July shows little change in unemployment rate
The Bureau of Labor Statistics reports this morning that the unemployment rate increased slightly to 8.3%, compared to 8.2% in June.
Neither the number of unemployed persons – now 12.8 million – nor the unemployment rate has changed much in 2012.
Total nonfarm payroll employment rose by 163,000 in July — more than the consensus forecast of about 100,000. The bureau said the construction and retail trade industries were among those major industries that showed little or no change compared to last month.
Employment in temporary help services trended up, with the addition of 14,000 jobs.
Last year in July, the unemployment rate stood at 9.1%.
SHRM survey: Poor credit history not barrier to hiring
The percentage of employers that conduct credit background checks on potential employees has dropped since 2010, according to a 2012 survey of 544 U.S.-based HR professionals.
Among organizations that do perform credit history checks, 80% have hired someone despite a poor credit report, according to the 2012 findings.
The findings are from a Society for Human Resource Management (SHRM) survey conducted from Dec. 28, 2011, through Feb. 7, with randomly selected SHRM members in the United States. Approximately three-fourths of respondents were at organizations solely based in the United States, though nearly two-thirds reported that their organization operates out of more than one location in the United States.
SHRM’s last such survey in 2010 found 40% did not conduct credit checks of potential hires. In 2012, 53% said they did not conduct such background checks.
“Employers are becoming more aware of the scrutiny that the states and federal government are putting on these tools, so they’re using them in more discrete ways,” said Mark Schmit, SHRM’s vice president of research. “They’re using them to target specific jobs, where it’s more job related,” such as handling large sums of cash or having access to confidential information.
Previous work experience, organizational fit and possessing the skills needed for the job were the three most important factors influencing the final decision to hire one candidate over another, SHRM found.
Among organizations that initiate credit background checks, 58% do so after making a contingent job offer and 33% after the job interview. Thirty-four percent initiate credit checks on select job candidates. In those instances:
• 87% do so for positions with financial responsibilities.
• 42% do so for senior executive positions.
• 34% do so for positions with access to highly confidential employee information.
SHRM’s survey report, The Use of Credit Background Checks in Hiring Decisions, noted that before procuring a consumer report for employment purposes from a consumer reporting agency, the Fair Credit Reporting Act (FCRA) requires employers to clearly disclose—in writing—to the candidate that an employer may obtain such a report and to request the candidate’s written authorization to do so.
Employers are required to provide the candidate with a copy of the report and a written description of the candidate’s consumer rights before making a decision in any way based on the report.
How far back to check?
Overall, those that use credit checks are most interested in a credit history of two to seven years.
Nearly two-thirds of organizations surveyed reported that use of credit checks allows candidates to explain the results of the credit check before making a hiring decision. And just as with criminal background checks, the most common reason for considering credit background is to reduce or prevent theft and embezzlement (45%) among hires, according to the survey.
Other reasons include:
• Reducing legal liability for negligent hiring (22%).
• Assessing the overall trustworthiness of a candidate (19%).
• Complying with state law (7%).
• Complying with credit card processor standards (3%).
It’s important, Schmit noted, that a credit check is related to the job being filled.
“Most organizations don’t do these checks in the early phases” of the job-hiring process, often waiting until after a successful candidate interview, Schmit pointed out. If candidates can explain the circumstances of a questionable credit report finding, “they still go ahead and hire them,” he added.
HireRight, a provider of screening programs, reported in its fifth annual Employment Screening Benchmarking Report that less than a third of 2,256 respondents reported conducting credit checks. The 2012 report is based on an online survey of HireRight customers and noncustomers—including hiring, recruiting, HR, security and management professionals—conducted in February.
While 69% had not changed their credit check policy in the past year, 26% had done so and another 5% plan to do so in 2013.
“Concerns over new legislation and increasing [Equal Employment Opportunity Commission (EEOC)] scrutiny may be limiting the use of credit checks to specific roles,” HireRight said in its report.
In 2010, SHRM Online reported that background checking of applicants’ credit reports has come under increased scrutiny by the EEOC, Congress, the media and state legislatures. And as of July, California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and the state of Washington have prohibited the use of credit reports in the selection process.
However, “even without legislation, [organizations] are very thoughtful about what to look at because it’s a key part of their program in terms of administration and cost,” said Rob Pickell, HireRight chief marketing officer and senior vice president of strategy. “If credit isn’t tied to the nature of your business and employees, you probably don’t use it anyway.”
Check those credit checking policies
Pickell offered the following advice applicable to the use of credit and criminal background checks:
• Look at your organization’s policy in light of EEOC guidance, and evaluate where there may be a disconnect between the two.
• Be cautious about the use of blanket policies.
• Make sure the team that is involved in hiring and background screening is properly trained around EEOC guidance and the Fair Credit Reporting Act (FCRA).
• Take into consideration the details of an individual’s report, such as the circumstances surrounding the negative credit item.
Kathy Gurchiek is associate editor for HR News.
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Ornamental fencing to help boost industry sales
Demand for fencing in the U.S. is forecast to expand 7.1% annually through 2016, according to a report just released by The Freedonia Group, a Cleveland-based market research firm. Growth will be driven by an expected rebound in building construction from a depressed 2011 base. Advances will also be supported by rising installation of high-value fences, such as ornamental metal and composite fencing. Consumers are turning to these materials because of their favorable aesthetic and performance properties, the report said.
Among fencing materials, plastic and composite is forecast to see the most rapid growth in demand through 2016, given their low-maintenance requirements and “green” reputation. In 2011, metal fencing accounted for the largest share of the fencing market in both dollar value and linear feet. This takes in both chain link fencing and ornamental metal fencing.
Demand for metal fencing will increase in line with the industry average through 2016. High-value ornamental fencing will spur dollar gains. In addition to the rebound in housing activity, some business owners will opt for ornamental fencing to serve as an aesthetically pleasing alternative to chain link or wire fencing.
Wood fencing demand will advance at a below average pace through 2016. Wood is most often used in the residential market because of its low cost and favorable aesthetics. However, demand for wood fencing will be checked by competition from plastic and composite fencing, which require less maintenance than wood.