Why are Pre-Employment Background Checks Important?

As an employer or hiring manager, performing a pre-employment background check allows you to verify and confirm the details supplied by a candidate. It will reveal any information your applicant may have inadvertently or intentionally neglected, such as residency in a location where the candidate may have a criminal history.

Background checks can help you run a safe and productive business, as well as help prevent you from making a bad hire.

According to studies, it costs an average of $30,000 to replace a salaried employee. Business owners may lose an amount equivalent to six to nine months of the departed employee’s salary when replacing a salaried worker.

Background checks for job prospects are the most basic and practical approach you can take to help minimize the potential costs that could result from a bad hire.

What Does a Pre-Employment Background Check Include?

A background check examines a person’s name, birthday, and social security number to gather information from both public and private databases.

A background check may reveal anything from arrest records to civil judgments, so the results will differ depending on which sort of search you request.

In general, a background check for employment may contain identity verification, employment verification, credit history, driving history, criminal records, educational confirmation, and more.

Here are additional details on some of the various background checks available:

Identity Verification 

There were 13 million victims of identity theft in 2020. Surprisingly, the most prevalent reason for identity theft is employment or tax-related fraud, which made up 34% of all instances. You may feel more at ease knowing that your candidate is who they claim to be if you conduct a complete identification check.

A background check also verifies whether or not the person is qualified to work in the United States.

In addition to these items, your report should include SSN (social security number) verification. This has several advantages, including verifying that the candidate’s SSN and name are correct.

Criminal History

A criminal history background check typically includes searching local, state, multi-state, or national databases and federal district courts to see if an applicant or employee has a felony or misdemeanor conviction.

Employers should know that applicants with criminal records are protected under Title VII of the Civil Rights Act of 1964 and the Fair Credit Reporting Act (FCRA), prohibiting employment discrimination. Employers should be aware of their responsibilities under both laws regarding pre-employment criminal background checks.

If you decide to reject a job applicant based on their criminal history check, you must adhere to the FCRA laws.

Education 

Certain occupations need applicants to have a particular degree. Hiring someone who lied on their application may negatively impact company efficiency and even expose your business to risk. A recent survey found that 33% of employers have caught interviewees lying about their degrees.

Education verification reports should always include the highest degree obtained, graduation date, institution name, and areas of study.

This information may assist you in determining whether a candidate meets all of the job requirements prior to hiring them.

Motor Vehicle Records

When driving is a requirement of the position, this background check will reveal details about prior accidents, infractions, suspensions, and felony and misdemeanor DUI convictions.

The amount of information you can get from a motor vehicle check varies by state. Some states only keep records for three years, others for as long as 10.

Knowing a potential employee’s driving history is critical for a role that requires driving, but it can be useful for other positions too. The way someone drives can reflect their commitment to safety, sense of responsibility, and respect for a company or personal assets.

Credit Check

To identify any issues or areas that need closer attention, employers may request a credit check which searches nationwide through the major credit bureaus for mistakes or suspicious activities.

Public record information includes:

• Bankruptcies
• Tax liens
• Civil judgments
• Payment history
• Foreclosures
• The number of derogatory or unpaid accounts
• The number of open accounts

More businesses are requiring credit background checks on certain candidates due to concerns about growing rates of employee theft and fiduciary concerns. Credit reports contain financial information that may help employers evaluate a candidate’s level of overall responsibility.

Employment history 

Employment verification is a form of background check that seeks to determine if the information supplied by an applicant matches their actual employment history.

Employment verification checks can assist your company by verifying that a job applicant has the necessary experience for specific jobs. They can reveal if an applicant was dismissed due to significant infractions or incompetence.

Why Are Pre-Employment Background Checks Important?

Why are pre-employment background checks so crucial, and what are the other benefits of conducting due diligence on a candidate for your firm?

Let’s look at some of the benefits that thorough background checks provide:

A Safer And More Secure Work Environment

Remember that employers are under a legal obligation to safeguard the company, staff, and customers from any foreseeable action by an employee or volunteer. You don’t want to get yourself into a negligent hiring scenario due to careless recruiting practices.

According to a study done by the United States Department of Justice, more than 1.8 million workdays are lost each year due to workplace violence.

Regularly conducting background checks helps safeguard your organization by ensuring that your employees are as safe as possible. All companies should place a high value on maintaining a safe work environment for all workers.

Prevents Risk of Negligent Hiring

Employers could be held responsible for negligent hiring, which can have significant consequences for businesses, employees, and clients. Job candidates frequently lie on their resumes — false work experience information, forged documents, hiding criminal records, identity theft are examples of this.

A candidate may meet an employer’s skills requirements, but their pasts might be questionable.

Only background checks can detect this, ensure a safe work environment and avoid situations that may tarnish a company’s reputation.

Higher-Quality Employees

Background checks can reveal information about potential employees’ prior employment and success. This might help you pick individuals who are honest and trustworthy.

Background checks are essential for senior executive positions. Many things must be considered when hiring a senior management position, including leadership abilities, strong emotional intelligence, and past performance in both qualitative and quantitative terms.

Background checks allow you to make informed judgments and help create higher-quality hires.

Work With A Background Check Provider Like ScoutLogic

Working with a background check company is crucial for conducting pre-employment checks successfully and efficiently.

Not only is it difficult to get information from all of the necessary sources, but there are also several federal and state regulations that employers must follow.

If you perform a background check on your own, you run the danger of receiving incomplete data or creating legal risks. It’s preferable to hire a third-party provider with extensive expertise in delivering accurate background checks.

That said, you should not choose any screening service at random to do your background checks.

Get in touch with one of our experts at ScoutLogic today to simplify the background screening process. We’ll assign you your very own Scout that will work as an extension of your team.

Contact one of our ScoutLogic employment background check experts today to get started!

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.