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Hire your Way to Higher Earnings With Pre-Employment Screening Presented by: Si Lamm CPCU, Managing Director American Tescor LLC, a division of Merchants Information Solutions, Inc. Criminal Records Checks 88% Employment Verification 86% Drug Screening 78%

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Screening Tools Used by Fortune 1000

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Screening tools used by fortune 1000

Hire your Way to Higher EarningsWith Pre-Employment ScreeningPresented by:Si Lamm CPCU, Managing DirectorAmerican Tescor LLC, a division of Merchants Information Solutions, Inc.


Screening tools used by fortune 1000

Criminal Records Checks 88%

Employment Verification 86%

Drug Screening 78%

Education Verification 74%

Verification of Professional Licenses 59%

MVR Checks50%

Credit History39%

Integrity Testing 7%

Screening Tools Used by Fortune 1000

Confidential


Background information american tescor llc

Founded - 1979 by Dr. Peter Bullard

Headquarters – Phoenix, Arizona

Service Area – North America

Testing Volume – 40,000+ Applicants Weekly

Background InformationAmerican Tescor, LLC

Confidential


Tescor s electronic behavioral assessment

73 Questions about Theft, Drug Abuse, Violence & Lying.

Identifies Applicants with “Entitlement Mentality”.

5th Grade Reading Level. Takes 20 Minutes.

Tescor’s Electronic Behavioral Assessment

Confidential


Tescor s electronic behavioral assessment1

English plus 21 Foreign Language Versions. Audio Versions in English & Spanish.

In Compliance with all State and Federal Hiring Guidelines.

All Electronic Screening & Immediate Results 24/7/365 with/without Internet.

Tescor’s Electronic Behavioral Assessment

Confidential


Benefits of tescor screening

Benefits of Tescor Screening

  • The Tescor Survey has proven to be a powerful tool in improving productivity, employee morale, and earnings. This is accomplished by Reducing:

  • TurnoverSick Leave Utilization

  • Employee Theft (Shrinkage) EAP Utilization

  • Workplace Violence Workers’ Comp Losses

  • Negligent Hiring SuitsSTD Losses

  • Disciplinary Actions LTD Losses

  • Terminations for Cause Group Medical Costs

  • Unemployment Insurance Auto Liability

  • FMLA UtilizationEPL Claims

Confidential


Measuring tescor s impact in reducing workers comp losses

Controlled studies cover over 428,000 workers

Time Frame – 1996 to 2009

# of Companies In Studies – 17

Average Claim Frequency Reduction – 54%

Average Claim Severity Reduction – 21%

Overall Average Loss Rate Reduction – 63%

Measuring Tescor’s Impact In Reducing Workers’ Comp Losses


Tescor produced a 15 improvement in turnover

Data From A National Rental Company

Study Period-24 Months

Tescor ProducedA 15% Improvement in Turnover

Confidential


Tescor s effect on unemployment

Tescor’s Effect on Unemployment

  • Tescor Produced 87% Fewer Unemployment Claims & 89% Less Expensive Claims.

  • National Rental Company

  • Unemployment Claims Study Period 24 Months

Confidential


Short term disability std study period 12 months

Short Term Disability (STD) Study Period 12 Months

In the study, 6,800 applicants were screened with the Tescor Survey. The Unscreened group had a claim frequency rate 40% higher than the Tescor Screened group.

Confidential


Sample industries served by american tescor

Hospitality –Huntington Hotel Group, Hospitality Management Corp

Food Processors – National Beef

Car Rental Agencies - Hertz

Long-Term Care – Kisco, Delta Healthcare, AccentCare

Commercial Laundries – American Linen Supply (ALSCO)

Staffing – TrueBlue, Inc., Joulé Staffing Services

Transportation – KKW Trucking

Manufacturers & Assemblers – Technicolor, Thor Industries

Retail & Distribution – U-Haul, Johnstone Supply, Weis Markets

Building Maintenance and Security – Levy Security, Pacific Building Care, American Building Maintenance

Oil & Gas – Precision Drilling, Diamond Offshore

Construction-Jaynes Corp, CLP Resources, Eplica Corp Cajun Industries

Sample Industries Served By American Tescor

Confidential


Electronic delivery systems

Electronic Delivery Systems

Tescor on the Internet

All Tescor systems provide instant results.

Confidential


Internet hr magnet sample results

Internet: HR MagnetSample Results

Confidential


Screening tools used by fortune 1000

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Tescor scales

Tescor Scales


Theft scale

Sample Question:

Excluding minor office supplies (pads, pens, etc.), what would you guess is the value of things you have secretly taken from work in the past 2 years?

A. None

B. $5 - $25

C. $26 - $500

D. $501 or more

Serious and recent theft only.

Excludes all amounts below $5.

Theft Scale

Confidential


Drug and alcohol scale

Sample Question:

Excluding pills you got from a doctor (prescriptions), which of the following drugs do you use?

A. Cocaine, Coke, Snow, Crack

B. LSD, Acid, Mescaline, Peyote

C. Heroin, Opium

D. None

Only “current use” drug inquiries.

Only job-related alcohol inquiries.

