CHECKING OUT EMPLOYEES 2004-10-11 (2)

JULIE GALLAGHER

Wal-Mart Stores is the largest private-sector employer in the United States, with around 1.5 million employees. Therefore, Wal-Mart, more than most other retailers, has a huge hiring challenge.

This challenge was heightened after two of its employees were convicted of child abuse while on the job, and a South Carolina judge ordered that the retailer hand over five years' worth of employee information for comparison against the state's sex offender registry.

As a result, the Bentonville, Ark.-based giant in August announced a plan to begin using "a trio of top-tier providers to perform background checks" on potential employees before they're hired, said Gus Whitcomb, Wal-Mart spokesman. Wal-Mart reported that the policy is an expansion of pilot programs it has been running for the past year.

Wal-Mart is not alone in wanting to vet its employees before they're hired -- not only to weed out the bad apples who could threaten shoppers or steal from the store, but also to identify candidates with a higher chance of success and longevity on the job. For this, retailers are turning to a variety of services and technology applications.

Grand Rapids, Mich.-based Spartan Stores, which owns and operates 75 supermarkets and drug stores under the Family Fare, Glen's Markets and Pharm banners, began running criminal and credit history background checks of hourly employees with security company DuHadway Kendall and Associates, Kentwood, Mich., in early 2001, according to Beth Baumgartner, human resources manager for the North Region of Spartan. Candidates with bad credit are considered a higher risk for stealing. Results are received within 48 hours.

"Although an employee is hired before a check of their background, employment is contingent upon the check's results," said Baumgartner. "We avoid checking all applicants so that we don't have to distribute a three-page Fair Credit Reporting Act document to every applicant."

Although she denied that the cost of running background checks influenced the retailer's policy, they can be expensive. "A basic search of county criminal history and verification of a Social Security number can be as low as $10 to $12, but the cost increases incrementally as you add additional checks," said Dave Wirta, executive vice president, First Advantage, St. Petersburg, Fla., a screening services company. A typical background check runs about $35, and broader searches can cost from $60 to $75, he added. Certain checks, like comparisons against sex offender registries, can be made free of charge. Spartan's background checks cause termination of less than 2% of new employees, according to Baumgartner. She said the existence of criminal history doesn't necessarily impact a worker's employment status with the company. "Criminal records are judged on a case-by-case basis," said Baumgartner. "If [a new hire] is 49, and they are honest and up front about being charged for breaking and entering when they were 19, we probably won't terminate them."

Spartan is less tolerant when it comes to lying. "Of the 2% [eliminated], 10% are rejected because they lied on their application about felony convictions," said Baumgartner.

Spartan uses background checks in concert with an automated applicant-tracking and staffing system from Unicru, based in Beaverton, Ore. Baumgartner credited the Unicru system with limiting the number of employees rejected post-background check. The system is able to filter out undesirable applicants based on their true/false responses to statements.

"These assessments measure sets of traits and characteristics," said Dr. George Paajanen, creator of the assessments for Unicru. "There is a common belief that applicants can fake their answers by providing a socially desirable response, but valid personality inventory is not fake-able."

The application process, including customer service and dependability assessments, can be initiated online or at kiosks set up in Spartan stores. "About one-third of applicants apply [online] off-site," with the rest using in-store kiosks, said Baumgartner. Once the information is collected, it is routed to a Unicru mainframe system in Salt Lake City, processed, and sent to a store director.

"The application is given a score [by Unicru] that reads as red, green or yellow for the [assessment] areas," said Baumgartner. After weeding out undesirables, managers "look at the paperless application and determine who to call in." Once an applicant is hired, the system prints out all the forms that must be completed.

Information for hired employees is then e-mailed to DuHadway Kendall and Associates for the background check. The resulting report is e-mailed to the records department at Spartan headquarters, where it is filed with other new-hire material.

Since adopting both the Unicru system and background checks three years ago, Spartan has reduced its turnover rate from 87% in 2001 to 52% today. During certain periods, it's been as low as 35%.

"When the system was first introduced, store directors said, 'I am not going to let a computer tell me who to hire and who not to hire,"' said Baumgartner. "The system has proven that it works, and now we're getting no flack at all from our stores."

Safeway's Strategy

Similarly, Pleasanton, Calif.-based Safeway has reduced attrition rates by applying technology to the process of choosing and managing its employees.

The retailer's two-pronged strategy includes use of a kiosk applicant-tracking system that runs assessments, as well as a new-hire workflow system that streamlines the process of filling out forms.

Currently, Safeway is using a mix of applicant-tracking technology providers. Although it piloted Unicru's system in some stores, Safeway decided this year to move to a similar system provided by ADP, Fort Collins, Colo., by 2005, said Teresa Bell, recruiting specialist for the Texas division of Safeway. She did not elaborate on the reason.

Since 1998, the retailer has also been using Beverly Hills, Calif.-based KMS' new-hire workflow system. "It does so many wonderful things for us," said Bell. "It helps us eliminate the need to manually fill out forms" and electronically files employee information.

New Safeway hires complete the series of electronic forms on a PC located within the store. If the employee is not computer-savvy, then a manager can key in the information. To eliminate the need for duplicate keying, information is populated into all required fields once it is entered. When all forms have been completed and electronically signed through an e-signature pad, they are saved for archival and retrieval purposes in a database, and sent to other internal and external parties.

"Information is sent to vendors, including banks, drug screeners and uniform providers," said Robert Jordan, principal, KMS. "It also gets sent to internal departments like payroll, information services and facilities."

Although Safeway would not discuss the type of e-signature used with its forms, Jordan said some supermarkets opt for e-signature technology that incorporates biometrics.

"The advantage is the software captures the uniqueness of each signature by measuring its pressure points and stroke patterns, which get saved to the database," he said. "In the event that the validity of a document is questioned, you can compare the e-signature of an employee with the e-signature on the document."

The workflow tool is helping to keep new hires happy while getting them started at their jobs quickly. "In retail, you have to get folks working immediately because there is no time to wait when it comes to serving the customer," said Bell. "An employee's performance improves when they don't have to worry about getting paid on time because they know that all of their paperwork is complete."

To keep its employees smiling, Safeway hopes to incorporate an update function in the system that would alert managers when employees are due for raises or promotions.

Teaching Safety Online

Online systems can be used not only to hire employees, but to train them as well -- a real benefit for understaffed retailers. Some are using online training tools to get lessons across quickly and new workers up to speed in short order.

Food Lion, Salisbury, N.C., is currently using a computer-based system, mostly developed in-house, for training new employees. "Some training has to occur hands-on through one-on-one interaction, but some lessons can be communicated via computer," said Jeff Lowrance, a Food Lion spokesman. For instance, produce-handling lessons are hands-on, while some safety lessons can be taught online.

Grand Rapids, Mich.-based Spartan Stores uses what it calls "learning neighborhood kiosks" to teach similar lessons within its stores, noted Beth Baumgartner, human resources manager for the North Region. "We have online training programs focused on disciplines like customer service," she said. Each kiosk has its own private setting within the store.