What Causes Candidates to Fail an Employee Background Check?

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Posted by: David Garcia

Topics: Background Check 101, Human Resources, Recruitment

As a recruiter or hiring manager, you know that background checks are essential to understand whether or not an applicant is qualified for the job and the opportunity to make informed decisions about candidates before hiring them.

Specifically, background checks are essential because they provide information about an applicant's criminal history, education and work experiences, credit score, driving record, and much more.

But what causes candidates to fail a background check?

We're here to help explain the most common reasons.

What Can Be Disqualifying on a Background Check?

Criminal History

A criminal record is one of the first things that employers check when screening applicants and can lead to job applicants’ disqualification during the hiring process.

Eighty-eight percent of hiring managers surveyed by TopResume said they would rethink a candidate who lied about criminal history.

However, depending on an employer's hiring standards and the severity level of crime committed, some recruiters may still hire a candidate if they make their criminal history known (with some exceptions). The key is that the candidate is transparent to you regarding their criminal record before the background check.

Also, it is vital to note that you must use the same criteria relating to criminal activity for all applicants regardless of race or national origin, or you will violate Equal Employment Opportunity Commission (EEOC) regulations.

Inconsistencies

A survey found that 13% of professionals have approximate employment dates on their resumes, but this inaccurate information can raise red flags, cause hiring delays and sometimes lead to disqualification.

Background checks should provide an employer with an accurate representation of all the companies for whom the candidate worked in the past. Pay attention to discrepancies between a candidate's resume and the background check.

It's best to ask candidates directly about any discrepancies you see because they could be clerical errors. However, it's always possible that your candidate embellished their resume.

Significant differences between a candidate's resume and an employment screening may indicate they have something to hide in their job history, hinting at future problems.

Poor Credit History

Employers use credit checks for several reasons. You can get an idea of how organized or financially stable your candidate is, especially if they're applying for an executive role. A potential hire’s financial history will reflect their ability to pay bills on time and manage their debts.

Poor credit history may indicate financial irresponsibilities, such as paying only the minimum amount due, missing payments, or filing bankruptcy. In contrast, a good score means that the candidate has solid money management skills and has consistently kept current on their loans and other accounts.

A bankruptcy or foreclosure six years ago may not necessarily hinder a candidate's performance today if they've managed their finances well since. However, if their financial history raises questions about how they handle money, it's important to explore those concerns further before making any final decisions.

Poor Employment History

Pre-employment checks allow you to verify the information that the applicant has told you, both on their application and in their interview. Building trust is essential, but it is always better to be safe than sorry when hiring.

In competitive job markets, applicants have the incentive to lie or not tell the whole truth about their employment history. You need to know if a candidate has chosen to do this. Hiring an unqualified candidate can be a costly decision, leading to potential liability.

A background check lets you verify that the candidate possesses the education, experience, and skills to complete the job's duties. When you do a background screening, you can feel more confident in your selection. You will know that you are hiring someone who can do the work you need them to do.

A background screening can help your company decrease turnover as well. By verifying a candidate’s credentials, you will be less likely to have to fire people for not fulfilling the job's duties.

Continually hiring new employees drains your company's resources and does not allow it to grow and innovate. In the long run, the savings on hiring and training far outweigh the background screening cost.

Bad Driving Record

A Motor Vehicle Report (MVR) is a summary of a person's driving record. It includes information about the applicant/employee's driver's license status (expiration date), license class (whether the individual has had their driver's license suspended or revoked due to having multiple moving violations), the number of traffic violations they have committed, and if their driver's license has ever been suspended due to unpaid parking tickets, insurance payment issues or failure to comply with court orders.

The purpose of an MVR is straightforward: to provide the employer with insight regarding whether the applicant/employee has a safe driving record.

If you have employees driving on behalf of your company, conducting a pre-employment MVR check makes sense. Like criminal background checks and credit reports for landlords, this screening will help make informed hiring decisions that potentially save money in the long run. It is estimated that, in 2019, U.S. traffic crashes cost employers $72.2 billion - up from $47.4 billion in 2013.

Your prospective hire should also be given a copy of the report under the Fair Credit Reporting Act (FCRA).

What Do You Do When a Candidate Fails a Background Check?

If you have a candidate you really like, it can be a disappointment if they are declined. Before you disregard the candidate, verify that the background records match. There is always a slim chance that the information received is inaccurate due to data entry or database issues.

If you find that the background check matches the candidate, consider the following steps before hiring or rejecting the candidate.

Review the Background Check Policy

Having a company background check policy in place can help you have consistent and quality hiring practices. Management should regularly review the decision matrix to ensure it aligns with the company's hiring needs. Then, if a candidate fails screenings, there is a set procedure to follow before deciding whether they deserve an interview (or offer).

Talk to the Candidate

HR managers know that the information in a background screening process is not always correct. The job candidate should be given the opportunity explain their background check results and informed of their rights under the (FCRA).

The FCRA also states that you must provide an Adverse Action Notice that notifies an employee that they did not get a position due to a background check.

Before providing a rejected candidate with an Adverse Action Notice, we recommend giving them at least seven days’ notice for dispute resolution purposes only.

Make a Decision

Once the candidate has reviewed the background check hiring policy and been given adequate time to explain adverse results, a decision must be made as to whether to hire the candidate for the job.

In Conclusion

Employers should be aware of these factors that cause candidates to fail background checks to be prepared for what may happen and how to approach the different scenarios.

Having a trustworthy background screening partner is essential for your recruiting process and can provide valuable insights when dealing with candidates who fail background checks.

ScoutLogic's Scout service model saves recruiters time by expediting checks, communicating status updates, and going the extra mile on verifications. ScoutLogic also provides FCRA-compliant background investigations with drug testing for criminal records reports — saving you from making costly hiring mistakes.

Contact us today to see how we can help you with your background check needs!

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