How to Use Background Checks to Pre-Screen Prospective Employees

5 Keys to Doing a Back Ground Check on Potential Employees

Business people using computer in office to run a background check on a potential employee.

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Background checks are a critical component in hiring. When it comes to your business, you cannot afford to make a poor hiring decision. In fact, for most small-mid-sized businesses, one bad hire can make the difference between success and failure.

According to the U.S. Chamber of Commerce, 30% of small business failure is caused by employee theft. Effective background checks mitigate your risk of hiring objectionable, or even dangerous, employees.

In today’s economic environment, every business must cut costs anywhere they can. Your business is no different and your survival depends on figuring out where you can save money. One of the biggest expenses for businesses is locating, interviewing, and training new talent. Therefore, a hiring decision should be made with careful thought and consideration.

One of the best and most cost-effective ways to ensure that you make a smart hiring decision is to prescreen candidates through background checks. Not only do background checks cut down on bad hiring decisions, but background checks also proactively protect your company. Here are some of the basics about background checks that you need to know that will assist you to keep your employees safe.

Protect Your Legal Liability With Background Checks

Small businesses often forgo candidate background checks for one of two reasons. The first is the false sense of security and trust that small business owners develop working closely with their employees.

The second is that most business owners don't understand the legal liabilities associated with candidate screening and background checks.

Any business in which employees interact with or provide a direct service to customers, such as daycare or contractors, is liable if an employee does harm to a customer and it turns out that the employee had a previous history of wrongdoing. A small or medium-sized business may never recover from such a lawsuit.

You may also find that your business insurance provider offers a discount on coverage if you do background checks to pre-screen when hiring your employees.

Select Vendors to Do Background Checks

Because of potential employer liability and to protect the interests of your workplace and your customers, work with a background screening company you trust.

While employers can do background checking on their own, working with a reputable, experienced company can ensure the thoroughness and reliability of the background screening.

Before choosing a company to help you with background checks, research and make sure it is the best service for your company’s needs. Companies that do background checks come in all shapes and sizes and are built to service different types of customers.

Make sure that the company you choose to do your background checks has a toll-free number answered by a real person who can help with your questions. In addition, when selecting the company that will do your background checks, ask to speak to previous customers.

Do a Google search to see what comes up when you research the company. If a company has few or negative results, move on and use a different provider of background checks.

Purchasing instant public records is not appropriate for doing potential employee background checks. If you confirm your hiring decisions based on that type of public record data, you can find your company in hot water. The instant databases out there are just that—databases. Most do not fact check, clean up, or refresh their information very often, if ever.

In order to perform background checks, you must have the potential employee’s consent. (Many job applications have a line for the signature of the employee authorizing the potential employer to do background checks.)  

In addition, a reputable company, that provides background checks, will make sure that the data you receive is current and, most importantly, accurate.

Understand the Fair Credit Reporting Act Before Background Checks

The Fair Credit Reporting Act (FCRA) was set up to protect a job seeker’s privacy rights and to give them recourse if an employer makes a hiring decision based on inaccurate data found during background checks. First, an employer must get a job seeker’s written consent to perform background checks.

Second, if an employer makes a hiring decision based on information found from the background checks, they must inform the job seeker of the source used for the background checks (which is where the instant sources and databases can get your company in trouble).

Compliance with the FCRA is easy once you know what to do and a good background checking company will help you as well.

Pay for Only the Background Checks You Need

One common trend in companies that do background checks is to encourage businesses to purchase every piece of information they can find about a potential employee and charge a lot for these background checks. If your business needs to know everything about a potential employee, by all means, go pay for these extensive background checks.

However, if you are hiring a teleworking employee to program your website, as an example, a reference check, a criminal background check, and a technical certification background check should be all you need.

Supplement Background Checks With Web Searches

You can and should supplement your background checks with a web search. Since anyone can enter anything they want on a social network profile, doing a Google search is not a source of trustworthy information about a potential employee’s background.

However, the web search is a great supplement to background checks because you can obtain insight into who the person is and what types of things they blog about or write on their profiles.

Don’t just look for reasons not to hire the potential employee, however; you might actually confirm your hiring decision. You may find that, in addition to his or her positive background checks, your potential employee is extremely smart and passionate about their profession and that your company can’t live without them.

You can create a happy ending—for both the employer and the employee—through effective background checks.

Disclaimer: Please note that the information provided, while authoritative, is not guaranteed for accuracy and legality. The site is read by a world-wide audience and employment laws and regulations vary from state to state and country to country. Please seek legal assistance, or assistance from State, Federal, or International governmental resources, to make certain your legal interpretation and decisions are correct for your location. This information is for guidance, ideas, and assistance.