Background checks help businesses safeguard assets

Kelly Murphy
Kelly Murphy

For most businesses, human capital constitutes their most expensive asset, an investment owners and managers must administer wisely. If you were shopping for a vehicle for your outside sales department, you’d likely research reliability and safety reports as well as review the repair history. The same holds true for human capital.

Every business wants competent, honest employees who deliver great customer service. Businesses also have a responsibility to maintain a safe workplace for employees free from known hazards — including other employees. Moreover, businesses must consider the security implications for certain jobs, including those involving finances or caregiver services.

While many employers believe background screening only covers criminal searches, screening offers a lot more in helping them hire the right employees. That includes everything from verifying identity and educational and work histories to credit and finance reports to alcohol and drug use screening. Some industries — health care and child care among them — require more. That’s a lot to track.

How do businesses ensure they make compliant, sound hiring decisions? Unfortunately, some candidates exaggerate or even mislead employers to secure a job. On occasion, applicants lie about their work history, educational accomplishments and even professional licenses.

Once a candidate moves through a well-established recruitment process, the next step verifies what they said in the interview and review process is actually true. Background and reference checks remain the principal means of securing information about potential hires from sources other than the applicants themselves.

According to the results of a 2018 survey conducted by, 95 percent of responding employers performed one or more types of background screening for employment. Employers cited a variety of reasons: ensuring protection for customers, vendors and employees; increasing the quality of new hires; legal requirements; protecting brand and reputation; and guarding against theft and other criminal activities. It takes time takes to complete screening, but employers must weigh the risk of a negligent hire against the time required to get it right.

Once businesses determine background screening is in their best interest, they have two options: perform screenings in-house or hire a professional third party company. It’s important to take into account how legal requirements and compliance issues affect background screens — including the Fair Credit Reporting Act, Fair and Accurate Credit Transactions Act, Equal Employment Opportunity and Immigration Reform and Control Act. Such issues as defamation of character, invasion of privacy and negligent hiring also can arise. Given the difficulty in keeping up with legal and regulatory requirements, many businesses hire professional companies to perform background screenings. Some businesses prefer third party research options to maintain objectivity.

Choosing a partner for background screening might seem like a daunting task. With the right knowledge, though, business owners and managers have the tools they need to select the perfect partner.

Consider the following criteria: basic accreditation with the Fair Credit Reporting Act, affiliation with the National Association of Professional Background Screeners, online applications and disclosure forms, online review processes with accurate reports in language understood by administrative employees and compliant authorization and informative forms for completion by candidates.

Businesses also must decide how often to conduct background checks. The decision could depend in part on insurance requirements for liability coverage. Does an initial background check suffice for the life cycle of the employee? According to the Society for Human Resource Management, about 15 percent of employers surveyed screen employees annually. But most of those come from such high-risk industries as the financial, health care and transportation sectors. While some companies screen every two years, what happens when an employee commits an offense within the two-year period? Some background companies have addressed this issue by offering continuous screening.

Background screening presents disadvantages in cost and time as well as the fact they’re not foolproof. But business owners and managers serve as stewards over their work forces and customers and must exercise due diligence in protecting the company and public with employees who’re qualified and capable of promoting operations that have taken years to build.