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Hire Your Way to Higher Earnings Through Pre-employment Screening ... Individuals engaging in aberrant behaviors tend to rationalize their behaviors as normal. ... – PowerPoint PPT presentation

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Title: Presented by Si Lamm CPCU, Director of Sales slammmerchantsinfo'com 503'697'6551


1
Presented by Si Lamm CPCU, Director of
Salesslamm_at_merchantsinfo.com503.697.6551
2
Screening Tools Used by Fortune 1000
  • Criminal Records Checks 88
  • Employment Verification 86
  • Drug Screening 78
  • Education Verification 74
  • Verification of Professional Licenses 59
  • MVR Checks 50
  • Credit History 39
  • Integrity Testing 7

3
Background InformationAmerican Tescor, LLC
  • Founded 1979 by Dr. Peter Bullard
  • Headquarters Phoenix, Arizona
  • Service Area North America
  • Testing Volume 35,000 Applicants Weekly

4
Benefits of Tescor Screening
The Tescor Survey has proven to be a powerful
tool in improving productivity, employee morale,
and earnings. This is accomplished by
reducing Turnover Sick Leave
Utilization Employee Theft (Shrinkage) EAP
Utilization Workplace Violence Workers Comp
Losses Negligent Hiring Suits STD
Losses Disciplinary Actions LTD
Losses Terminations for Cause Group Medical
Costs Unemployment Insurance Auto
Liability FMLA Utilization EPL Claims
5
Tescors Electronic Behavioral Assessment
  • 73 Questions About Theft, Drug Abuse, Violence
    Lying.
  • Identifies Applicants with Entitlement
    Mentality.
  • 5th Grade Reading Level. Takes 20 Minutes.

6
Tescors Electronic Behavioral Assessment
  • English Plus 21 Foreign Language Versions. Audio
    Versions in English Spanish.
  • In Compliance with All State and Federal Hiring
    Guidelines.
  • All Electronic Screening Immediate Results
    24/7/365 With/Without Internet.

7
Electronic Delivery Systems
Tescor Data Recorder

All Tescor systems provide instant results.
8
Electronic Delivery Makes Administration Easy
  • The Data Recorder
  • Complete with TescorNet software.
  • Instant scoring via modem link.

9
Tescor Data RecorderSample Results
  • Results received in under one minute.
  • Identifies applicant by SSN.
  • Scores applicant as either Qualified or
    Non-Qualified.

10
Electronic Delivery Systems
Tescor on the Internet
All Tescor systems provide instant results.
11
Internet HR MagnetSample Results
12
(No Transcript)
13
The Tescor Scales
14
Theft Scale
  • Sample Question
  • Excluding minor office supplies (pads, pens,
    etc.), what would you guess is the value of
    things you have secretly taken from work in the
    past 2 years?
  • A. None
  • B. 5 - 25
  • C. 26 - 500
  • D. 501 or more
  • Serious and recent theft only.
  • Excludes all amounts below 5.

15
Drug and Alcohol Scale
  • Sample Question
  • Excluding pills you got from a doctor
    (prescriptions), which of the following drugs do
    you use?
  • A. Cocaine, Coke, Snow, Crack
  • B. LSD, Acid, Mescaline, Peyote
  • C. Heroin, Opium
  • D. None
  • Only current use drug inquiries.
  • Only job-related alcohol inquiries.

16
Hostility/Violence Scale
  • Sample Question
  • Suppose you were insulted. Would you hit the
    person who insulted you?
  • A. Definitely would not
  • B. Probably would not
  • C. Probably would
  • D. Definitely would
  • Hostile individuals often interview well.
  • Hostility often comes out in hidden ways.
  • 99 of all applicants pass this scale.

17
Faking Scale
  • Sample Question
  • Since age 16, how often have you told a lie?
  • A. Frequently
  • B. Occasionally
  • C. Rarely
  • D. Never
  • More than 90 of all applicants pass this scale.

18
The Science Behind Tescor
  • Individuals engaging in aberrant behaviors tend
    to rationalize their behaviors as normal.
    Otherwise, they suffer from cognitive
    dissonance, an anxiety provoking state where
    ones behaviors are in conflict with their
    values.

19
Scoring the Tescor Survey
  • An individual who scores HIGH in any risk
    category (Theft, Drugs, Faking and/or Hostility)
    is considered a NON-QUALIFIED applicant.

20
Validation ResearchNational Sample - 1,152,358
Applicants
21
Overall Risk
22
Passing Rates for Theft Scale
23
Passing Rates for Drug Scale
24
Passing Rates for Hostility Scale
25
Passing Rates for Faking Scale
26
Theft Behaviors
27
Drug Admissions
28
Drug and Alcohol Use
29
Comparing Screening Tools Criminal Background
Checks
  • Only convictions are reported.
  • Limited in geographic scope by county or state.
  • Not all states have statewide databases
  • There are 3,380 counties in U.S.
  • 25 states have automated less than 60 of their
    felony convictions.
  • Most employee theft is never caught or reported.
  • Identity theft will not be caught.
  • Capture Rate 6 Cost 25 to 150.

30
Comparing Screening ToolsUrinalysis Limitations
  • Most drugs (except marijuana) clear a users
    system in less than 72 hours.
  • Web sites like urineluck.com sell clean
    powdered urine with 200 guarantee.
  • Subject to legal challenges through faulty lab
    work, sample mix-ups, or chain of custody.
  • Capture Rate 5 Cost 10 to 50

31
Comparing Drug Capture Rates
13

4.5
32
Overall Capture Rates
33
False Negative StudyMidwest Based Staffing
Company
  • Study Background
  • This Midwest based staffing company primarily
    serves the light industrial sector. They
    conducted urinalysis screening on all applicants
    who passed the Tescor Survey. All those who
    passed the urinalysis were then subject to
    criminal background checks.

