Extra Edition / Business Management

Safe Hiring Initiatives Protect Consumers and Contractors

March 5, 2012
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 Craig Reilly
Craig Reilly 

As consumers become more vocal about their expectations, service company owners are taking a closer look at what will keep their customers satisfied. Recent national research conducted by Mindspot Marketing Research & Solutions among service company owners and consumers shed some light on this, revealing many pertinent attitudes about customer expectations of service provided in the home.

Service company owners agreed that consumers expected technicians to be professional, on time, and able to resolve problems quickly. They defined “professional” as respecting the customer, explaining the service process, and taking care of the property. In addition, they believed that customers chose a company based on their reputation, word of mouth referrals, trust, and price.

Consumers echoed these sentiments, indicating they looked for contractors who were experienced, licensed, capable, skilled, and insured. One additional factor for consumers was that of background screening, based on the following findings:

• Ninety-six percent were more likely to hire a company with a background screening certification.

• When asked about the importance of criminal background screenings, nine of 10 consumers said these are extremely or very important.

• Nine of 10 consumers believe it is important that service technicians working inside their homes are drug tested.

• One of five consumers did not feel safe when service technicians were in their homes. Thirty-five percent of these were still concerned about safety even after the service technician had left their home.

The service landscape has changed dramatically since the “old days” when most in-home HVAC service calls were handled by personnel working directly for local, long-established companies. Service technicians were often on a first-name basis with customers and took care of their needs from installation through repairs.

Since that time, the market has become increasingly complex, with consumers more concerned with their safety and more reluctant to open their doors to technicians they don’t know. The increase in violent crimes, felonies, and sex offenses has added to this caution, leading to questions about every unknown individual who enters a customer’s home.

Recognizing the depth of consumer concern and its potential impact on their business, many contracting companies have initiated employee screening processes to avoid hiring staff for in-home service who are convicted felons or registered sex offenders. These are generally described within the HVAC industry as safe hiring programs.

Safe Hiring and Safe Contracting Initiatives

As markets became more complex, HVAC service companies expanded their reach and began acquiring other HVAC service companies. These new, larger service organizations realized the importance of meeting consumer trust and safety expectations for service provided in their homes, similar to those experienced when companies were much smaller.

This followed a similar trend that had occurred some years earlier for major retailers, manufacturers, and third party administrators. Nearly a decade ago, corporate legal, risk, and human resource executives in these industries realized there should be a comprehensive set of hiring procedures for their human resource professionals to follow to provide a safer environment (both for customers and other employees) and avoid litigation, especially lawsuits alleging negligent hiring. Thus, safe hiring programs were born.

A safe hiring program is generally described as a set of practices that enable a company to feel more confident that the individuals they hire will not pose a threat to the company’s customers, its other employees, or the company’s reputation, and to aid companies in avoiding costly litigation related to negligent hiring.

As industries have become more complex, the need has emerged for safe hiring programs to cover outsourced service contractors in addition to direct employees. In what may be called a “safe contracting program,” some provisions of direct employee safe hiring programs are now extended to contract service employees. These safe contracting programs are required by some major retailers, manufacturers, and extended service companies or third party administrators who outsource virtually all of their service needs to independent service companies.

The HVAC industry, however, is unique in that service companies do not directly represent the manufacturer when providing service and, therefore, aren’t included in safe contracting programs mandated by retailers and other industry manufacturers. As a result, contracting and service organizations in the HVAC industry must develop and implement their own safe hiring programs.

Setting the Standard

Many service companies in the HVAC industry are small to mid-sized businesses, lacking the internal human resources professionals to develop and monitor safe hiring programs. With this in mind, the National Association of Professional Background Screeners (NAPBS) has been actively engaged in discussing industry trends for background screening companies and their clients.

NAPBS, an international not-for-profit trade association representing 700 member companies, provides education, legislative monitoring, and networking for the background screening industry and encourages members to share practices that will lead to the establishment of industry compliance best practices. The service industry itself, through the formation of a service industry compliance committee, is also working to develop standards for implementing and managing safe hiring and safe contracting programs.

These standards will likely include some or all of the following elements:

Appropriate criminal background and driving screens: Based on actual job requirements, the most comprehensive programs for employees of service organizations would include a direct search of all applicable court level databases for the past seven years, plus a national and federal search, repeated at least every two years, for criminal, sex offender, and driving records; searching all aliases, multiple addresses, and references. Failure to do so may result in negligent hiring litigation.

Drug screens, performed at the time of hire, for cause, and on a random basis: A recent review by a major manufacturer of drug screening results of service contractor technicians revealed that almost 8 percent of them had failed a drug screen or refused to submit for a drug test. Companies that have implemented drug testing programs have seen a decrease in lost productivity, accidents, and workers compensation claims.

Adherence to notification requirements of Federal Credit Reporting Act (FCRA): There’s much more to an effective safe hiring program than just providing screening services. FCRA requires a full range of communications with applicants, including contractors, to notify them of unfavorable findings on a screening result and inform them of their right to dispute the information and appeal the decision. Failure to manage this process properly opens the company to litigation.

Insurance verification: This is the one element that applies to the service contracting firm, rather than its employees. Contractors should be able to show proof of general liability and workers compensation insurance. Lacking this coverage, personnel who injure themselves onsite at a customer’s home may sue the customer — hardly a good reflection on the contractor. One caution is that the verification process must be actively managed after verification to ensure that each policy has been renewed. This is especially true in the HVAC and plumbing industries where the risk of injury and property damage is significantly higher than other service industries.

Looking Forward

Whether an HVAC service company develops its own safe hiring program or is working with large retailers, manufacturers, and third party administrators and adhering to their safe contracting practices, safe hiring programs will have an impact on their business operations.

A recent case in point occurred at the manufacturer level, but has applicability for service contractors as well. Several manufacturers had implemented actively-managed safe contracting programs after recognizing that some of their contracted service companies had not conducted required screenings.

The results of the screenings they subsequently conducted in their safe contracting programs were sobering, with 2 percent of their current technicians disqualified because of issues detected in criminal background screenings and another 4 percent disqualified for driving without a valid driver’s license.

Perhaps the most interesting result was that more than 5 percent of their contracting firms refused to undergo background screens of themselves and their employees or provide evidence of adherence. The manufacturers were left with no choice but to disqualify that 5 percent from their authorized pool of contractors.

These results may be even more important to HVAC contractors than service companies in other industries, because HVAC contracting companies rarely work on behalf of a manufacturer and so are solely liable for the actions of their employees.

What does this mean for HVAC contracting companies? Simply put, safe contracting and safe hiring programs are becoming more commonplace. As standards for background screening become more widely accepted and implemented, the cost of conducting the screenings will be reduced substantially. Since cost has traditionally been a deterrent in the screening process, these changes will allow for a safer, screened workforce of technicians.

Moving forward, safe contracting and safe hiring programs will likely become an essential component of service processes adopted by manufacturers, retailers, and service contractors. Furthering a commitment to carrying out the hiring process in a way that protects both customers and business partners, safe hiring and contracting will be an investment that is worthy of any service company’s consideration.

Publication date: 03/05/2012

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