Are pre-employment credit checks relevant?

Adverse credit information – including defaults, judgements, notices and debt review trace alerts – can be identified during a pre-employment background screening check.
However, is this information actually relevant to hiring managers who are screening potential new employees?

It most certainly is for positions of trust and employees who work with finances and cash.

62 percent of all credit report checks performed in 2015 returned a positive result, meaning screened candidates’ credit reports carried adverse credit information.

While it may be argued that information from a candidate’s credit report has little to do with their skills and capabilities in the workplace, there are still some valuable takeaways gleaned from conducting credit checks on candidates who are expected to work in financial roles.

Finance departments form part of the company’s operational core. It is where a wide range of critical responsibilities, including bookkeeping, cash flow and budgeting, are managed.

In order for employees to capably and effectively manage the associated tasks, it is important for them to have a healthy relationship with money.

Within organisations like banks, financial institutes, brokerages and credit providers, the relevance is heightened since fraud and theft is often a huge risk. These organisations require honest and responsible employees, who represent minimal threats to the organisation’s well-being.

When screening produces adverse information on a candidate, further scrutiny is recommended.

There are several plausible reasons as to why a person may have adverse credit information on their profile. These include unexpected expenses like medical emergencies, legal battles or other unforeseen circumstances – which can happen to anyone at any time. Decisions regarding whether to offer employment should therefore not rest solely on adverse information when there’s a legitimate explanation available.

Instead, the information should be used as a basis to establish whether the candidate is capable of effectively, honestly and transparently contributing towards the company’s financial management.

Furthermore, credit checks are just one piece of the puzzle. In addition to credit checks, the following screening should take place for a complete picture of the candidate:

•         Criminal Records
•         Academic and Matric Qualifications
•         ID Verification
•         Fraud Listing
•         Employment History
•         Fit and Proper Screening
•         Professional Association Membership
•         Driver’s License
•         Bank Verification
•         Business Background Search
•         Professional Driving Permit
•         Consumer Goods Council verification
•         Citizenship verification
•         Director/Member Confirmation

Rudi Kruger is the General Manager of LexisNexis Governance, Risk and Compliance Division.

The reality of Cloud

Cloud is still a buzzword, trending across South African enterprises and is top of mind for many executives looking to achieve their financial and operational goals.
Cloud services have been promoted as the money saving, all-encompassing answer to any organisation’s IT and business needs, but many organisations are left disappointed as they discover that this isn’t always the case. While Cloud services do indeed offer many benefits to business, organisations need to be fully aware of the realities of Cloud before making the decision to migrate, or they may end up with a solution that falls short of their expectations.

A common misconception about Cloud is that it is an across-the-board solution for any and every organisation. There are a number of pre-packaged Cloud solutions that answer various business needs, but there are few – if any – solutions that universally answer the needs of every organisation. As the cultural behaviours, operational structures and business processes of each company are unique and varied, no Cloud offering can act as an umbrella solution. Cloud solutions need to be customised in order to fulfil the exact requirements of a business, a process that is often complex and usually not as cost effective as this effectively becomes a hosted solution.

Implementing a Cloud solution is not as simple as ripping out existing infrastructure and replacing it with a Cloud service, particularly in the case of large organisations. In order to ensure that companies get the best out of Cloud, they need to take a number of factors into consideration before signing up. Not only do they need to have a full and comprehensive understanding of what they need to achieve with the solution, but they also need to consider the impact to their operations, culture and processes. Large organisations with deeply entrenched processes that correspond to in-house systems and software are very reliant on their own infrastructure and may not fully enjoy the benefits of a public Cloud service.

In terms of cost saving, there are many Cloud solutions available that save on IT costs, particularly wherever they make use of shared infrastructure. But a Cloud solution that has been tailored to fix the needs of an organisation may not necessarily be cost effective. This really becomes a private Cloud or hosted solution. Where a solution is long term, investing in one’s own infrastructure can provide a better return on investment. Additionally, where a company has already invested heavily in their own systems with regards to development or integration work. It may not make sense to replace these systems with a Cloud solution, which will nullify their investment and end up costing money rather than saving it.

Security is another factor to consider. Cloud service providers generally invest heavily in security as their solutions are tied to their reputation. However, Cloud is not infallible. Organisations who place a high priority on security, such as financial institutions, need to carefully consider the security features of a Cloud service offering before signing up. There are many Cloud services that can benefit an organisation such as a finance house, but it often makes more sense to look at a hybrid solution comprising own infrastructure coupled with Cloud services, opting for Cloud where it proves more beneficial and cost effective.