34
False Negative StudyMidwest Based Staffing
Company
  • Study Period 12/1/05 to 7/1/06
  • 25,003 Workers Screened by Tescor
  • 19,901 Workers Passed Tescor
  • 80 Tescor Passing Rate
  • 142 (.7) Passed Tescor and Failed Urinalysis
  • 59 (.3) Passed Tescor and Failed Background
    Check
  • 201 (1) Total Tescor False Negatives

35
The Cost of High Risk Employees
  • Thirty-eight percent to 50 of all workers
    compensation claims are related to the abuse of
    alcohol or drugs in the workplace.
  • -U.S. Department of Labor
  • Drug-using employees are five times more likely
    to file a workers compensation claim.
  • -National Institute on Drug Abuse
  • Drug and alcohol abuse in the workplace cause 65
    of on-the-job accidents.
  • -Department of Labor

36
The Cost of High Risk Employees Cont.
  • Studies show that alcohol and other drug users
    use three times as many sick days.
  • -National Council on Alcoholism Drug
    Dependence
  • Drug users are absent from work an average of
    five days per month due to drug use.
  • -U.S. Department of Labor
  • Substance abusers are 10 times more likely to
    steal from the company or from other employees.
  • -U.S. Department of Labor

37
Legal Compliance
  • Screening tools must be either validated or
    non-discriminatory Tescor is both.
  • Federal and State guidelines require protected
    classes to pass at a rate that is 80 or better,
    compared to the relevant class.
  • Tescor has been litigation free throughout
    29-year history.

Passing Rate (percent)
38
Passing Rates of Protected Classes
By Race, Sex and Age
White 80 Rule Non-White
Male 80 Rule Female
Under 40 80 Rule Over 40
Passing Rate (percent)
39
Tescor Scoring Options
  • Standard 73 - 20 minutes passing rates 65-75
  • Quick 73 shorter questions 14 minutes faking
    scale isnt scored passing rates 80-85

40
Tescors Effects On Workers Compensation
41
Common Denominators In Expensive Comp Claims
  • History of Absenteeism
  • History of Disciplinary Action
  • History of Prior Claims
  • History of Drug Abuse

42
Measuring Tescors Impact In Reducing Workers
Comp Losses
  • Controlled Studies Cover Nearly 400,000 Workers
  • Time Frame 1996 to 2006
  • of Companies In Studies 12
  • Average Claim Frequency Reduction 54
  • Average Claim Severity Reduction 21
  • Overall Average Loss Rate Reduction 63

43
Comp Loss Reduction Among Tescor Screened
Workers
The severity reduction is based on all claims,
open and closed. When the analysis is based on
closed claims only, the severity reduction is
significantly higher.
44
Workers Comp Analysis Hospitality Industry
3/15/03 2/29/04
Tescor Screened Employees vs. Unscreened Employees
Projected Savings from Tescor Screening on New
Hires Only
45
Workers Comp Analysis 3/15/03 2/29/04
The Tescor Group's frequency was 51
lower. The Tescor Group's severity was 50
lower. The combined savings was 75 on an
Incurred basis.
46
Workers Compensation
Closed Claim Study Southern California Employer
2003 - 2007
47
Cornell University Schoolof Hotel
Administrations Findings
  • Screened employees are less likely to file a
    claim.
  • The screened employees average claim was smaller
    than the average claim filed by an unscreened
    employee.
  • The screened employees claim variance was
    smaller than the unscreened employees claim
    variance.
  • The average claim cost of all screened employees
    is less than average claim cost of all unscreened
    employees.
  • The screened employees are less likely to file
    large claims (i.e., gt 2000) than unscreened
    employees.

48
Overall Projected Workers Comp Loss Reduction
49
Short Term Disability (STD) Studies Year 2000
In the first study, 6,800 applicants were
screened with the Tescor Survey. The Unscreened
group had a claim frequency rate 40 higher than
the Tescor Screened group.
50
Sample Industries Served By American Tescor
  • Hospitality Good Times Restaurants Hospitality
    Management Corp
  • Food Processors National Beef
  • Car Rental Agencies - Hertz
  • Long-Term Care Kisco, Delta Healthcare,
    AccentCare
  • Commercial Laundries American Linen Supply
    (ALSCO)
  • Staffing TrueBlue, Inc., and Joulé Staffing
    Services
  • Transportation Goldenstate Overnight
  • Manufacturers Assemblers Technicolor, Thor
    Industries
  • Retail Distribution U-Haul, Johnstone Supply,
    Weis Markets
  • Building Maintenance and Security Levy
    Security, American Building Maintenance
  • Oil Gas Grey Wolf Drilling, Diamond Offshore
  • Construction-Jaynes Corp, CLP Resources, Eplica
    Corp.

51
Tescor Screening Improves Earnings, Safety
Productivity
  • Tescor Electronic Screening
  • Highly Effective
  • Easy to Administer
  • Generates Very High ROIs

52
American Tescor, LLCA Division of Merchants
Information Solutions
Hire Your Way to Higher Earnings Through
Pre-employment Screening
  • For further information contactSi Lamm,
    503.697.6551SLamm_at_MerchantsInfo.com
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