March 19, 2008

What is a Conditional Offer of Employment? And Why Should I Care About It?!

By Paul Bieber

A Conditional Offer of Employment (COE) is one of the best tools a manager can use in hiring the best people. When you have decided an applicant is right for your company, you hire them. But wait, there are more things to find out, things you can discuss or investigate with an offer of employment. If you don’t have a formal relationship with someone, you can’t do a drug test, a driver’s license or credit check.

What you should be doing is offering employment IF the applicant passes certain tests. If they do pass, they must be hired. If they don’t pass, you won’t hire them. Most states require a COE prior to a drug test or physical exam.

If you are saying you don’t do a drug or alcohol test, please let me know who your competitors are that perform drug tests and I will see if I can invest in them; for sure I don’t want to invest in your company. Drug testing will improve the overall success rate of your hiring, will improve your safety and reduce your insurance costs; give you less days missed by workers and overall will give your company a better attitude. We’ll do some columns on drug testing in the future, until then, contact your local attorney and get started setting this up. After the initial set-up, a drug test will cost about $35-40 dollars for an employment pre-screen for 10 substances. If a person is positive for the substances, you don’t want them.

Now you are saying, if someone does something on a Saturday night, in their own home, how does it affect my company on Monday morning. I can’t answer that question, other than to tell you it does! Companies with drug testing are better in all of the things mentioned above.

That’s the whole story on drug testing for pre-hiring testing. Testing on the job, whether random or post-accident, or by observed behavior is another story…and one that you should consider as well.

Back to the COE. Tell this to all applicants who come to you–that all employment offers are conditional–and tell them your conditions. Then, get started…if you haven’t already, confirm their prior work history. Contact your insurance agent for the driver’s license verification; if the job duties point to a credit history review, now is the time. Don’t get screwed up by hiring a driver, and a week later your insurance agent says John Applicant can’t drive your trucks. Now you’ve got to fire him, OK, that’s easy, but you wasted time, money, and during that week, John Applicant was driving your truck!

Who should you run a credit check on? Any employee that has access to company funds, whether collecting a COD at a job site or someone who has access to your accounting or bank accounts. Someone with serious financial problems should raise a red flag. This doesn’t mean absolutely no hire, but it does mean a conversation concerning their finances and making you comfortable there is a remedial plan in place. As long as you state, upfront, there will be a credit check, it is OK to do one, and to make this one of the conditions of employment.

Ditto the above on a criminal record. You are entitled to discuss all convictions on their record. If someone has 2 convictions for robbery, you don’t want them going on residential installs alone.

Employment checking is easy and not expensive. Go to Google and type in “employment checking”, you will get 50 companies to choose from. A good one will walk you through their procedures and provide you with the appropriate paperwork and releases for the applicant to sign.

COE, depending on what tests you do will extend the hiring cycle by a couple of days. No more hiring a guy at 3:30 today, and starting him at 7:00 tomorrow morning. Yes, you have hiried a lot of people, and you can usually spot the trouble makers. Wrong. That’s why there are drug tests, and insurance reports. If your company does a physical exam, don’t make light of it. Don’t call the Doctor and say, “I really need this guy to work on my crew…make sure he passes.” You are only hurting the long-term health of your firm.

To review, the most common conditions of employment are:

•Drug and Alcohol

•Driver’s License

•Criminal Record

•Credit History

•Physical Exam

I promise you, unconditionally, that implementing Conditional Offers of Employment will improve your work force. Guaranteed.