Risk Insider: Frank Russo

Hire for Integrity

By: | May 26, 2016

Frank is the Senior Vice President of Risk and Legal Affairs and Privacy Officer for Silverado Senior Living, a nationally recognized provider of memory care assisted living, home care and hospice services. He can be reached at [email protected]

As risk managers we are all too familiar with being awakened by calls in the dead of night involving major incidents, accidents, injuries or events. The root cause of many of these misfortunes is often our employees and — unfortunately — their bad habits.

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In more cases than we’d like to see, the bad outcome may have been caused by a negligent, careless, hostile, disgruntled or even criminal employee.

Yes, we all have (or should have) strong safety protocols and policies and procedures in place to prevent these accidents from occurring. In addition, we all provide (or should provide) risk management and safety training to our employees, especially after these serious events occur.

But all the training in the world won’t offset a bad hire. So what if we had a risk management time machine? What if we could go back in time and prevent that disastrous event from happening by not hiring the employee who was responsible? What would that be worth to you and your organization?

What if we could go back in time and prevent that disastrous event from happening by not hiring the employee who was responsible? What would that be worth to you and your organization?

At Silverado, we assessed our hiring process to determine if we could mitigate and reduce risk based on how we hire. Our conclusion? Yes, we absolutely could.

We looked at traits common to what we would consider “bad hires,” and the shared traits of employees who were terminated for cause and/or caused or contributed to an avoidable accident.

Several years after making the decision to include risk management in our hiring practices, our claims data and new safety culture has validated our initial belief.

The Importance of Integrity

Warren Buffet said, “In looking for people to hire, you look for three qualities; 1. Integrity, 2. Intelligence, 3. Energy.” At Silverado, we incorporated an integrity screen for ALL new hires companywide a couple years back. To work for Silverado, you must pass this test.

I understand we all need to be profitable to survive. So adding an extra step and upfront expense may seem unnecessary or even impractical, especially for something that isn’t a state or federal requirement.

But we concluded early on that it was the right thing to do in order to employ the safest and highest integrity employees possible.

In our case, these employees are providing care to thousands of vulnerable memory-impaired individuals whom we are entrusted with every single day. Knowing care is being provided by high integrity people is extremely important to us.

We also know that any cost or time associated with it will be paid back tenfold by a reduction in claims (and related hard and soft costs). And we have the data to prove it.

Two years after making integrity screens part of the Silverado culture, we wanted to look at the effect on our risk data.

The University of Arizona ran an in-depth two-year independent study on our employees who took the integrity test and those who didn’t. This study specifically addressed workplace injuries (workers’ compensation claims) and focused on frequency and severity. The results showed even greater impact that we anticipated.

  • Incidence of any claim being filed is nearly 3 times as strong among non-test takers.
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  • Incidence of a claim exceeding $5K is nearly 4 times as strong among those who never took the test.
  • Incidence of a claim exceeding $20K is nearly 12 times as strong among those who never took the test.
  • Internally we also found that hiring for Integrity positively affected our turnover rate as well as our professional liability frequency.

At Silverado we have found that higher integrity equals lower risk. By hiring for integrity we have successfully been able to mitigate risk from the initial hiring process and prevent many injuries (and associated costs) before they ever occur.

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The R&I Editorial Team can be reached at [email protected]