6 Benefits of Background Checks

Employers view background checks as a valuable tool that provides comprehensive insight into an applicant. There are many tangible benefits that go beyond confirming a prospective recruit has been honest in their application.

Companies can use pre-employment screening to check candidates’ education records, licenses, criminal convictions, and employment history. With the benefits spilling over into improved retention and workplace safety, it ends up being money well spent.

If you’ve ever hesitated to use more of the recruitment budget on background checks, you’ll want to keep reading. You might be surprised to see how many benefits background checks can offer your company.

What Are the Main Benefits of Background Checks?

Background checks offer a wide range of benefits to employers. They help hire the right staff and contribute towards the overall success of an organization, whether that means higher profits or improved reach.

Here are six key benefits of undertaking background checks when you recruit.

1. Increase Job Applicant Quality

Making pre-employment checks front and center at the recruitment stage discourages people who hope to hide serious issues. It encourages applicants to submit accurate resumes, reducing misstatements and discrepancies.

Candidates with a genuine background and verifiable qualifications will come forward. You’re more likely to attract applicants who feel encouraged by the fact that an employer is thorough and values honesty and integrity.

The flip side of this is that running pre-employment checks deters poor candidates or applicants with something to hide in their employment history or personal record. Either way, these screenings increase the quality of job applicants. 

2. Improved Quality of Hire

Weeding out unsuitable candidates and ensuring that what appears on a resume is true helps employers select the right candidate for a role. 

Screening out underqualified applicants also means saving the company precious time. Hiring managers only have to interview quality applicants and those who are genuinely suitable. It’s a practical way to ensure a strong candidate pool and improve the quality of hires.

3. Avoiding Negative Publicity and Cost to the Company

Dishonest staff could cost your organization, damaging its reputation and incurring negative publicity. There may also be financial losses resulting from bad press due to a rogue employee.

Background checks verify employment records and discover illegal or criminal activity which applicants may otherwise hide from view. Vetting all aspects of a prospective employee makes all the difference between a good and a bad hire.

4. Ensuring a Safe Workplace and Staff Security

According to the US Department of Justice, workplace violence leads to 1.7 million lost workdays each year. 

There is also a substantial financial impact in lost wages—more than $50 million annually. This figure doesn’t reflect expenses like legal costs or potential damage from negative publicity.

Employers have a duty of care toward their employees. Everyone knows the rules about a safe workplace in the physical environment. However, this duty of care also extends to the selection and behavior of other staff members.

If it comes to light that your organization was guilty of negligent hiring, there could be lawsuits that follow a workplace incident. 

The risks aren’t only for people with a criminal history of violence. For example, suppose a recruit has a criminal record or problems like substance abuse. An incident at work in which the employee driving a company vehicle drives while under the influence could create a situation that spills over into the workplace, affecting other employees, customers, and the public.

Some employers choose compassion and give people a second chance. However, some industries and sectors have a higher legal and moral duty when vetting applicants. These include working with children, the elderly, or vulnerable people; jobs that involve accessing private residences or living quarters; and roles that have access to personal information, such as financial records and medical data.

The key is that an organization makes that decision with full possession of all the facts, which is what a background check will deliver.

Background checks reduce the risk of a negligent or bad hire and protect companies from liability lawsuits. They allow employers to make fully informed decisions with all the information necessary about an applicant’s poor employment record or personal issues. 

5. Preventing Employee Dishonesty

Background checks are an extremely effective way to prevent employee dishonesty. Employee fraud results in an average loss of 5% of annual revenue. The numbers are even more alarming for small companies, which face 28% higher chances of fraud loss and 30% of business failures.

Besides the financial cost, employee dishonesty negatively affects staff morale, productivity, and company reputation. For financial and company culture reasons, it’s not worth bringing on dishonest workers.

6. Reducing Staff Turnover

Hiring staff and taking time to train and upskill them is expensive. Finding out your effort and financial investment has been in vain is a waste of time and money. Not only that, but a high staff turnover sends the wrong message about your company and will put off the caliber of people you should be attracting. 

Auditing and adjusting recruitment protocols to select quality staff is one of the known fixes for high staff turnover. Far better to get it right in the first place and invest in the right people.

Frequently Asked Questions

What Advantage Does a Background Check Have Over a Resume or a Reference Check?

A background check covers an individual’s identity, education, and work history. It can focus on one aspect, like employment records, or be universal.

A resume or reference check gleans insight from one or two previous employers. It provides personal insight into an applicant but won’t cover their entire employment history.

Final Thoughts

Background checks help companies hire the right people for their jobs, promoting quality staff and ensuring a safe and productive workplace.It pays to get it right the first time. If your organization needs reliable, swift background checks, call ScoutLogic today. Our scouts can do everything from education and employment verification to mass recruitment. Get in touch today for your background check needs.

David Garcia

David Garcia is the co-founder and CEO of ScoutLogic. David is also a senior operating advisor for Norwest Venture Partners. David is a member of the boards of ScoutLogic, YipitData, and Supplier.io and was formerly on the boards of Infutor and Avetta. He has over 25 years of B2B commercial leadership experience in data & analytics companies.