Many employers are unsure how to handle applicant references and background checks—or whether they are worth the hassle. Too many business owners believe that these steps in the hiring process are too expensive or time-consuming.
Unfortunately, honesty and forwardness are not guaranteed with job applicants and resumes. Background checks offer one big way to improve your hiring process, while checking references ensures you are making the right hire.
What is a background check?
A background check collects data about an applicant, such as whether they have a criminal record. Additionally, many details on the applicant’s resume can be verified, such as education and employment history. Most background checks are completed in as little as one or three business days.
Background checks are most often conducted during the selection and hiring process for new employees. Checking is also helpful when an entry-level employee is considered for a position with access to significantly more responsibility.
Sooner or later, most employees have opportunities to misuse company resources or private information, and it’s important to protect the company, other employees, and customers.
Why conduct background checks?
Some industries are more vulnerable than others, but background checks are beneficial for the vast majority of businesses.
- Has your applicant been convicted of violent crimes or white-collar offenses relevant to your industry? Will your other employees and customer information be safe?
- When things go sideways, you need to be able to prove that your company has done its due diligence. If an employee hurts someone else on the job, and they have a record of relevant offenses, then questions arise about your screening process.
- Data verification
- Without verifying Social Security Numbers and other identifying information, it’s impossible to know who you’re actually hiring.
- Make the right hiring decisions
- The honest applicants look less impressive beside the people who exaggerate their qualifications. Take the time to sort truth from fiction.
What are the legal considerations?
You’ll need to check state and federal regulations about how to implement background checks. At the national level, the Fair Credit Reporting Act (FCRA) applies whenever your company uses a third party to conduct background checks. Applicants will need to give consent for consumer reports. The Fair and Accurate Credit Transactions Act (FACTA) included amendments to the FCRA.
The Equal Employment Opportunity Commission (EEOC) also has rules about background checks. For example, you can’t decide to run background checks on job applicants because of their race. For most jobs and industries, you also need to be careful about investigating medical information like family medical history and genetic information. The EEOC website provides an overview of the key federal regulations affecting background checks.
What are the different types of background checks?
Depending on your industry, some types of checks may be irrelevant for the job opening. Make sure you cover what’s important.
- Verify the work history and relevant experience of your job applicant. In some states, it’s illegal to investigate the employee’s salary at previous jobs.
- With graduation dates and names of schools, you can make sure that degree programs and certifications were completed.
- Find out whether applicants have been convicted of any crimes, but be careful about how you use the information. The EEOC provides guidelines for considering criminal history without discriminating.
- Consumer Credit
- Vet applicants for positions with financial responsibilities. The EEOC might consider it discrimination if your company chooses between job applicants by running unnecessary credit checks.
- Motor Vehicle Reports
- Irrelevant for most office jobs. MVR checks are required for drivers who operate heavy machinery or company vehicles. Some offenses, like a DUI, would show up on a criminal background check but not the MVR.
- Specific industry mandates
- Verify the qualifications relevant for your industry. Some jobs may require a standardized physical exam or national security clearance.
- Social media
- An employee’s conduct on social media may reflect negatively on your company, but there’s also a division between personal and professional life. Be sure to check for recent regulations in this emerging field.
What “red flags” can appear in background checks?
- Education or employment discrepancies
- Are your job applicants as qualified as they claim to be? A discrepancy may be an effort to cover up a disqualifying incident or employment gap.
- Inconsistent details
- Most resumes present a one-sided history of positive accomplishments, but the specifics should be accurate. An applicant who is willing to bend the truth for a job interview may be unreliable when bigger temptations arise.
- Sanctions, disbarment, or disciplinary actions
- Many fields have their own regulatory boards and internal standards of ethics. Some applicants may not disclose negative information voluntarily.
- Criminal conviction relevant to job
- The “Ban the Box” campaign has made it illegal in certain areas to ask about a job applicant’s criminal record. Obviously, some convictions are directly relevant to the job, like recent DUIs for driving jobs, and Registered Sex Offenders applying for jobs at schools.
Should you verify past employment and personal references?
Yes. There are caveats, of course. You need to get the applicant’s consent before running a background check and contacting current employers.
If the applicant doesn’t want you to contact their current employer, then you should respect that boundary. It’s a reasonable request that shouldn’t have negative consequences for the applicant. In industries where it’s less common to contact references, it’s polite to give applicants a heads-up.
You’ll want to have specific, open-ended questions planned. Tailor your questions to each candidate and try not to “read between the lines,” which could lead to misunderstandings.
How can HR technology help with background checks?
HR software can streamline your whole recruiting, hiring, and onboarding process. Instead of re-entering the same information from paper forms, you can simplify paperwork by going digital. Automation HR technology can make the process more efficient and limit the opportunities for human bias and discrimination..
Whatever path seems best for your business, HR technology allows you to make background checks as consistent and confidential as possible. With sensitive areas like criminal background, you can set filters to only display results that should affect your hiring decision, filtering out the personal information that might cause unconscious bias.
Background checks and references are important, but they’re easy to overlook if your business has “gotten by” without them. Unfortunately, one bad “hire” can lead to huge negative consequences for a business. More likely, you’ll just miss out on hiring the better qualified applicants.
HR software from Netchex allows you to improve your hiring process, adding steps like background checks, without adding to the workload of existing staff.
Industry news & tips sent straight to your inbox!
Enter your email below to subscribe to industry news, product updates, and tips.