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Pre-Hire Medical Screenings: Expense or Investment?

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By Rick Weber, Director of Occupational Health, Powers Health (Formerly Community Healthcare System).

Most people are familiar with the term “Buy once, cry once.” Many readers of this article may already subscribe to this philosophy. The simple fact is this phrase would not have gained such popularity unless there was truth behind it. I can attest to times when I have attempted to postpone an expense in an effort to save money, only to have the situation end up costing more than if I had just invested in the first place.

Companies invest significant time and money in their workforce, and there is a strong correlation between the success of a company and the quality of its employees. It is no secret that a high employee turnover rate is detrimental to a company’s bottom line. The good news is that building a pre-employment screening program is a valuable tool that will help to ensure employers are hiring good employees.

One of the growing challenges in today’s business climate is finding quality candidates to fill open positions. To put it simply, there are fewer job seekers applying for open positions in today’s market – particularly within the blue-collar industries. A common reaction to this challenge is to decrease the barriers to entry when hiring new employees. As a result, many employers have cut back on their pre-employment screening process or have removed it. At the outset, pre-employment screenings are viewed as an added expense – and businesses often are looking for ways to cut costs. By reducing or eliminating the pre-employment screening, not only are companies able to fill open positions more quickly, they also are saving money by not having to pay for medical screenings. This seems like a win-win, right?

The problem with this philosophy is that it opens the door to hiring employees who may not be able to safely perform their job. This increases the risk of work-related injuries and fatalities, more incidents resulting in property damage and higher employee turnover rates. As of 2019, the average cost of a workers’ compensation claim was $42,008, as reported by the PMC Insurance Group. While certain industries are required to conduct pre-employment screenings, other industries remain exempt. However, the data suggests that it is beneficial for employers to conduct pre-employment screenings, even if they are not required to do so.

Aberdeen Strategy & Research concluded in a 2015 study that employers who conduct pre-employment screenings realize a 39% lower employee turnover rate than employers who do not perform screenings. This translates into significant savings over the long term and should not be ignored by decision makers who operate in the best interest of their company.

While job interviews are an important aspect of the hiring process, they do not paint a complete picture of a job candidate’s fitness for the position. A basic pre-employment screening, consisting of a drug test and a job-specific medical exam, provides employers with objective data that is likely to make the difference between hiring safe and unsafe employees. As a business owner, you may be asking yourself if you can truly afford the cost of implementing such a screening process. However, the real question is, can you afford not to?