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- Complex regulations cause challenges for manufacturing employers
- Compliance errors expose employers to legal liability
- Under-resourced hiring teams affect background check process
- Compliant background checks help build strong teams
- Reimagine background checks to expand your talent pool
Checkr’s State of Screening Compliance report finds manufacturing companies lack confidence in a compliant background check policy and their ability to prevent bias and discrimination. Learn how to expand your talent pool by addressing these challenges.
There are nearly 622,000 manufacturing job openings in the United States, with an expected shortage of 2.1 million workers by 2030. Between new jobs stemming from industry growth, open jobs from retirements, and skills gaps due to digital transformation, it will become increasingly difficult to hire qualified manufacturing talent.
Screening processes like background checks will be as important as ever to help ensure you hire skilled workers with the right qualifications, prioritize workplace safety, and mitigate risk. But as the competition heats up, crucial steps may be inadvertently overlooked.
In January, Checkr released its first-ever State of Screening Compliance report to understand organizations’ background check compliance concerns and challenges, and how practitioners are managing compliance laws and regulations. We surveyed workers involved in the background check process (not Checkr customers) across the US and in ten different industries.
In this article, we’re breaking down the survey data by industry to take a closer look at the compliance challenges manufacturing companies face.
Run safer background checks in 2024
Complex regulations cause challenges for manufacturing employers
There are multiple federal, state, and local laws that impact background checks. The Fair Credit Reporting Act (FCRA) is the federal law that all employers must follow to protect candidates applying for jobs. Hundreds of local laws at the state, county, and city levels—such as Ban the Box, salary history bans, and use of credit screening—may also impact how employers can use background checks during the hiring process.
Nearly three in four manufacturing survey respondents (74%) said their organization is good or very good at understanding and following the complex regulations of screening and compliance. However, when we asked whether they’re confident their organization's documented background check policy complies with federal, state, and local screening laws and regulations, 47% admitted they lack complete confidence, and 4% said they don’t have one. This finding underscores the need for employers to proactively monitor legislative changes and update their policy to take new laws into account.
Are manufacturing companies confident their background check policy complies with federal, state, and local regulations?
*Data from Checkr proprietary survey of workers involved in the background check process in the manufacturing industry.
The ever-evolving landscape of background check legislation across the US makes it increasingly difficult for employers to manage compliance. Manufacturing organizations’ top concerns when it comes to legislation and its impact on background screening are:
- Fair chance hiring requirements (Ban the Box laws). Currently, 37 states and 190 cities and counties have enacted Ban the Box laws. Regulations vary greatly based on location and jurisdiction, but generally restrict employers from asking about a candidate’s criminal history on initial job application forms.
- Record clearance and expungement laws (“Clean Slate” laws). In the last five years, 12 states have passed Clean Slate laws and additional states are expected to introduce laws on an ongoing basis. The intent of these laws is to give candidates with criminal histories a “clean slate” by providing automatic expungement of certain crimes when they’re eligible for it.
- Laws with conflicting requirements. Without overarching federal policy for regulations such as Ban the Box or marijuana legalization, states are taking matters into their own hands. New state and local background screening regulations continue to add complexity to an already convoluted map of laws. Reconciling various state laws, many of which conflict, is becoming increasingly challenging as new laws regulating different types of screenings are implemented.
- Data redaction laws. Consumer privacy concerns have led some county courts to redact personal data—such as full dates of birth and driver’s license numbers—from public records. Without this information, county clerks may be required to review records manually and verify a match, slowing down background check turnaround times and impacting employers’ ability to hire and onboard new employees.
- Marijuana legalization and drug testing laws. Medicinal and/or recreational adult use marijuana is legal in 40 states plus Washington DC. These drug testing laws vary widely: Some restrict when testing can be conducted, some restrict how employers can use drug testing to make hiring decisions, and others prohibit testing for marijuana altogether (with some exceptions).
Compliance errors expose employers to legal liability
A written background check policy, along with documented adjudication guidelines, is crucial for a compliant screening program. Without a clear set of parameters, inconsistencies in the background check process could lead to unintentional discrimination and risk of non-compliance with federal and local laws.