Drug and Alcohol Scale

Confidential


Hostility violence scale

Sample Question:

Suppose you were insulted. Would you hit the person who insulted you?

A. Definitely would not

B. Probably would not

C. Probably would

D. Definitely would

Hostile individuals often interview well.

Hostility often comes out in hidden ways.

99% of all applicants pass this scale.

Hostility/Violence Scale

Confidential


Faking scale

Sample Question:

Since age 16, how often have you told a lie?

A. Frequently

B. Occasionally

C. Rarely

D. Never

More than 90% of all applicants pass this scale.

Faking Scale

Confidential


The science behind tescor

Individuals engaging in aberrant behaviors tend to rationalize their behaviors as normal. Otherwise, they suffer from “cognitive dissonance,” an anxiety provoking state where one’s behaviors are in conflict with their values.

The Science Behind Tescor

Confidential


Scoring the tescor survey

An individual who scores HIGH in any risk category (Theft, Drugs, Faking and/or Hostility) is considered a NONQUALIFIED applicant.

Scoring the Tescor Survey

Confidential


Screening tools used by fortune 1000

Validation ResearchNational Sample - 1,152,358 Applicants


Overall risk

Overall Risk

Confidential


Passing rates for theft scale

Passing Rates for Theft Scale

Confidential


Passing rates for drug scale

Passing Rates for Drug Scale

Confidential


Passing rates for hostility scale

Passing Rates for Hostility Scale

Confidential


Passing rates for faking scale

Passing Rates for Faking Scale

Confidential


Theft behaviors

Theft Behaviors

Confidential


Drug admissions

Drug Admissions

Confidential


Drug and alcohol use

Drug and Alcohol Use

Confidential


Comparing screening tools criminal background checks

Only convictions are reported.

Limited in geographic scope – by county or state.

Not all states have statewide databases

There are 3,380 counties in U.S.

25 states have automated less than 60% of their felony convictions.

Most employee theft is never caught or reported.

Identity theft will not be caught.

Capture Rate: 6%Cost: $25 to $150.

Comparing Screening Tools Criminal Background Checks

Confidential


Comparing screening tools urinalysis limitations

Most drugs (except marijuana) clear a user’s system in less than 72 hours.

Web sites like “urineluck.com” sell clean powdered urine with 200% guarantee.

Subject to legal challenges through faulty lab work, sample mix-ups, or chain of custody.

Capture Rate: 5%Cost: $10 to $50

Comparing Screening ToolsUrinalysis Limitations

Confidential


False negative study midwest based staffing company

Study Background

This Midwest based staffing company primarily serves the light industrial sector. They conducted urinalysis screening on all applicants who passed the Tescor Survey. All those who passed the urinalysis were then subject to criminal background checks.

False Negative StudyMidwest Based Staffing Company

Confidential


False negative study midwest based staffing company1

Study Period: 24 months

25,003Workers Screened by Tescor

19,901Workers Passed Tescor

80% Tescor Passing Rate

Prior to implementing Tescor 5% Failed Urinalysis and

5% Failed for Adverse Background Check

After Implementing Tescor:

142 (.7%)Passed Tescor and Failed Urinalysis

59 (.3%) Passed Tescor and Failed Background Check

201 (1%) Total Tescor False Negatives

False Negative StudyMidwest Based Staffing Company

Confidential


The cost of high risk employees

Thirty-eight percent to 50% of all workers’ compensation claims are related to the abuse of alcohol or drugs in the workplace.

-U.S. Department of Labor

Drug-using employees are five times more likely to file a workers’ compensation claim.

-National Institute on Drug Abuse

Drug and alcohol abuse in the workplace cause 65% of on-the-job accidents.

-Department of Labor

The Cost of High Risk Employees

Confidential


The cost of high risk employees cont

Studies show that alcohol and other drug users use three times as many sick days.

-National Council on Alcoholism & Drug Dependence

Drug users are absent from work an average of five days per month due to drug use.

-U.S. Department of Labor

Substance abusers are 10 times more likely to steal from the company or from other employees.

-U.S. Department of Labor

The Cost of High Risk Employees Cont.

Confidential


The cost of high risk employees cont1

The U.S. Department of Commerce reported that the annual losses generated by poor hires, absenteeism, drug abuse and theft amount to $75 billion per year; and 30% of business failures are due to poor hiring practices.

The Cost of High Risk Employees Cont.

Confidential


Legal compliance

Legal Compliance

  • Tescor has been “litigation free” throughout 30+ year history.

  • Screening tools must be either validated or non-discriminatory – Tescor is both.

  • Federal and State guidelines require protected classes to pass at a rate that is 80% or better, compared to the relevant class.

Confidential


Passing rates of protected classes

Passing Rates of Protected Classes

By Race, Sex and Age

White

80% Rule

Non-White

Male

80% Rule

Female

Under 40

80% Rule

Over 40

Passing Rate (percent)

Confidential


Screening tools used by fortune 1000

Tescor’s Effects on

Workers’ Compensation


Common denominators in expensive comp claims

Common Denominators In Expensive Comp Claims

  • History of Absenteeism

  • History of Disciplinary Action

  • History of Prior Claims

  • History of Drug Abuse

Confidential


Cornell university findings

Screened employees are less likely to file a claim.

