Is your company using background checks to weed out undesirable applicants? If not, you could be missing out. 

Background checks are a useful way to narrow down your list of applicants. They go beyond simply ensuring a safe work environment for your employees. You can get background checks for someone’s work history, educational history, and certifications. If there is something listed in the applicant’s resume, you can use a background check to verify it. To ensure high-quality job candidates, you need to use background checks at your company. 

Do You Conduct Background Checks on Candidates Before They Start Work? 

At Asure, we recently completed our 2024 HR Benchmark Report. It looked at eight key HR practices and included 40 questions. During the recruiting and hiring segment of the survey, we asked over 1,000 small businesses if they ran background checks on job candidates. 

We found that the answers to this question varied based on whether the company had fast growth or zero growth during the preceding year. 

  • 81% of fast-growth businesses use background checks.
  • 67% of zero-growth companies use background checks.

This spread represents one of the largest differences we had on any question. Fast-growth companies are aware of the benefits of background checks, and they are achieving better business success by performing them on candidates.

10 Reasons Why Background Checks Happen at Fast-Growth Companies 

There are a few important reasons why fast-growth businesses are more likely to use background checks than zero-growth companies. 

1. Avoid Major Mistakes 

With background checks, you can avoid costly mistakes. If you have to train a new worker to replace a bad hire, the training costs can add up. For low-wage workers, it costs 16% of the employee’s salary to train a replacement. With highly skilled positions, it takes a whopping 213% of the employee’s salary.

More importantly, background inquiries help you avoid major mistakes, like hiring someone who has a history of assault convictions to work with children. These mistakes don’t just impact coworkers and your retraining costs. They can end up harming your company’s reputation as well.

2. Ensure Better Money Management 

During a recent Mission to Grow podcast on, “Recruiting and Hiring,” Mary Simmons, Asure’s VP of compliance, learning, and development, discussed a major reason why background checks are so important. She shared a story of a recent consultation with a firm that employs around 120 employees.

“Their finance team tends to turn over relatively fast, and they can’t figure it out. We looked at the job descriptions and the ads to make sure that they are setting expectations.

“But then I said, do you do background checks? Now, this is a $36 million company with five people managing the finances. And they said no. I inhaled sharply. They went, why should I? And I said I recommend it. They’re working with the organization’s money, so I definitely would recommend it.”

If someone is handling your money, you want to make sure they haven’t been convicted of fraud or larceny. Especially for high-level positions, you will also want to see that their qualifications, certifications, and experience match their resume.

3. Check the Accuracy of Resumes and Skills 

Background checks can do more than just look for criminal records. They can also help you verify the accuracy of someone’s resume and skills. There are many different varieties of background checks, so you can choose the option that works for your company.

4. Reduce the Risk of Fraud and Theft 

One of the major benefits of background checks is that they can decrease the risk of fraud and theft. This is especially important if you’re hiring someone to manage money and financial matters. Before you put an individual in a position of responsibility, it’s important to make sure they can handle it.

5. Prevent Liability 

With a background check, you can see if there are any criminal records that could lead to liability issues. For instance, if someone has a history of drunk driving, you probably don’t want them driving a company car. Likewise, you don’t want a person who has a history of violence working one-on-one with vulnerable population groups.

6. Weed Out Undesirable Employees 

One of the biggest benefits of background checks is that they allow you to weed out undesirable employees. Hiring and training workers is expensive, and you don’t want to waste money on training poor hires who will end up quitting or getting fired right away. Additionally, background checks help you find individuals who are more likely to fit in with your company’s culture.

7. Become More Productive 

Background checks can potentially make your company more productive. For example, someone who lied on their resume likely doesn’t have the appropriate qualifications to learn new tasks and perform the job properly. If hiring the wrong people leads to a higher turnover rate, you’ll end up spending more money on replacements and less money on improving revenue growth. 

8. Spend Less on Hiring and Training Costs 

When someone isn’t a good match for your organizational culture and can’t handle their day-to-day job, they are more likely to quit. As a result, you have to spend more money advertising the job posting, interviewing candidates, and training a new hire. It’s hard to become a fast-growth company if you don’t have qualified workers in the right positions.

9. Discourage Applicants with Shady Histories 

Many companies overlook the value of having background checks as a deterrent. When shady applicants know that they’ll be background checked, they are far less likely to apply. These applicants know that a previous criminal record or lack of qualifications will come up, so they are less likely to waste their time applying and interviewing for a job they can’t get. 

10. Keep Other Employees Safe

Background checks ensure your customers are dealing with a reputable person, and they can help you protect your brand’s reputation. They can also keep your employees safe. If you want to retain your best workers over the long run, you have to create an environment where they feel happy, comfortable, and secure. 

How Do Ban-the-Box Policies Affect Background Checks? 

Ban-the-box policies vary widely from state to state. They are designed to help people get jobs after a previous criminal conviction. 

While ban-the-box policies can vary from one state to another, these laws generally ban asking about criminal histories during the application and interview process. Once you’ve made a conditional offer of employment, you can still do a background check for criminal history issues. 

However, there are only certain situations where you can act on the results of the background check. In general, the criminal violation must be directly related to the individual’s ability to do the job. While you could decide not to hire a delivery driver who has a track record of DUIs, you’d have to hire the same person if they were just performing an office job.

Remember These Best Practices for Background Checks 

To make sure that you don’t have any issues with implementing your background checks, remember the following tips. 

  • After you’ve made a conditional offer in ban-the-box states, you can run the background check. 
  • Under state laws and the Fair Credit Reporting Act (FCRA), employers must give applicants written notification about using a third-party provider to perform a background check. 
  • Notify the employee that you are using the background check to make employment-related decisions. 
  • Perform all screening policies equally. If you background check some applicants, you need to background check all applicants. Otherwise, you open yourself up to potential discrimination lawsuits. 
  • The FCRA requires certain steps to be followed if you take adverse action against an applicant. Talk to an employment lawyer or HR expert before you act to make sure you’re in legal compliance. 

Learn More About the Advantages of Using Background Checks in the Hiring and Recruitment Process

There are a number of major benefits to performing background checks. By performing these checks, fast-growth companies are able to reduce their hiring and training costs. They can also improve the quality of workers they hire and discourage questionable applicants from applying. 

While setting up background checks can feel daunting, Asure makes it easy. We incorporate the cost of background checks into our HR services, so you can screen candidates without worrying about the added cost. 

To learn more about Asure’s services, reach out to our team of small business payroll and HR experts today.

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