Once a company has evaluated its needs and ascertained that a Cloud solution will benefit them, they need to ensure they know what their solution entails. A Cloud solution is more than simply putting systems and software in the Cloud; it’s also about the back-end services. Does the solution offer redundancy? Does it offer monitoring? What are the security features? Often, these are add-on services that come at an additional cost, diving up the total solution price.

Cloud solutions definitely offer multiple benefits, but a customised, tailor made cloud or hosted service takes a team of highly skilled individuals to build and these skills generally come at a premium. Organisations need to consider the impact of a Cloud solution on their existing infrastructure and what to replace or keep. They need to assess the impact on culture and processes and how these would need to be adapted to fit a new solution. Organisations also need to consider the financial impact of a Cloud service beyond migration, such as training and integration costs. These questions can all be answered in consultation with a suitable systems integrator who goes beyond being a Cloud service provider and becomes a trusted advisor.

With all these factors to consider, companies should not be discouraged from looking at Cloud services as a viable option. If a company is looking for flexibility in usage and paying only for what’s needed, then Cloud is suitable. If a company is looking to restructure their IT department to focus on innovation and technical optimisation, then Cloud will answer that need. Cloud is an enabler for companies with multiple branches who need to centralise, or who want to enable a work-from-home workforce. Essentially, Cloud offers multiple benefits, particularly for small to medium enterprises that are starting out or replacing old systems, or corporations with in-house systems that can integrate with Cloud services for certain requirements.

But in order for organisations to not succumb to marketing hype by investing in cloud solutions that may not answer their specific needs, they need to consider their options comprehensively and holistically. Companies can ensure that they opt for the best solution to fit their needs by consulting with a trusted advisor who will make them fully aware of the pros and cons of a Cloud offering versus their own infrastructure. A partner that understands an organisation’s business needs and how best to address them will be able to guide them on whether or not a Cloud solution will work for them and if so, how to get the best out of it.

Sadiq Munshi is the Product Development Manager: Cloud Solutions at Jasco Enterprise.

Five common job seeker pitfalls

With job prospects improving, workers are looking to greener pastures, but simple mistakes in the application process may be holding them back from landing a new opportunity.
Workers realize that the job market is stronger than it has been over the last eight years, and technology is allowing them to pursue new opportunities faster and more efficiently than ever. But, just because they are able to submit an application easier, doesn’t mean candidates can skip basic steps or requirements, like submitting a cover letter or customizing their CVs. These items get the attention of recruiters and hiring managers, and leaving them out of the process can hurt a job seeker’s chances of securing a new job.

Most common job seeker mistakes

Candidates need to take extra care when it comes to all aspects of the hiring process. Avoiding these simple mistakes will get you closer to that job you’re pursuing:

54 percent of job seekers don’t customize their CV for each employer. Employers can spot all purpose CVs from a mile away. Tailor your CV to match the job description by inserting key words used in the job posting that match your experience. Not only will this catch the eye of the hiring manager, but it can move your CV to the top of the pile if an automated tracking system is scanning CVs for potential candidates.

84 percent of job seekers don’t find out the hiring manager’s name and personalize the application. Applying directly to the hiring managers increases your chances of getting noticed and shows you’ve gone that extra step and invested time in getting to know the company.

45 percent of job seekers don’t include a cover letter with their CV. Cover letters allow a candidate the opportunity to sell themselves beyond the typical listing of work experience and skills in a CV. Use a cover letter to introduce yourself and showcase your credentials in a relatable way.

37 percent of job seekers don’t follow up with an employer after they applied. Recruiters can sometimes be overwhelmed by candidate applications for certain open jobs. Circling back with a recruiter or hiring manager after submitting a cover letter and CV can help job seekers standout among the competition.

57 percent of job seekers don’t send thank you notes after an interview. This can be one of the most important steps in a candidate’s pre-hire journey as it enables you to reiterate why you’re the best fit for the job. Most recruiters and hiring managers expect a thank you note in some form or another (email or handwritten), so neglecting this action will make you stick out like a sore thumb. Thank you notes should be sent after phone screening calls, as well.

Additional advice to help get the job

Below are few additional tips aimed at keeping job seekers informed and improving their chances on the career hunt:

Join an employer’s talent network or talent community. Stay up to date on the latest job opportunities from ideal employers, so you can continue to show interest in working for the company.

Social media can be an asset to job seekers, not a weakness. Recruiters using social media to screen candidates have reached an all time high, but job seekers can use it to their advantage, too. Find out who you know at a potential employer and ask for a referral, or learn about latest company news to make for a more engaging conversation in an interview.

