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Good Job Markets Can Warrant Careful Background Checks

We found this article in the New York Times.
Job Market Ends 2006 on Strong Note

By JEREMY W. PETERS
Businesses added many more workers to their payrolls last month than economists expected, and their pay rose at a healthy clip — further evidence of strength in the job market despite a slowdown in the economy.The Labor Department reported this morning that nonfarm employment grew by a net 167,000 jobs in December, seasonally adjusted — more than enough to absorb natural growth in the work force. The figures for October and November were revised upward as well. Wall Street had been expecting a gain of only 100,000 jobs in December.The national unemployment rate remained unchanged at 4.5 percent. Those who were unemployed in December were out of work for a shorter period of time, on average. And the percentage of the total American population holding jobs rose to 63.4 percent, the highest level in more than five years.Average wages have been outpacing inflation by enough of a margin in recent months that workers are seeing some of the biggest real gains in their paychecks in four years. Much of the credit goes to the fall in energy prices since the summer, which has brought overall inflation down and allowed the average worker’s pay to go farther.Tightness in the job market has been driving wages upward, economists say. With unemployment so low — the 4.4 percent reading in October was the lowest in five years — employers have found themselves having to bid up pay a bit to fill vacancies.Compared with the same month a year earlier, average hourly wages were up 4.2 percent in December, the government reported today. The figure for November was revised up slightly to the same rate in today’s report; they are the highest readings since February 2001. The average number of hours worked was unchanged in December.

Today’s labor market report apparently disappointed many investors, who had been hoping that the slowdown in economic growth would prompt the Federal Reserve to start cutting interest rates. On Wall Street, stocks fell in morning trading as bond prices dropped sharply, both indications that many investors no longer believe that interest rates will be cut any time soon.

Earlier this week, newly released minutes from the Fed’s December policy meeting indicated that a majority of central bankers believe inflation remains too high, even though it has moderated recently, and that price worries overshadow any concerns about a slowing economy. Rising wages and a strong labor market are likely to be seen as adding to the inflationary pressures.

Even so, not all areas of the job market were robust last month. With the housing market in a slump, builders barely added any jobs in December, after cutting jobs in October and November. Downsizing in the American auto industry helped contribute to an overall decline in manufacturing jobs last month. For the year, manufacturers shed a net 72,000 jobs.

But the services sector of the economy showed considerable strength. Professional and business services added a net 50,000 jobs last month; health care providers added 31,000 new jobs, and so did hospitality businesses like restaurants and bars.

“These data purport to show very little cross-infection from the manufacturing slowdown and construction crunch into the rest of the economy,” said Ian Shepherdson, chief United States economist with High Frequency Economics, in a research report today. “This does not mean it will not happen in the future, but it does mean that the pressure we expected to see on the Fed to ease in the first quarter has not yet materialized.”

Corra likes good news. And this is certainly good news. Few things are better than a robust job report, especially one that indicates wage hikes in most sectors. Needless to say, heavy hiring keeps HR Managers busy, which in turn keeps us pretty busy. All right, so not everyone is happy about the news since interest rates will not be cut in the near future. But hey…life is a series of trade offs.
Of course a tight job market means recruiters are competing for the best talent out there. But even in a tight market, perhaps especially in a tight market, HR Managers should always be thorough in conducting preemployment screenings. A bad hire can be expensive in retraining and legal costs and damage overall employee morale. So run a criminal background check and credit check.
For those employers who are concerned if your workers are legitimate or not, we suggest the Social Security Trace. This will validate the social security number, tell who it belongs to and list the previous addresses where your candidate has resided. With the government cracking down on employers who hire undocumented workers, the few bucks you spend for this search is a real good idea.
Remember what Corra tells you, check them out before you hire.

By Gordon Basichis

Gordon Basichis is the Co-Founder of Corra Group, specializing in pre-employment background checks and corporate research. He has been a marketing and media executive and has worked in the entertainment industry, the financial, health care and technology sectors. He is the author of the best selling Beautiful Bad Girl, The Vicki Morgan Story, a non-fiction novel that helped define exotic sexuality in the late twentieth century. He is the author of the Constant Travellers and has recently completed a new book, The Guys Who Spied for China, dealing with Chinese Espionage in the United States. He has been a journalist for several newspapers and is a screenwriter and producer.