Smooth Operations: The Importance of Background Checks in Logistics
Recruitment in any industry is a challenging process. However, no other sector is as complex and regulated as the logistics industry. Talent acquisition managers need to focus not just on a candidate’s skills but also on their track record.
This is because the employees will not only transport “goods” but paraphernalia that run the US economy. And here’s the catch – a survey involving 2000 recruitment managers found that over 58% of candidates lie in their resumes!
This could include educational credentials, work experience, or skills. In an industry where smooth operations largely depend upon the employee’s morals and ethics, this is nothing short of alarming. Besides legal liability, the employer faces the threat of lost customers, stolen goods, and a marred reputation.
Hence, the US Department of Transportation and its regulatory body – the Federal Motor Carrier Safety Administration – demand that every regulated employer run thorough background checks of commercial vehicle drivers.
Why Do Logistics Providers Need Robust Background Checks?
Some employers neglect the background check process or do so minimally because they believe the hassle is not worth the returns (until the unfortunate happens). CargoNet’s theft study revealed that supply chain risks increased by a staggering 15% in 2022 as compared to the previous year. As many as 1778 risk events were recorded in the US and Canada alone.
The top two states with the most recorded events were California and Georgia. This stresses the need to hire skilled and trustworthy employees. Let’s understand in detail why robust background checks are the cornerstone of the logistics industry’s success.
1. Theft Prevention
We have already briefly touched upon this. While risk events have increased, let’s look at the losses companies have had to bear. The logistics industry loses anywhere around $50 billion each year due to lost and stolen goods.
This billion-dollar problem only becomes more alarming in light of the fact that a considerable percentage of such losses happen due to unfaithful workers. Insurance may help recover the cost of lost items. But if it’s an ongoing problem, the coverage won’t suffice.
The best solution is to lay the axe at the root of the issue – companies must only hire employees with a spot-free record. The process could involve multiple background checks. This is why workforce screening companies like Health Street begin logistics background checks with a Social Security Number Trace.
This number makes it possible to build a specific testing package. You can run tests like the ‘Do Not Fly’ listing, sex offender, courthouse repository, and more.
2. Timely and Safe Delivery
Voxware conducted an interesting survey involving 500 customers. What they found was enough to reiterate the importance of timely deliveries. As many as 69% of the respondents said they would not shop again if the product wasn’t delivered within two days of the estimated arrival date.
Also, 16% were willing to drop a company altogether in case of an inaccurate delivery. Now, on whose shoulders does this process rest? The logistics partners! This is a heavy price to pay because customer acquisition is way more costly for a brand than customer retention.
Here’s where employee criminal background checks come into the picture. Be it the shipper, freighter, or consignee. You must ensure that everyone is suitable for the role they’ve been hired for.
3. Prevention of Workplace Misconduct
Workplace misconduct is a no-no in any sector, including the transportation industry. If employees fail to conduct themselves properly at all times, they risk getting into violent fights and damaging goods in the process.
Not to mention some even have to endure life-threatening injuries. Would it be surprising to state that many such incidents do not happen in a vacuum? They are usually initiated by people who already have criminal records.
Such occurrences can be prevented simply by introducing background checks in the hiring process.
4. Brand Reputation Management
What is the secret sauce behind the good reputation of international shipping companies like FedEx and DHL? They scarcely have a record of misplaced or late deliveries. But this is not possible without the support of skilled and reliable employees!
In fact, in DHL’s Annual Customer Satisfaction Survey, one of the key points customers mentioned for delivery satisfaction was punctuality. This umbrella term included qualities like timely delivery, safe transportation, eco-friendly support, and transparency within the supply chain.
These freight companies rigorously conduct employee background checks to weed out the suspicious and unsuitable ones. Remember, your employees will create and maintain customer trust!
Background Verification: Challenges to Overcome
Employee background checks in the logistics industry are crucial, but there are also challenges involved. Some of the common challenges include –
- Onboarding Urgencies – Background verification is a complex and time-consuming process. With the staff shortage in the logistics sector, some employers may fast-forward or skip the process due to urgencies.
- Costs – Background verification is an expensive process. In cases where the employer needs to hire many workers within a short span, they’re tempted to run a slipshod check.
- Inconsistent Data – Sometimes, candidate data is incomplete or inconsistent. This makes it difficult to run a thorough background check.
The Bottom Line
With instances of shipping thefts on the rise, no employer can remain lax with their recruitment process. As logistics employers introduce measures like in-transit security, surveillance systems, and regular audits, they must also have robust pre-employment background screenings in place.
With detailed and accurate histories, you can make an informed decision with your hires. After all, you can never really judge a book by its cover, much less a person by their appearance!