For example, the FCRA requires that employers provide candidates with disclosure and authorization forms—13% of survey respondents in the manufacturing industry aren’t sure they do this each time. Further, if an employer decides not to hire a candidate based on the results of a background check, the FCRA mandates you follow the adverse action process. Our survey revealed that 72% of respondents were not always following this process.
Further, the Equal Employment Opportunity Commission (EEOC) recommends employers follow the “Green” factors to avoid unintentional discrimination in hiring decisions. This guidance suggests employers consider the nature of the offense, the time that has passed since the conviction, and the relevance of the offense to the position. But only 36% of manufacturing respondents are confident that their organization understands and follows this guidance as part of an individualized assessment. And worse, 54% are not completely confident they have policies and procedures in place to prevent discrimination during the screening process.
Do manufacturing companies have policies and procedures in place to prevent discrimination?
*Data from Checkr proprietary survey of workers involved in the background check process in the manufacturing industry.
Employers are not following basic compliance procedures and these errors are exposing them to unnecessary legal liability. Noncompliance could create hundreds (or thousands) of potential plaintiffs in large organizations and cause serious harm to a small business with limited resources.
Implementing and maintaining compliance training programs can help ensure that employees involved in the background check process are following correct procedures as outlined in your background check policy.
Under-resourced hiring teams affect background check process
Compliance responsibilities overwhelmingly fall to busy HR and talent acquisition teams at manufacturing companies. Our survey found that these teams are respoisble for background checks, compliance, and compliance training at 58% of organizations in this industry. Only 16% of organizations have a dedicated background check team.
Resources in HR and talent acquisition teams may be stretched thin and background checks are typically one of many responsibilities HR and talent acquisition professionals manage. It’s no surprise that only 26% of organizations “always” conduct comprehensive training on the importance of compliance and legal risks associated with background checks. One-third (33%) never, rarely, or sometimes conduct training.
Many hiring teams are struggling to keep up with background check best practices due to this lack of resources.
Manufacturing survey respondents rank their organization’s biggest concerns:
- Over-screening or under-screening
- Bias during the decision-making process
- Inability to stay on top of regulations and changing laws
- Violations and lawsuits
- Lack of proper compliance training
- No one is actively managing compliance
- Unsure which background checks to use
Compliant background checks help build strong teams
Background checks have many worthwhile benefits, though the top reasons manufacturers run them are to meet industry standards, improve quality of hire, and comply with federal and state laws.
- Meet industry standards. Background checks help manufacturing companies employ candidates who are properly trained and qualified to perform the responsibilities of the job, which helps create a safe work environment. This may include drug testing, occupational health screening, and confirming work history. Manufacturers, in particular, may also be required to adhere to strict Occupational Safety and Health Administration (OSHA) safety requirements that protect workers.
- Improve quality of hire. Background checks enable employers to make informed hiring decisions. Hiring skilled, reliable, and trustworthy workers can help manufacturing companies maintain their product quality, safeguard assets, and reduce turnover.
- Comply with federal and state laws. Using a compliant background check provider can help support your compliance processes to ensure that candidate screening processes adhere to federal, state, and local laws.
Reimagine background checks to expand your talent pool
Compliance regulations are challenging—but they’re in place to encourage employers to build fair hiring practices. The good news is most respondents in the manufacturing industry (79%) feel confident that their organization understands, and complies with, fair chance hiring practices.
Take the time to update your background check policy and make sure anyone involved in the background check process follows the procedures outlined. Opening doors for qualified candidates that have been systemically overlooked can help your organization address the manufacturing talent shortage. Checkr’s advanced technology can help reduce bias and human error throughout the background check process for more compliant, inclusive, and effective decision-making.
Get more insights in Checkr’s 2024 State of Screening Compliance.
2024
State of Screening Compliance
A new survey report highlights seven key insights into how organizations are managing background check compliance.
Disclaimer
The resources and information provided here are for educational and informational purposes only and do not constitute legal advice. Always consult your own counsel for up-to-date legal advice and guidance related to your practices, needs, and compliance with applicable laws.
