Reasons Why Background Checks are Important

One of the biggest issues facing hiring managers and small business owners is finding reputable employees who are going to further a business’ goals. However, employers need more assurance than the quintessential “Trust me, bro” when it comes to asking potential hires about their backgrounds.

A poor background can lead to an assortment of issues for an employer, including liability suits and the lost funds. A background check is essential when looking to hire someone, but many employers wonder exactly what they can tell you, why they’re important, legal challenges in conducting the investigation and why their competitors compete background checks. Read on to put your mind to rest and learn more about why background verification is important.

What do background checks tell you?

Background checks are typically thought of as giving you access to a person’s criminal history, but that’s only part of what they do. Things a background check can provide you with include:

• Identity Verification – Background checks will look through a number of databases for information, including the Social Security Administration and the Department of Homeland Security. This provides employers with the ability to see if a social security number provided is valid as well as who it belongs to and past usage. This can prevent them from hiring someone who is using false information. Background checks can sometimes verify an address as well to ensure the applicant’s information matches up with what they’ve put on their application.
• Employment History – Let’s be honest, we all know someone who has fudged on their resume to land a job. However, we’re usually looking to prevent hiring those people in an effort to get the most qualified applicant for a job. Employment verification allows potential employers to see where a person has worked and sometimes their job title and service length. This puts the ball in the company’s court, allowing them to make a decision on whether or not they want to contact a former workplace to find out more about a potential hire.
• Educational Background – There are numerous stories detailing people lying about their educational background to land a specific job. However, as an employer, you know why you need your employees to have a specific educational background. A background check allows you to see exactly where someone went to school and whether or not they graduated.
• Driving Record – Although not a requirement for every person, a driving record lets you see everything from license classifications to traffic violations to suspensions. These can be especially helpful if you are considering giving someone a company car.
• Credit History – A potential hire’s credit history is one of the newer things a background check brings up, but it can be integral to your hiring decision if you’re in the financial sector. Credit history shows employers how financially responsible a new hire is. High debt loads, frequently missed payments, credit limits, percentage of available credit used and information about tax liens and bankruptcies can help employers make the right hiring decision.
• Criminal History – It’s the quintessential reason most people run a background check. Is that excellent hire someone you can trust? Do they have a checkered past that can potentially put your customers or other employees at risk? Were they honest on their application? A criminal history background check can provide you with the ability to discern whether or not a potential hire will be the right fit for your company. It can end up saving you thousands in the long run as well.

Reasons Why Background Checks are Important

The number one thing we get asked is, “Why are background becks important when hiring an employee?” We’re glad you asked! There are a plethora of reasons a background check is integral to the hiring process. Some of the most common ways a background check can help an employer include:

• Safe work environment – Employee-on-employee violence may not seem like something that’s a huge issue; however, there are a number of employee violence incidents each year around the country. In fact, assaults are the fifth leading cause of death in the workplace with 392 fatalities in 2020 alone. However, this number is just the tip of the iceberg as assaults are common as well. In 2020, 20,050 assaults stemming from employee assault were reported. These events can range from threats and verbal assault to shoving, strangulation and rape/sexual assault. Furthermore, companies are liable for these injuries, resulting in million of dollars lost each year. By looking at an applicant background, you can prevent inviting a potentially dangerous hire into your workplace as well as save your company money by avoiding lawsuits and settlements. If that’s not a win/win, we don’t know what is.
• More qualified applicants – Running a background check is more likely to get you qualified applicants for a few reasons, but the primary one is that you’re more likely to get applicants who are qualified for the position. If hires know a background check is involved in the hiring process, you are less likely to get applicants who are going to fudge on their qualifications. For starters, most aren’t going to want to go through the process only to get told they’re not going to get the job. Others will find they don’t want to deal with getting questioned about their background. Either way, it’s a win-win for employers looking for the right fit.
• Honest interview process – Tying in closely with our last point, potential hires who know a background check is going to be run will be more likely to be honest about their background during the interview. Instead, applicants are more likely to be honest about their history simply because they know you’re going to see it at some point. By having a more honest hiring process, you can instantly rule out potential hires that simply won’t be a good fit for your company as well as saving your resources to run checks on people who are more likely to be a better fit.

Legal Challenges in Conducting Background Investigations

There are a few things to take into consideration when looking at the legality of running a background check, including:

Reason – Background checks can only be run for a handful of reasons when it comes to employment, including hiring and looking to promote. You cannot run a check just to keep tabs on your employee and you will need written permission to complete a check. If you do not have proper approval and a valid reason, you can see yourself getting in trouble with the law via regulations set forth by the Fair Credit Reporting Act (FCRA). Although the name may sound like it relates strictly to finances, it actually ensures any information collected by consumer agencies is accurate and secure. We talk more about FCRA compliance and why you need a reason to run a background check.

Run on everyone – The main thing you need to take into consideration when running background checks is that you are completing all the same checks on every potential hire. While rare, there have been instances of companies only completing certain checks on certain types of people (women, POC). This can lead to a justifiable lawsuit. Instead, take the time to run checks on each potential hire you’re interested in.

Give applicants a copy – One of the most surprising aspects of background check requirements for many people is the fact they need to give the potential hire a copy of the check. This is because they need a chance to look over what information came up and file an appeal if the information is false.

Comply with local laws – Each jurisdiction is going to have its own set of background check laws. Rather than leaving anything to chance, take the time to look over which information you can collect and how it can affect your hiring decisions. For example, California’s background checks can (usually) only go back a decade, rather than a lifetime check, meaning relevant information only applies if it happened in the last ten years.

Why do companies do background checks on employees?

Many people wonder why background verification is important. Luckily, there are an assortment of reasons a background check should be run on applicants, including:

• Identity verification
• Criminal history
• Employment history
• Educational background
• License check
• More qualified applicants
• Keep workplace safe
• Reduce company liability
• Save time and money
• Verify good character fit

Conclusion

Deciding to obtain a background check is one of the best decisions you can make for your company. Background checks can tell you everything from an employee’s criminal history to whether or not they are using their real identity. Background checks prevent you from hiring employees who are not qualified for the job or may have a checkered past that leaves you liable when they make a mistake. However, to ensure you get the best background check, you need to work with a company you can trust. Axiom is dedicated to providing employers with thorough background checks and drug testing to help you get the best employees possible. Learn more by clicking here.