The screened employees’ average claim was smaller than the average claim filed by an unscreened employee.

The screened employees’ claim variance was smaller than the unscreened employees’ claim variance.

The average claim cost of all screened employees is less than average claim cost of all unscreened employees.

The screened employees are less likely to file large claims (i.e., > $2000) than unscreened employees.

Cornell University Findings

Confidential


Overall projected workers comp loss reduction

Overall Projected Workers’ Comp Loss Reduction

Confidential


The essence of business

“The first duty of business is to survive and the guiding principle of business economics is not the maximization of profit – it is the avoidance of loss.”

-Peter Drucker

The Essence of Business

Confidential


Hiring the right people

"In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don't have the first, the other two will kill you.” - Warren Buffet

Hiring the Right People

Confidential


Tescor screening improves earnings safety productivity

Tescor Electronic Screening:

Highly Effective

Easy to Administer

Generates Very High ROIs

Tescor Screening Improves Earnings, Safety & Productivity

Confidential


Screening tools used by fortune 1000

Tescor’s integrity test is a highly effective tool in reducing the costs associated with employees’ high risk behaviors. After using the Tescor Survey for a two year period, we conducted a comp benchmarking study for our California operations. Our projected saving was more than $10,000,000 in direct cost alone and greater than a 20 to 1 ROI.Using Tescor’s screening on new job applicants allows us to hire a higher quality employee which also means less turnover, employee theft, and hostile incidents in the workplace.Chris BurgerDirector of OperationsPacesetter Personnel Services

Confidential


Workers compensation

Workers’ Compensation

The Tescor Group’s frequency was 47% lower.

The Tescor Group’s severity was 9% lower.

The combined savings was 52% on an Incurred basis.

Confidential


The cost of loss

On average INDIRECT costs outweigh the DIRECT costs

by a 4:1 ratio.

Direct Costs (Hard Costs)

Medical Treatment

Compensation

Legal Cost

Indirect Cost (Soft Costs from Cash)

Time for Completing Reports Investigation Time

Loss of Productivity Increased Work for Others

Missed Schedules Loss of Worker

Seeking Medical Treatment Cost of Replacement

Paid Time for Treatment

The Cost of Loss

Confidential


Workers compensation1

Workers’ Compensation

  • Closed Claim Study

    • Study Period 48 Months

Confidential


Screening tools used by fortune 1000

"The Tescor Experience"

The Jaynes Companies

  • Regional General Building Contractors

  • Five Companies – Six Area Offices

  • New Mexico

  • Colorado

  • Nevada

  • California

  • Texas, Arizona & Utah

  • Union & Non-Union Employees

  • Average 450 employees 2006 - 2010

  • Implemented Tescor January 2006


Screening tools used by fortune 1000

"The Tescor Experience"

Affected Applicants

Tescor currently administered to all new hire positions in all companies & locations

Tescor currently administered to rehired employees

Stage of Hiring Process

  • Tescor administered immediately after application completed


Screening tools used by fortune 1000

"The Tescor Experience"

Non-Qualified Results

  • 2006 @ 24.94% Non-Qualified Results

  • 2007 @ 23.12% Non-Qualified Results

  • 2008 @ 17.00% Non-Qualified Results

  • 2009 @ 18.75% Non-Qualified Results

  • 2010 @ 18.29% Non-Qualified Results


Screening tools used by fortune 1000

"The Tescor Experience"

Failure Category Results

2006 - 2010

  • Theft Scale @ 11%

  • Drugs Scale @ 8%

  • Faking Scale @ 5%

  • Hostility Scale @ 0%


Screening tools used by fortune 1000

"The Tescor Experience"

OSHA Recordable Incident Rates

Days Away, Restricted, Transfer (DART)

  • 2006 @ 5.58

  • 2007 @ 3.89

  • 2008 @ 4.43

  • 2009 @ 1.87

  • 2010 @ 1.46


Screening tools used by fortune 1000

"The Tescor Experience"

OSHA Recordable Incident Rates

Total OSHA Recordables

  • 2006 @ 7.85

  • 2007 @ 5.33

  • 2008 @ 6.36

  • 2009 @ 3.12

  • 2010 @ 2.62


Screening tools used by fortune 1000

"The Tescor Experience"

Workers’ Comp Costs

  • 2006 @ $0.37 / Man-hour

  • 2007 @ $0.05 / Man-hour

  • 2008 @ $0.26 / Man-hour

  • 2009 @ $0.15 / Man-hour

  • 2010 @ $0.13 / Man-hour


Screening tools used by fortune 1000

"The Tescor Experience"

Attorney Representation

2006 - 2010

  • Non-Tescored Injured Employees

  • 4 out of 90 = 4.44%

  • Tescored Injured Employees

  • 1 out of 94 = 1.06%


Questions answers

Questions & Answers

Si Lamm, CPCU, Managing Director

Phone: 503.697.6551

[email protected]

www.americantescor.com

American Tescor LLC, a division of Merchants Information Solutions, Inc.


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