Practice your conversation skills with as many people as possible prior to an interview. Excellent written and verbal communication skills are quickly becoming the most sought after talents in job seekers across all industries. Look for ways to highlight these skills in your cover letter, CV and interviews.

Rosemary Haefner is the Chief Human Resources Officer for CareerBuilder.

Constitutional Court clarifies employment equity measures

On 15 July 2016, the Constitutional Court in Solidarity and Others v Department of Correctional Services and Others (CCT 78/15) [2016] ZACC 18 handed down its judgment on disputes surrounding the Department of Correctional Services’ (Department) refusal to promote or employ individuals based on the demographic targets set out in the Department’s Employment Equity Plan (EEP).
In terms of s21(1) of the Employment Equity Act, No 55 of 1998 (EEA), certain employers are required to, among other things, “prepare and implement an employment equity plan which will achieve reasonable progress towards employment equity in that employer’s workforce”. The Department’s EEP for the period 2010 – 2014 contained numerical targets to be achieved by the Department within a five year period based on national demographics. The Department assessed its level of racial and gender group representation exclusively on national demographics.

In 2011, the Department advertised vacant posts in the Western Cape. The 10 individual applicants in this case (five coloured women, four coloured men and one white male) applied for these posts. Nine out of the 10 applicants were recommended for appointment. However, eight of the applicants were denied appointment to the respective positions due to race and gender considerations which were “over represented”, according to the Department.

The Labour Court ruled in favour of Solidarity, the trade union representing the applicants, stating that the EEP was non-compliant with s42 of the EEA in that it failed to take into account both regional and national demographics. However, the Labour Court desisted from granting any relief to the applicants or declaring the EEP invalid. Instead, the Labour Court deemed it most appropriate to order that the Department take immediate steps to ensure that in the future both national and regional demographics are taken into account when the setting equity targets for its workforce.

The applicants appealed to the Labour Appeal Court (LAC) against the Labour Court’s decision not to grant the individual applicants any relief and/or declare the EEP invalid due to its non-compliance with s42. The LAC dismissed the applicants’ appeal, ruling that the EEP passed the test required in terms of the EEA, read together with the Constitution of the Republic of South Africa, 1996.

In the Constitutional Court, the court addressed the Barnard principle set out in South African Police Service v Solidarity obo Barnard [2014] ZACC 23 which states that an employer may refuse to appoint a candidate who falls within a category of persons that is already adequately represented at a certain occupational level. In this case, the court was required to consider whether the Barnard principle’s application is limited to white people only and whether this principle may also be applied in respect of gender. The court ruled that the Barnard principle is not only limited to white people but rather to candidates from all racial groups as well as both men and women.

The applicants’ submission that the Department’s EEP be declared null and void due to its non-compliance with s42(a) was dismissed by the court, ruling that that the EEP had already run its course and there was no need for an order declaring its invalidity.

The court also rejected Solidarity’s contention that the numerical targets constituted ‘quotas’, which are outlawed under the EEA. One of the distinctions, as set out in Barnard, is that a quota is ‘rigid’ as opposed to numerical targets, which are flexible. The court ruled that because the EEP made provision for deviations from the set targets, the targets could not be said to be rigid and did not constitute quotas.

Most importantly, the court held that the Department acted unlawfully and in breach of its obligations under s42 of the EEA in failing to consider regional demographics in assessing the levels of representation and subsequently setting targets for its EEP. The Department thus made use of a benchmark which was not authorised under the EEA and as such had no justification for using race and gender as a means to refuse the appointment/promotion of the individual applicants. Therefore, the decision not to appoint most of the individual applicants constituted unfair discrimination.

The Department also argued that because it is a national department, it is excluded from the requirement to consider both national and regional demographics. The court similarly rejected this argument on the basis that s42(a) does not exclude national departments from its application.

Finally, the court ordered the coloured applicants, who were recommended for appointment, be appointed to the relevant posts, to the extent that those posts were vacant and be paid the remuneration attached to those posts with retrospective effect. Regarding the applicants whose posts were currently occupied, the court ordered that the Department pay the applicants the remuneration attached to those posts with retrospective effect.

The court’s ruling serves as a reminder of the delicate position of employers who fall within the requirements of s42(a) of the EEA and goes a long way to clarify what is required, procedurally, to achieve a ‘transformed’ workplace which is compliant with the EEA.

Hugo Pienaar, Sean Jamieson and Jeffrey Long, Employment practice and services, Cliffe Dekker Hofmeyr.

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