Hiring managers are becoming more and more selective, and one of the areas they're focusing on these days is a prospective employee's state of financial wellness (or lack thereof).
According to an early February survey by the National Financial Educators Council, job candidates' financial histories are becoming a part of the scrutiny as they're being considered for a job.
Participants were asked "Have you ever been turned down for a job or promotion as a result of your credit or financial background?" and 4.08 percent indicated that they had been denied a job or promotion based on finances.
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And younger candidates were more likely to lose an opportunity based on their lack of financial savvy.
The survey analyzed data from 6 different age ranges, finding that those aged 18–24 and 45–54 answered "Yes" at the highest rates, 5.3 percent and 5.2 percent, respectively, while 90.5 percent of adults 65 and older indicating that they had not been turned down because of a financial background check.
A previous survey conducted by the NFEC, HR Management Solutions and the Financial Literacy Action Network in March of 2016 found that 5.2 percent of adults aged 35–54 stated that they had been turned down for a job due to their financial profiles.
As of 2012, the Society for Human Resources Management found that 47 percent of U.S. organizations check credit history for at least some positions.
Companies gave reasons including theft or embezzlement prevention and reduction of legal liability for negligent hiring. "Although the Fair Credit Reporting Act stipulates that employers must obtain prior applicant consent for a credit check," the report said, "refusal to give such consent would likely cast the applicant in a negative light regardless of his or her credit background."
The report quoted Vince Shorb, chief executive officer of the NFEC, saying, "To prepare our current and future workforce for the coming changes to the technological and employment environments, it is imperative they gain money management skill sets. Employee financial education programs and other financial wellness initiatives are on the rise, which can help address this issue proactively."
Shorb added, "Being turned down for a job because of their financial background only contributes to the challenges they are facing."
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