background. But Company Y does not reveal that John Doe has a history of sexual harassment and John Doe commits the same act while working for Company X. This is negligent hiring; past employers have a legal obligation to reveal past indiscretions.

There are several warning signs that can be evident on a dishonest resume, including:
• Dates that don't correspond or seem doubtful (including completing college in a short or long period of time);
• Several short employment stints;
• Vague or suspicious sounding job descriptions.

The difference between basic reference checking and in-depth background searches can result in hiring the most qualified, reliable and upstanding employees, reduce turnover and may save the company from facing legal nightmares in the future.

Ken Buck is the Consulting Managing Director for RSM McGladrey in Duluth and is a Volunteer Counselor for the UMD Center for Economic Development. Contact him at Ken_Buck@rsmi.com.