The Cost of Negligent Hiring

Negligent hiring is one of the hottest topics in present-day corporate and employment law. The average cost of settling a negligent hiring lawsuit is nearly $1 million. The highest cost recorded was $26.5 million. These rulings tell us that employers have a responsibility to their customers and employees alike to demonstrate a duty of care when bringing on a new team member.

Negligent hiring is a claim made by an injured party against an employer based on the theory that the employer knew or should have known about the employee's background, which may indicate a dangerous or untrustworthy character. Most employers would not knowingly put an individual to work if they thought the person in question was a threat to their employees, customers, or the organization as a whole. It’s the precautions that organizations fail to take that get them into trouble.

Let’s walk you through demonstrating the duty of care as it pertains to your hiring process. You’ve made sure the client is qualified for the tasks required of the position, but it is important to note that your job doesn’t end there. It is equally important to ensure that the new hire is not a threat to either your employees or customers. The risk associated with a failure to properly vet incoming employees is too high to ignore, so what can organizations do to mitigate the risk?

As stated before, the court looks at not only what an employer knows, but what an employee should know. In regards to the stipulation concerning what employers should know, if public record of past transgressions exists, that falls into the category of what an employer should know. For example, if there is record of a violent crime committed by an applicant or employee, then the employer should be aware of it. Having a thorough, consistent screening process is a great place to start in demonstrating that duty of care. It not only shields the organization from negligent hiring lawsuits, but most importantly, it helps keep employees and customers safe.

In the case of the $26.5 million award, the healthcare provider failed to perform a background check. A proper pre-employment screening procedure would have revealed a whopping six prior felony convictions, but the healthcare provider neglected to administer a background check. This unfortunately resulted in the death of the client and his grandmother. That is why the importance of background screening cannot be overstated.

Whether your organization is big or small, you owe it to your employees and customers to use every tool at your disposal to properly vet incoming talent. Background screening helps to provide a safe environment for both employees and customers. Not only will this provide peace of mind, but protect your organization from a negligent hiring lawsuit. 

Background Checks for Small Businesses

Managing your human resources department as a small business owner introduces even more responsibilities to your already diligent work schedule. Tasks like recruiting, scheduling interviews, managing employee concerns, and maintaining standard HR policies can be incredibly time consuming. One aspect you do not want to overlook however, is the process of employee screening before hiring.

As mentioned before, failing to conduct background checks can be costly to your business for a variety of reasons. As a small business owner, making these mistakes could result in your business failing as a whole. Being faced with complications like negligent hiring claims, unintelligible details as to what information you access of a potential employee, or violations of the Fair Credit Reporting Act in general are typically things that can be handled well by larger corporations. However, for entrepreneurs just joining the business world, a negative claim of any sort can prevent their ideas from ever leaving the ground.

Within small businesses, the relationships between employees and their employer can develop quickly, forming a tight-knit bond with a sense of trust, and dependency. Taking that into consideration, poor hiring decisions can have a much more drastic effect on the company. Running background checks on potential employees can ensure their effectiveness, values, and history as an employee, upon which you can decide whether or not they are a good fit for your small business. After that, screening employees during interviews gives you insight to their character. Further evaluation of potential team members can allow you to better judge how well they will work or get along with your already small staff.

Before hiring an employee, many small business owners rely on just an applicant’s resume and interviewing skills due to the fact that background checks can, at times, take longer than anticipated. Additionally, small business managers may see pre-employment screening as an expendable task that will save money and resources. Those who to do so tend to rely on social media or search results on the internet when making their hiring decisions. Not only can this give inaccurate information, but federal and state laws are set in place to prevent some employers from doing this altogether. These laws were established to prevent both legal and ethical problems, and we, as a third-party screening company, can provide the information you are seeking without violating the privacy of the candidate.

For small business owners who choose to implement background checks upon hiring new employees, a number of considerations should be taken into account. Be sure to establish a hiring and screening policy, clearly laid out within the job description for applicants. Through this, it is important to ensure accurate data, which you can accomplish by allowing the applicants to apply through an online portal, giving security and confidence throughout the process.

The Importance of Customer Service in B2B

Providing customer service as a business to a business can be much more complex than the standard business-to-consumer model. A great starting point is to help the business your company is serving with their clients. Proving that you are an asset to those that work closely with you will help in establishing your business as indispensable.

Many B2B companies can deal with anywhere from a few hundred to a few thousand clients, and every transaction can result in revenue gained or lost. With that said, losing a customer could affect these companies’ annual earnings, or worse. B2C companies on the other hand, can financially endure losing a few customers here and there. Customer service plays an enormous role in B2B aspects for that reason. Keeping your clients happy and loyal is very important.

Loyalty among businesses is much more likely to span a few years compared to that of consumers and the businesses they are purchasing from. Long-term relationships in this sense can lead to either business taking the other for granted. Being aware of every interaction between employees and the businesses that your company serves is vital in providing great customer service. Should any problems arise, you will want to solve them as quickly as possible for every client. This will help build your reputation as a truly accommodating company.

91% of B2B buyers are influenced by word-of-mouth when deciding who wish to work with, but these referrals almost always depend on whether or not they had a pleasant experience as a customer. As word spreads about great customer service from a B2B company, that company’s reputation improves tremendously. Today more than ever, buyers seek input from their peers before making upcoming purchases. As referrals grow, so does your clientele.

An important consideration when differentiating B2B and B2C is the fact that the product hardly ever changes among B2B, seeing as their main service is brand loyalty, the innovations of which often need just a few small changes here and there. Taking that into account, B2B’s compete through quality of service. Companies of similar products must prove to potential customers that they not only provide the better service, but that they truly care about those who they are serving.

The phrase "the customer is always right" carries much more weight in business-to-business customer service, despite the controversy that surrounds it. Losing customers on a larger scale can negatively affect B2B's much more than B2C's, proving the importance of how you serve your clients.