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As the old saying goes, “Hire the best, reject the rest.”

While we’d all like to think we’re sound judges of character, the truth is that many times, there’s more than meets the eye with job candidates.

What’s more, small and medium-sized businesses often function like a family, where employees tend to wear many different hats, and the chemistry and cooperation among colleagues is paramount to the business’s success. In situations like this, the stakes are high when it comes to whom you choose to hire.

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So how do you know you’re bringing the right person into the fold?

Background check services for small-medium businesses are the most effective way to ensure you’re hiring the right people for your organization. Not only will they help you avoid hiring the wrong candidates — they can also help you find your organization’s next Elon Musk-level superstar.

But what exactly is a background check? Simply put, a background check is the process of gathering an applicant’s information and records to review and evaluate their employment background, credentials and behavioral history.

Typically, background checks reveal or confirm critical information about a candidate, including:

  • Honesty: Is everything that is presented on the candidate's resume true?
  • Reliability: Can you count on the candidate to deliver on the tasks you hired them for?
  • Skills and experience: Does the candidate actually possess the skills, knowledge and abilities necessary to do the job?
  • Trustworthiness: Can you trust the candidate in sensitive of critical areas of the business, like financing, driving a company vehicle, or working around children?
  • Teamwork: Will the candidate interact well with your other employees and customers?

Knowing an applicant’s full history goes a long way in predicting his or her job performance and behavior.

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What Happens If You Don’t Run a Background Check?

Most employees have nothing to hide, right? It’s easy to assume that because nothing bad has happened in your organization, you won’t hire someone who becomes a liability. However, skipping the background check could mean trouble for your business.

Passing over this important aspect of the hiring process won’t just increase your chances of missing out on the Elon Musks of your applicant pool; it’ll increase your chances of coming under fire and experiencing negative (and avoidable) consequences as well.

Research shows that more than one third of applicants admit to lying on resumes, and a full 78% of job seekers applying for positions at every organizational level have lied at some point during the hiring process.

That’s a lot of deception to sift through, and there’s a very limited chance you’ll be able to dig up the full truth solely by conducting manual Google reconnaissance and reference spot checks.

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Why Should You Use a Background Check in the Hiring Process?

Background checks have become a best practice among many organizations. According to a report from HR.com, a full 83% of respondents screen all their full-time employees, and 67% screen all their part-time employees.

Setting aside the resources to invest in background checks ensures a level of guaranteed transparency when bringing a new employee onboard, and empowers you to:

  • Improve your quality of hire
  • Protect your employees, patrons, reputation and the public
  • Minimize your organization's exposure to risk and employee liability
  • Encourage candidates to be truthful on both their application and in their interview
  • Weed out candidates who have something to hide
  • Provide peace of mind through doing your “due diligence” during the hiring process

By taking precautions at the front end of the hiring process, you’re setting your organization up for success throughout the employee lifecycle by using a combination of factors — including the resume, interview and background screening — to determine if a candidate is indeed the best fit for your company.

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How Much Does a Background Check Cost?

While you might avoid background checks and assume you can make good, gut-level hiring decisions, it’s important to be aware that the cost of hiring the wrong person can be astronomical — as much as 30% of that person’s estimated first-year earnings. So if someone was expected to make $50,000 during their first year on the job, the cost of hiring the wrong person could set your organization back $15,000 on average.

Not to mention, a bad hire could cause damages that lead to thousands or even millions of dollars in negligent hiring lawsuits.

On the other hand, setting yourself up for success on the front-end of the hiring process costs far less, and benefits your organization far more by bringing in workers who will boost your company’s performance (instead of inhibiting it).

How Long Do Background Checks Take?

Another reason you may be inclined to sidestep background check is time. When you need to hire someone quickly, you don’t have time to wait days, or even weeks for the results of an employee screening, right? Fortunately, the timeframe for these types of screenings is relatively short.

With today’s background check technology, you can get results within 72 hours or less, so you don’t have to worry about it holding up your hiring process.

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Types of Background Checks

For small and medium-sized businesses especially, background checks provide need-to-know information that can help you determine whether you’re choosing the right candidate. And thankfully, there are plenty of solutions that organizations like eKnowID provide to help you narrow down your options and feel secure in your hiring process.

Remember, depending on the employee and the nature of the position, some candidates will require deeper, more thorough background checks than others. