Think back to some of your past hires. Perhaps you met a Susan, who seemed to have the perfect references. Or, a John, whose education credits made him the intuitive pick for the role. But soon they proved to be poor hires for your team. And it was only when you were trying to figure out what went wrong that you realized Susan’s references were outdated and John had embellished his resume.
Outright lying about one’s credentials is not very common among candidates, but “embellishing” does happen. And it can lead to poor hiring decisions that, in turn, cost you, not just in time and money, but also in productivity and morale.
The good news? All this can be avoided with a pre-employment background check.
What is a background check?
An employment background check is exactly what it says on the tin: ensuring the information a candidate has provided about themselves is accurate, and also there’s nothing suspicious or worrisome about their employment, credit, or criminal history.
Running a background check for employment is more common than you might think.
An SHRM survey found that 92% of employers conduct employment background screening. And while 87% do so at the pre-employment stage, there’s also a 15% that rescreens workers annually. Additionally, the same survey showed that 10% screen employees when they’re promoted or change jobs.
So, what is usually covered in a standard pre-employment background check? It depends on your location and your local and federal laws, as well as on the different regulations that may apply within your industry.
The standards:
- Identity verification: This is to confirm that the basic information your candidate has provided, like their name, social security number, birthday, and whether they have the right to pursue employment in your country, are accurate.
- Criminal history: While the process and specifics may vary based on where you’re located, criminal history checks your candidate’s records for outstanding warrants or convictions for felonies and misdemeanors. For US-based companies, this extends to checking candidates’ potential records with the Homeland Security, the FBI, the Drug Enforcement Administration, and the National Sex Offender Registry databases.
- History of employment and references check: Your candidate may list an impressive employment history on their resume— but is it accurate? The pre-employment background check will verify that the companies the candidates listed as previous employers were indeed places they worked in and that their references are valid.
- Education verification: In a similar vein, this check will verify that the candidate attended the university courses and programs they stated they have and that there are records within those institutions regarding the candidate’s attendance, grades and degrees.
The extras:
- Credit background: Based on your industry, and on the role you’re hiring for, you may also need to run a credit check on potential employees. This is important if they’ll be working within finance: you want to make sure they don’t have any history of bankruptcies or embezzlement convictions.
- Licenses background check: Again, this is industry-specific, but if the role requires a license (like a medical license, teaching credentials, or other government-issue credentials) then it should be part of your pre-employment background check. Same goes if the position requires handling vehicles: you need to ensure your candidate’s vehicle records are in order and their licenses have not expired.
- Fingerprint-based check: This will only be relevant in safety-sensitive positions like healthcare and childcare (and certain positions in finance.) A fingerprint-based background check was more common before the pandemic, so you should find out what applies to your industry now.
Keep in mind that before you decide to run a pre-employment background check, you should consult with a lawyer. They will pinpoint what information is and what information is not allowed to collect based on your industry and regional regulations, as well as how to do so.
Why run a background check
Replacing an employee costs one-half to two times their annual salary—not to mention the disruption it causes among your employees. With that in mind, running a pre-employment background check allows you to make smarter hiring decisions, which is essential for both company growth and seamless day-to-day.
Done correctly, a background check can show you a candidate’s past performance—which can be a great indication of their future performance within your company. By making sure their qualifications check out and that there are no character concerns, you increase the chances that your new hire aligns with your needs and values. This helps you improve employee retention in the long run.
Running a background check is also a good way to ensure you’re building a workplace that is safe for all, and that you’re not compromising your company culture by bringing in an individual who could be dangerous or unsavory.
Additionally, there is a compliance and insurance angle to all this. If you hire a candidate whose licenses have expired and they’ve managed to withhold that information from you, it could cost your company higher insurance costs, compliance fees, or even unnecessary lawsuits.
How to run a background check
In general, a background check is not something you can conduct fully by yourself. The legislation may differ depending on the area where you operate, but, in most cases, you’ll need to work closely with a legally-compliant Consumer Reporting Agency or background screening firm, which will help you develop the right screening program for your needs.
The process of vetting candidates may look different from country to country or even from state to state And you always need to make sure you’re compliant with your local legislation before you decide to run (or not run) a pre-employment background check.
In most states, you need to procure written permission by the candidate before conducting a background check on them—but if they refuse, you are allowed to exclude them from the selection pool. You’re also not allowed to check a candidate’s medical information or genetic information and family medical history. You may also need to provide the candidate with a copy of your background report and information on how to contact the background screening firm you used.
In most cases, a pre-employment background check won’t take more than 72 hours to complete. However, as we’re still amid the Great Reshuffle and it’s hard to retain top talent, hiring surges may cause delays in the process.
Finally, with the rise of remote and hybrid workspaces opening the doors to international talent, background checks can be a bit more complicated. Nowadays it’s not uncommon for a candidate to have education credits from one country and employment history from another, which means your firm will have to check records from different countries and potentially request for verified translations (if the records are originally in a different language than English). This should also be baked into the allotted time you have set for the background check.
A successful hiring decision relies on multiple factors
And background checks are only one of them. For example, you’ll need to assess candidates’ skills through assignments and check if they’re a culture fit through behavioral interview questions.
Then, what you do once you’ve hired them also matters. A good candidate will turn into a great employee if you invest in them, help them grow their skills, and give them opportunities for career growth.
The first step, though, is to build a structured hiring process, specifically one that includes background checks. This will lead to better decision-making—and therefore a better organization.
