Vetting Employees, Contractors and Partners-ProConstruction Guide
Tips for Vetting Employees, Contractors and Partners

Tips for Vetting Employees, Contractors and Partners

Given how tight labor and credit markets are for small businesses, it can be tempting to fast track a hire, a job or even a merger without proper vetting.

But hiring the wrong employee can be as disastrous as underbidding a job. In fact, hiring the wrong person can be what causes you to blow your budget. Taking a job from a general contractor teetering on the edge of bankruptcy can be fatal. So can taking on a partner with a checkered past.

The best way to avoid mistakes when vetting employees, contractors and partners is to be proactive. If you want to graduate from working as a craftsman or technician to owning and running a business, you should always be scouting talent and potential partners. If you wait until you need someone, you’ll be tempted to skimp on your due diligence.

This is especially true if you are preparing to take the next step in growing your business by hiring your first employee.

With that in mind, here are a few tips for vetting potential employees:

  • Ask for a resume and references: Your time is valuable. Don’t agree to meet with applicants until they send you a list of their work skills, certifications and work history going back at least five years. If an applicant doesn’t have a resume, tell him or her to email the information along with three work references and a brief description of his or her relationship to each. If you are looking for skilled labor, applicants should be able to provide trade references. If they can’t provide this information within a week, move on.
  • Check the references: If a candidate lists a trade reference you know, call that person first. He or she is much more likely to be candid than someone you don’t know. Regardless, call all three references. Even though most larger employers will not talk about former employees’ performance or why they left, many will confirm employment dates.
  • Interview: Set aside some time to analyze whatever information you’ve collected and prepare a checklist of up to 10 questions in order of importance. If you don’t have much hiring experience, here are some good questions to ask when hiring construction workers. Don’t skip a formal interview. A quick exchange on the phone or in a coffee shop in no substitute. In a formal interview, you can clear up any questions from your research and get a better sense of candidates’ problem-solving skills and character by asking them how they might react in certain work situations.

Taking it deeper

Below are some additional background checks you may want to make, with one caveat. Don’t order, conduct or use any information from background checks until you understand your obligations under federal law. You should also check to see if there are additional laws governing background checks in your state.

  • SSN Trace/identity check: These return the date of birth, addresses and names associated with a Social Security number provided by a candidate or employee. Employers like to use these to see what information surfaces that may not have been disclosed during the application process, including aliases the employer may want to add when running a criminal background check. Most background screening services will run an “SSN Trace” for less than $10.
  • Credit checks: While federal law allows employers to check a job applicant’s credit report as long as the employer gets the candidate’s written permission to do so, some states restrict how the information can be used. If you do pull a report, make sure you understand your obligations under the Fair Credit Reporting Act (FCRA) and any applicable state laws.
  • Criminal background checks: CriminalWatchDog Inc. offers these for $13 to $20, depending on whether you want to search country, regional, state or national criminal records. GoodHire will do an SSN Trace, perform a national criminal database search and verify a candidate’s education and employment history for $80. Both companies’ prices include FCRA compliance.
  • E-Verify: You may want to confirm that a job candidate is legally authorized to work in the United States using the federal government’s E-Verify service. This online service enables employers to verify the information employees provide on their I-9s. E-Verify is voluntary, but some are pushing to make it mandatory as part of an immigration reform package. Some worry E-Verify could eventually be used as an enforcement tool, according to HR Dive.
  • Drug testing: If you’re hiring your first employee, now may be a good time to establish a company drug testing policy. Federal research confirms that construction workers are more likely to abuse alcohol and illicit drugs than workers in most other industries. One of every 10 construction workers surveyed between 2008 and 2012 had used illicit drugs in the prior month, and 16.5 percent were deemed heavy drinkers. That pegged the construction industry’s workforce with the second highest rate of heavy alcohol use and fifth highest rate of illicit drug use of the 19 industry workforces surveyed. Regulation of employer drug testing is also fragmented, so you may want to read up on your state’s drug testing laws or consult an attorney.

Below are a few ways to vet other contractors, potential partners or consultants:

  • Buy a business credit report: While not available for all businesses, these are useful for vetting the financial stability of potential partners (general contractors, subcontractors and investors) or potential commercial clients, such as developers. For $40 to $120 you can buy a report that includes business credit scores, a summary of recent payment history, UCC filings, debts, bankruptcy filings, court judgments, tax lien filings and other information. Here is a sample of the Experian CreditScore ReportSM, which was available for $39.95 in February 2019.
  • Check safety records: Ask contractors for their Experience Modification Rate (EMR), which compares their workers’ compensation claims experience to other contractors of their size and type. Anything over 1.0 indicates they have a higher-than-average claims rate than their peers. You can also use OSHA’s Establishment Search tool to find high-level accident and injury data on some construction companies.

Featured Products

Sponsored Messages