What Causes a Red Flag in a Background Check?

Background checks are a typical component of the recruiting process—and for a good reason. Recruiters hope that candidates are being forthright and honest in presenting themselves, but a background check is the most effective way to verify the information a candidate shares. It can give you a fuller picture of an applicant’s work and personal background, for better or for worse.

So what happens if your company performs a background check on a candidate that comes back with a red flag? A screening may uncover something concerning in the applicant’s history. And while they may ultimately still be a good fit for the job, it’s up to your company to take further steps to investigate.

Here, we’ll help you understand what causes a red flag and how to protect your business from hiring the wrong people.

8 Common Red Flags on Background Checks

Certain signs on a background check could have significant implications for your company if you proceed to hire the candidate. Here are some common red flags and why they matter.

1. Inconsistency in Information

One of the primary goals of the hiring process is to determine if the candidate is trustworthy, honest, and reliable. Employers can accomplish some of this through interviews and reference checks. But what if a candidate represents themselves as someone they are not on their application and during interviews?

In that case, your company must have all the necessary information before making an offer. Background checks are a primary means of protection from this type of misrepresentation.

Suppose a background screening shows different places of employment or different educational history than what an applicant listed on their resume. In that case, that’s a huge red flag that needs further investigation. People typically will only lie if they feel they are unqualified for the role or if they are trying to hide something.

Even if the candidate possesses good qualities and credentials in some areas, the lie can tell you a lot about the person’s character. Stop and consider if this is someone you want to represent your organization before moving forward with hiring.

2. Gaps in Employment History

Proceed with caution if someone has significant gaps in employment on their resume. It can reflect a candidate’s inability to hold down a job.

You want to ensure your staff can play a consistent, long-term role in your company, and long stints of unemployment could mean they aren’t reliable.

A background check can also provide information about places of employment that may not appear on the candidate’s resume. While this is often for innocent reasons, such as a past job not being relevant to the current application, it also could point to adverse actions at a previous workplace.

3. Short Lengths of Time at Companies

If someone is “job-hopping,” this may show up on a resume or background check as sporadic, short periods of employment at different companies. These short spurts of employment can point to a lack of reliability, similar to extended gaps in unemployment.

There are valid reasons for short stints at a company, such as seasonal or temporary work contracts or internships. If you notice this trend in someone’s job history, ask them about it.

Perhaps they had to relocate due to a family emergency out of state or a serious conflict, such as harassment, at the workplace that wasn’t their fault.

If the candidate doesn’t have reasonable explanations for why they spent so little time at a given company, hiring them may not be in your best interest.

4. Criminal Records

Not all criminal records are cause for adverse action, and they needn’t prevent someone from getting a job at your company, especially if they have taken the necessary legal steps to right the wrong. That said, certain types of criminal backgrounds may pose a risk to your organization.

If you are an accounting firm, you likely don’t want to hire someone with a history of fraud or embezzlement. Similarly, someone who has a history of theft should not be in charge of inventory management, and people with violent criminal charges on their record should not work with children.

Looking for job-related convictions can help prevent your company’s liability if an incident were to occur at your workplace.

5. Suspicious Credit History

Roughly 16% of employers run credit reports on candidates as part of the screening process. It’s a common misconception that companies try to get information about an applicant’s credit score. Usually, they are after totally different information contained in these reports.

Credit history contains a whole slew of information, including past places of employment, affiliated educational institutions, and more. Credit reports can verify a person’s identity and give a unique insight into a person’s financial life.

While financial well-being may not be a key criterion for some jobs, for others, it may be. Would you want to hire an accountant who can’t keep their finances in order?

6. Negative References

Reference checks are a classic step in the screening process. And while it’s not necessarily a bad sign if a past employer expresses a minor issue or conflict with the candidate, you should take note if the same problems come up with multiple different references.

Habits die hard. If someone routinely behaved negatively at past employers, can you expect things to be any different at your company?

7. Failed Drug Screening

While only a tiny fraction of jobs these days require drug testing as part of the hiring process, there are some industries where they’re still mandatory.

It is particularly true of jobs that require staff to operate heavy machinery wherein drug use could be a considerable danger or liability for the company. If this is the case, a failed drug test is a major red flag that recruiters should not overlook.

8. Refusing a Background Check Entirely

Before conducting a background check, a company needs explicit consent from the applicant. If someone refuses to participate in a background check, it likely means they know something will show up that they don’t want you to see.

Conclusion

Evidence suggests that 78% of job seekers admitted to either lying during the hiring process or would consider lying to get a job. And while it’s not uncommon to embellish credentials or skills on a resume to highlight yourself in the best fashion, some lies could have damaging consequences for your business.

Don’t let dishonest candidates get the best of you. If you want to upgrade your company’s background check and screening procedures, ScoutLogic is here to help.

David Garcia

David Garcia, co-founder and CEO of Scout Logic, is an industry leader in the bulk background check world. With his strategic acumen and expertise in the HR sphere, specifically in hiring, recruiting, legal compliance, background checks, and resume screening, he’s an invaluable asset and consultant.

David's counsel extends across the boards of ScoutLogic, YipitData, and Supplier.io, drawing from his impactful stints on the boards of Infutor and Avetta. With an extensive 25-year journey, he champions unparalleled B2B commercial leadership within data & analytics, significantly shaping the HR landscape.