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The 4 Biggest Risks in the Hiring Process

Director of People at HNI

A lot of our customers are in growth mode, which is exciting to witness and help enable.  But growth often means hiring – which can expose an organization to risk.   

The two riskiest times of an individual’s employment?  Hiring and parting ways.

hiring risksHere a few of the areas where we see organizations exposing themselves to risk when recruiting new employees:

1) Managers who aren’t trained on interviewing

Often times hiring managers are put in front of candidates with little to no explanation of how they should be interacting with or evaluating candidates.

The basic rule of interview questions is that you should avoid questions that get at age, gender, ethnicity, race, marital status, religion, and other categories employers are barred from discriminating against. Since you can’t legally make employment decisions based on these characteristics, gathering this information is opening the door to allegations of wrongdoing.

Related Post: 5 Illegal Interview Questions You’re Probably Asking

At first glance, this seems easy enough, right? But even some questions we treat as small talk can be viewed as discriminatory and can end up serving as evidence against you in an employment practices suit. All it takes is one disgruntled applicant to turn a seemingly innocent question into something you didn’t intend for it to be.

2) Inconsistent hiring practices

When your foot is on the gas and you’re growing, creating policies and documenting practices may not be on the top of your to-do list.

If a former employee or applicant alleges unfair treatment or discrimination, however, you’re in a much better position to defend yourself if you can show that a lawful policy existed and was followed. 

Consistency is the key.  All applicants should be treated in a similar way, unless there’s a strong reason for doing otherwise.  For example, if you’re doing background checks for some positions but not others, there should be a clear rationale to back up this practice.

Whatever your hiring practices are, make sure these are documented in writing and shared with anyone involved in recruiting and talent decisions. 

3) Getting the right fit for the right role

Sometimes a new employee just doesn’t work out.  This may be unavoidable in some situations, but there are steps you can take on the front end to ensure you’re getting the “right fit” talent.

Post-offer physical abilities testing can help anticipate and avoid your next work comp claims and avoid risk down the line.  We’re seeing many organizations in high-risk industries adopt these.  These can be done for all or some positions, as long as you have a policy and all applicants for a particular role are treated in a consistent way.

Additionally, personality or psychographic profiling tests can offer a window into the way a person works.  At HNI, we use Culture Index, but there are countless other options out there.

4) No coverage to protect against employment practices risks

Any business who employs people has risk in this area, no matter how rock solid your employment practices may be.

Employment practices liability insurance (EPLI) is the coverage no one thinks they will ever need to use – but if a situation arises, you will always be glad to have it to fall back on.

No employer runs their business in a way that they think will land them in court (and if they do, they likely have more problems to deal with than just employment practices liability). EPLI is intended for situations that businesses just don’t see coming.

Evaluate Your Risk In This Area

When we work with growing organizations or companies in industries with high turnover, this is an area of risk that we're particularly sensitive to.  

Want to learn more about your own risk when it comes to bringing on new employees?  Download our employment practices liability whitepaper to get a better understanding of things that may be exposing you to risk.

What questions do you have about best practices for hiring employees?  Are there other risks you've encountered?  What's worked well for your organization?  Share in the comments!

            [Download the Whitepaper] Managing People Risk: The Human Side of the Equation


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