Tracy Coenen, a forensic accountant and the author of “Essentials of Corporate Fraud,” says that examining the financial situation of a prospective employee is one of the top tools companies have for preventing embezzlement.
“Financial difficulties are correlated with the propensity to commit fraud,” she says. “If you’re hiring for a position where someone will have access to money, you want to know whether they’re having financial difficulties.” Academic research on this matter is mixed. (A 2008 study found a correlation between financial history and workplace theft; a 2011 study found no such correlation.)
It would be fair to say that the rationale for employers wanting to look at credit reports is debatable and employers seem to agree. Only 47 percent say they check credit; perhaps the other 53 percent can build a competitive advantage hiring all the great workers who are passed over for other jobs because of bad credit.
Some employers ask prospective hires about any number of things that are of debatable relevance. Some employers like to hire former athletes; there is no conclusive evidence that they are the best workers (Lenny Dykstra and Curt Schilling, say hello), and it could be argued that such a hiring bias is unfair to those who aren’t athletically inclined or whose parents, because of their religious beliefs, banned their children from playing. Should the U.S. government bar employers from asking candidates if they played sports in high school?
There is also mixed research on whether graduates of elite colleges make particularly great employees. (One researcher argues that World of Warcraft players make better employees than Harvard grads.) And a 2012 analysis of Harvard undergraduates found that 45.6 percent came from families with household incomes above $200,000 — putting them in the top 3.8 percent of American households. Is an elite education too correlated with class (and, by extension, race and ethnicity)? Should we bar employers from asking candidates where they went to college?