The Big Cost Impact of One Small Hiring Adjustment

Pivoting to a “trust but verify” strategy gives logistics firms a competitive edge

Costs for raw materials, inventory, transportation…they’re all increasing.

Yet, one expense is trumping all others in the logistics and supply chain industry: labour costs.

There simply aren’t enough workers to fill all the open jobs throughout the Asia Pacific (APAC), according to recent industry findings. In turn, this imbalance is expected to catapult the industry’s labour costs roughly 11 percent through the end of 2024.

Knowing this, logistics employers throughout the region are making a slight adjustment to their hiring strategy. It’s a small, but important, change that can trigger cost-saving ripple effects throughout the business.

So…what’s the secret? Background checks.

Employers are stepping up their hiring game. Given the advanced technology powering today’s supply chains and logistics functions—think: automation, AI and machine learning—paired with the inherent risk of theft, terrorism or sabotage within this industry, employers are stepping up their hiring game.

Instead of blindly trusting a candidate’s integrity, they’re pivoting to a “trust but verify” strategy when it comes to assessing a candidate’s skills, qualifications and risk factors. By performing background checks during the hiring process—or after hiring, during onboarding—employers can more quickly and effectively identify qualified talent with the right job-specific skills, while also better understanding and appropriately addressing their risk potential.

This provides several obvious cost-effective benefits, including the ability to:

Recognise and hire top industry talent ahead of competing employers
Quickly hire and onboard qualified workers who can start working and producing, faster
Mitigate against potential risks of fraud, theft and other issues linked to candidates with a history of relevant criminal behaviour

However, background checks can also be cost-effective in other, less overt ways.

Background checks can support innovation. When the world stopped in 2020, so did many supply chains and logistics operations. If the recent past has taught us anything, it’s that this industry must be innovative. Background checks can help logistics employers identify and hire skilled workers who are capable of innovating and advancing the business.

By simply verifying key candidate qualifications with background checks, employers can spot exemplary candidates with the right education, experience and track record of transcendent performance and visionary thinking. It can also help hiring managers better understand how and where to place talent within the organisation so they can best position and equip employees to succeed and start innovating sooner.

Conversely, background checks can expose candidates who may be using falsified credentials. Take the case of Chin Ming Lik, a manager in Singapore who was jailed two years and 11 months and fined $1,600 for resume fraud. In four years, he obtained civil engineering jobs at 38 companies by lying about his industry experience, education, professional certifications and more.

Candidates who forge or exaggerate their background qualifications can cost logistics employers in big ways. Apart from reduced productivity, they’re also less likely to remain on the job, which can increase turnover costs. Likewise, they can seriously jeopardise high-tech operations and outcomes for the business, its customers and supply chain partners.

Background checks can help grow and protect the business. Using background checks for risk mitigation is less about creating barriers to employment, and more about better understanding candidates and matching them with the right opportunities to help grow and protect the business.

For example, the criminal information revealed in a background check may not always be relevant, but it’s always important for the employer to be aware of it. Say a candidate was convicted of a theft-related offence. If the job in question involves working at a logistics software firm, it may not matter. However, if the candidate is applying for a commercial truck driver position with unsupervised access to valuable cargo, a history of theft is more concerning. Instead of offering the candidate a driver position, an employer might consider him for another role within the business with more oversight and supervision.

In a challenging labour market, this strategy enables logistics employers to hire qualified candidates with “less-than-perfect” backgrounds and safely put them to work in “good fit” positions that help boost the company’s productivity and performance levels.

As today’s APAC logistics and supply chain organisations search for new ways to compete for skilled workers in coming years, more are relying on employment background checks. Background checks can be a competitive and cost-effective hiring tool that helps employers quickly identify qualified talent in a pool of unknown candidates and quickly put them to work. Yet, when used strategically—for the greater good of candidates and the company—background checks can help employers better understand how to securely position and support candidates within the company to profitably advance their business over the long term.

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