Why It Pays to Always Run a Background Check

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The last guy you interviewed looked pretty good. He made eye contact and wore a nice suit.

He graduated summa cum laude, his resume says. Plus, you have a good feeling about him, and you’re almost never wrong. You may just take a chance and hire him.

What could happen?

But wait: With just a little digging, you might find that his college degree is a lie. With a complete background check, you might uncover everything, including his lengthy rap sheet and successful career as a con artist.

Reasons why you need a background check

You want to trust people. But with 53 percent of resumes and applications containing some sort of falsification, you’d be a fool to rely on the resume alone.

Conducting a background check can definitely slow down your hiring process. And yes, it will cost you something. However, I always run a background check when I want to hire someone — it keeps me from hiring a bad egg.

Here are some more good reasons.

  • You have a responsibility to your customers. The people you hire reflect your business decisions. You could lose valuable clients when your new executive secretary can’t work a multi-line phone and drops all your calls, or a new waiter steals an account number and cleans out a customer’s bank account.
  • You have a responsibility to your other employees. They count on you to make good hiring decisions. But we’ve all seen the headlines — just say “disgruntled employee,” and we can pretty much fill in the rest of the story. If that doesn’t convince you, say something terrible does happen on the job. You can be held liable for negligent hiring if a jury decides against you (which they often will). That can cost you millions.
  • You have a responsibility to yourself and your business, in which you have invested so much. Imagine discovering that a key employee has embezzled from you since Day 1. Now think about the possible newspaper headlines, embarrassment, and serious cash down the drain. Plus, it will cost you even more money to find and train a replacement.
  • And finally, one more good reason: It can really tick you off when you find out you’ve been lied to. That can make for a really bad day.

So, who ARE you really hiring?

I want to avoid all that trouble. So when I find someone I want to hire and the candidate accepts my offer, I want to know just who I’m hiring.

I start by contacting their references and finding out as much as I legally can. The candidate completes an assessment, which helps me define their skills and attitudes. Then an outside company runs a secure background check, and I order a drug screen.

Note: If you’re going to conduct a background check, you must follow the laws. Before you start, the candidate must sign a release form according to the Fair Credit Reporting Act (my applicants sign this release when they complete their application.) You also must follow state laws, as well as ADA and EEOC guidelines. (For more laws, refer to our List of Employment Regulations for a Small Business.)

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Also, you can try doing it on your own to save money, but a background screening company will probably have better luck and more thorough results. They know the laws, and at around $125 for the background check and drug screen, I just let them do their thing.

If negative information comes to light, you have to decide what to do with it. You may choose to ignore a misdemeanor from a candidate’s college years, but may find that a later drug conviction is a deal-breaker. We developed a background check decision matrix to help us make these decisions, but they’re not always easy. Especially when you find out surprising information about someone you want to like.

Always play it safe

As the employer, you must notify the applicant before and after you take an adverse action based on what was found in a consumer report. We follow the FCRA and give the candidate the consumer report and a copy of their rights so they can challenge or correct the information. (For more on your responsibilities, read this article from the Federal Trade Commission: Using Consumer Reports: What Employers Need to Know.)

If you decide to withdraw the job offer, proceed carefully. You must have a solid business reason to do so, and your hiring policy cannot negatively affect any protected classes (race, religion, etc.) You also can’t bar an individual based on only a conviction record; you must also weigh the nature and gravity of the offense, when the conviction happened or the sentence was completed, and the type of position.

If you’re not sure how to proceed, play it safe and seek legal counsel.

Hiring people is serious business, so take it seriously and run a background check. You’ll be glad you did.

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