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Should You Perform Employee Background Checks?

Posted by Tasnim Ahmed

October 19, 2020

Investing in a new employee requires a huge investment of money and time, so many businesses prefer to perform employee background checks so they can find out more about a potential staff member before making things official. An employee background check involves a review of personal, criminal, employment and/or financial records. The extensiveness of a background check depends on the employer, business and the kind of job profile you are going to fill.

Verifying a candidate's details provides employers with the satisfaction that they are selecting a person who is genuine and will not hamper the reputation and environment of the company. Check out the pros and cons of employee background checks and how to perform them properly.

Pros of Employee Background Checks

  • Offer Peace of Mind

    – Pre-employment background checks can give you peace of mind that the person you are bringing into your company has been telling the truth about their past education and employment history, and that there won’t be any surprises in those areas.
  • Improve Selection Process

    – Background checks before hiring can help you be aware of candidates with a criminal history or legal issues. You can also use them to verify the education and employment details of potential new hires.
  • Ensure Overall Workplace Safety

    – Background checks for employment purposes can help you reduce violence and theft in the workplace by avoiding bad hires. They therefore allow you to provide a safe environment for employees and customers. Some jobs are considered high-trust positions, such as handling finances or security, and background checks are necessary to find trustworthy candidates for these roles.
  • Minimize Risks and Liabilities

    – Avoiding potential violent or criminal behaviors can help you reduce liabilities and legal costs. Therefore, to avoid having liabilities due to negligent hiring, you must check the authenticity of the candidates’ resumes.
  • Reduce Costs

    – Hiring the right candidate at the first attempt can help you reduce the costs of training, recruiting and retaining the wrong employee.

Now, Check the Cons

There are many benefits of performing background checks of potential hires, but there are also a few challenges that you can face while doing background checks, such as:

  1. There is some information that is hard to access during a background check, such as civil suits and judgments or records of arrest.
  2. Companies need to invest a lot of money and time into conducting background checks.
  3. Background checks may delay the process of hiring, and sometimes the candidate may join another organization during this period.

How to Conduct Background Checks

There are two common types of employment background checks: Pre-employment background checks conducted during the hiring process and ongoing background checks of current employees. Here is a step-by-step approach for running background checks in a legal, fair and consistent manner.

Step 1: Develop a Policy

Before conducting background checks, you should have a clear company policy in place. Be sure to include all the information you need in your policy document and communicate it to employees and short-listed candidates. If you are planning to do it on your own, seek legal assistance to understand the role of local laws in employee background checks. Taking legal advice can also help you stay away from any potential complications.

Step 2: Use an FCRA-Compliant Service

If you opt for a third-party employee background check service, make sure it is FCRA (Fair Credit Reporting Act) compliant and specializes in the area of background checks. Third-party involvement can help you run reliable and legal background checks on candidates. They know the sources to turn to and understand which information may be inaccurate. An FCRA compliant service provider can protect you from lawsuits related to a background check because they know the rules and regulations that govern this topic.

Most background check services provide you with an option to pay for either a preset package of screenings or only the specific ones you want. Using professional background check services can provide employers with reliable and accurate information gathered from trustworthy databases.

Step 3: Notify Applicants and Get Consent

Inform all applicants up-front that your company conducts pre-employment background checks. This may prompt employees to volunteer information ahead of time if they know you’re about to discover something questionable. In addition, obtain written authorization from the candidate if you use a third-party to perform background checks. However, if you are conducting inquiries on your own, check the laws that govern whether you need consent ahead of time. Even if you don’t, it can still be a good practice to get an employee’s consent before performing the research.

Step 4: Carefully Review and Follow up on Results

Provide applicants an opportunity to correct or explain a misreporting. If you are planning to rescind a job offer, share the facts that you found and discuss why they matter. Sometimes the information that you’ve received can be incorrect, so giving candidates a chance to rectify those misunderstandings would be a good practice to employ.

Step 5: Save Your Records

Keep your background check records even after closing the job posting. It is prudent to save these records in case a former applicant inquires about their report sometime later. You can also use this information while running background checks next time.

What to Include in Employee Background Checks

With the increasing number of fraud incidents, conducting background checks has become necessary for many people who hire. The following types of background checks may help you hire candidates who have a higher potential to align with your needs and company objectives.

  1. History of Employment

    – You should check the references given by the candidates to confirm their behavioral and working patterns with previous employers. This can help you verify dates of employment, pay history, job title, nature of the job once held and work quality of the candidate.
  2. Criminal Records

    – Checking the criminal history of candidates before hiring is vital, especially for finance and security jobs, to maintain the safety of your workplace. With a criminal background check, you can determine if a candidate has any arrests or a history of violent behavior.
  3. Credit History

    – You can also check the credit rating of your employees by performing background checks.
  4. Terror Watch List

    – Checking the terror watch list is imperative for security or military jobs in particular.
  5. Identity Checks

    – This includes a proper background check of different names, aliases, dates of birth, history of addresses, etc.
  6. Court Records

    – Checking court records can help you discover employee involvement in any court proceedings. It includes conducting federal or statewide criminal searches, a sex offender database check or drug cases.
  7. Education and Employment Verification

    – You should verify these details to find out the authenticity of the different credentials provided by the candidate you are planning to bring on board.
  8. Medical Records

    – In some cases, employers may check medical records to inquire about a staff member’s ability to perform a specific job. For instance, a TB test result may be required for anyone working with children.
  9. Driving Records

    – In case your employee would be required to drive a company-owned vehicle, you must check their driving records and license.
  10. Military Service Record

    – Reviewing a candidate’s military service record can allow you to assess the dates they were in the service and the details of their experience.


Tasnim Ahmed
Tasnim Ahmed

Tasnim Ahmed is a content writer at Escalon Business Services who enjoys writing on a multitude of subjects that include finops, peopleops, risk management, entrepreneurship, VC and startup culture. Based in Delhi NCR, she previously contributed to ANI, Qatar Tribune, Marhaba, Havas Worldwide, and curated content for top-notch brands in the PR sphere. On weekends, she loves to explore the city on a motorcycle and binge watch new OTT releases with a plateful of piping hot dumplings!

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