Employees are often a business’s most valuable investment. While identifying, screening, onboarding, and training new employees take extensive resources, it’s in every business’s best interest to get the process right to hire good people. Hiring the wrong person not only costs time and money, it can have larger legal and reputational implications.
Given the importance of making a good hiring choice, many businesses choose to conduct background checks on job candidates. While background checks may be standard practice for many larger organizations, small businesses have much to gain, since a single employee issue may have a large impact. Regardless of size, businesses should understand both the benefits and limitations of employee background checks so that they can choose the service that will help them screen for the best applicants.
Background Check Benefits
Hiring a new employee without conducting a background check is equivalent to inviting a stranger to live in your home, according to a recent article in Business News Daily. Screening employees before hiring them won’t ensure that you get the best worker; however, it can weed out employees who might prove unsuitable—or even put your company at legal risk.
For instance, all businesses must complete an I-9, Employee Eligibility Verification form for each new hire, affirming that the employee is authorized to work in the U.S. If this information turns out to be incorrect, the business is at risk of being fined, whether or not it submits the information knowingly.
Some industries, such as financial services, may have specific licensing and certification requirements upon which employment is contingent. A background check can ascertain whether applicants have the proper credentials, since failure to comply can result in fines, audits, or other penalties.
Finally, a specific aspect of a potential employee’s background may determine whether they are a good fit for that job. For example, a background check might reveal that a candidate for a delivery driver job has committed numerous moving violations in the past two years.
While background checks can reveal important information about potential new hires, businesses are limited in what information they can collect and how they can use it. For instance, businesses must comply with the federal Fair Credit Reporting Act (FCRA), which mandates that individuals, including potential new hires, be provided with certain disclosures about what information a business is collecting on them and how it will be used.
Most importantly, businesses may not use information acquired through a background check to discriminate against a potential employee based on race, national origin, color, sex, religion, disability, genetic information, or age. The U.S. Small Business Administration and Equal Opportunity Employment Commission both have helpful information to make certain that businesses collect and use information properly when screening employees.
Choosing a Service
Once a business has decided to check the background of potential new hires, it must choose what type of background check service to use. Full-service background check companies do all of the investigation and reporting work on behalf of the business, while background check websites allow businesses to conduct their own online searches.
Online services may be quick and inexpensive, but according to Business News Daily, they’re not always the best choice. Many are not FCRA compliant, and there’s no way to verify results, since they use online information that may be outdated, incomplete, or even incorrect. Though they may cost more and take a slightly longer time to produce results (often a few days), full-service companies are usually more thorough. They typically employ investigators who can contact educational institutions and former employers as well as access court documents.
Innovatix members have a number of contracted background search suppliers to choose from, including eVerifile, MBI Worldwide, Pre-Employ.com and Private Eyes. All comply with the Fair Credit Reporting Act and offer
- criminal checks
- DMV searches
- credit checks
- electronic I-9 verification
- education and employment verification
- professional references
- accreditation and licensing verification
- drug testing
It pays to check out pre-employment background checks. You’ll be protecting both your business and its most important investments.