, an Australian HR and compliance firm, has warned insurance companies about the importance of reference and background checks for new employees following several high-profile 'bad hires'.
Within the insurance industry, it is paramount to check reference and background information as failure to do so could result disciplinary action from ASIC
warns that it is not only work history that needs to be checked but also right to work in Australia, ASIC
and credit registers and any other qualifications listed.
points to a recent survey published in The Australian
that found that a 'bad hire' can cost a company two and a half times the employee’s salary. It is not just a monetary concern though as a bad hire could have a huge effect on the reputation of your business
’s managing director, Sheila Baker
, noted that the negative effects of a bad hire can have detrimental effects on your team as a whole.
“Effective background checking ensures compliance with legislation and regulatory bodies and helps avoid the possibility of heavy fines, loss of an AFS license or public disgrace.
“At the very least anything that saves you and your team from the emotional cost of a ‘bad hire’ is worth every cent.”
As a guide to effectively check references, Gold Seal
has told employers to wait until they have a final shortlist to check all references and to prepare reference checking questions in advance to save time and ensure that the process is standardised across all applicants.
point to the recent hiring and firing of Andrew Flanagan, former group general manager, strategy and business development at Myer as a case-in-point that 'bad hires' can happen in any role, no matter the size of the company.