Any organization needs good people behind it to be successful. If your business is growing, chances are it’ll take a larger workforce to keep it running effectively. While it may be exciting as an employer to see so many new faces around the workplace, expanding your organization’s hiring process can also open it up to new risks.
That’s where employee background checks come in. Here’s everything you need to know to decide whether they’re right for your business.
What Is a Background Check?
Despite what your teachers told you, you probably don’t have to worry about your permanent record from school. Instead, other records — like criminal, commercial, financial or employment records — are what background checks use to chronicle someone’s life.
These checks are commonly conducted before an employee is hired, but sometimes they may be done periodically throughout a worker’s employment as well. What’s included in a background check investigation can range from Social Security verification to work history, education, credit, criminal and driving records, references, property ownership, drug tests, military records and more. The most extensive character checks might even involve interviews with friends and neighbors. A background check typically takes up to three days to complete, depending on how involved it is, and may cost between $25 and $35 per person.
How Background Checks Reduce Security Risks
As you bring on more new hires, the risks your business faces will change — and grow in number. Companies with more revenue are more likely to be sued; they’re also more likely to be the target of scams. If someone was found guilty of embezzlement, you don’t want to hire them to manage your finances. And if your company handles trade secrets or sensitive information, a competitor might attempt some form of corporate espionage, such as bribery.
Background checks can uncover unexpected issues with potential hires that might otherwise come back to bite you. If you hire a driver with a DUI record and they get in an accident, your business might be liable. Accidentally adding someone to the team who was involved in workplace violence or sexual harassment could put your employees at risk.
Especially if you’re in the middle of a rapid expansion of your workforce, these are the kinds of flags that you might not pick up on while leafing through a huge stack of resumes. Even with a pair of eagle eyes on every application, more than 40% of resumes contain false or altered information — meaning you can’t rely on them alone.
Are Background Checks Right for Your Business?
How do you figure out whether background checks are the right move for your business? Start by looking into the costs — both in terms of money and time — versus the long-term benefits. Most businesses hire a third party to perform their background checks. The Society for Human Resource Management suggests verifying that the screener is accredited by the National Association of Professional Background Screeners and complies with federal regulations, something your lawyer can help you determine.
Once you decide that background checks are a good investment, your next question is how extensive your checks need to be. Some businesses may want a review that includes credit and character checks if the employee will be handling money or sensitive information. If the employee will be driving, then driving records and vehicle records are smart inclusions. Education and work verification, along with criminal checks, are generally a good idea for any hire. Some employers additionally opt for continuous monitoring that checks for background changes, such as new license suspensions for employees who drive on the job. Only do as much checking as you need to: The bottom line is to focus on what’s directly related to the job and avoid going overboard.
Legal Considerations to Keep in Mind
Consider talking to a lawyer before you jump in. The laws surrounding background checks can be complex, and if you’re hiring a third party to perform your checks, you’ll need to follow the guidelines of the Fair Credit Reporting Act. This includes getting consent and sending specific notices if you don’t hire a candidate. You’ll also need to follow rules about what types of records you can review (keep in mind that these rules might vary depending on the applicant’s salary). On top of that, there are state laws to consider, too. Have a lawyer review everything closely to ensure that you’re not forgetting about any rules.
Employee background checks are a useful and empowering resource for employers who want more of a say in the kind of workplace they’re building. For many organizations, the investment is worth it to protect the company from future liability and help employers feel confident in the foundation they’re setting for the business’s future.
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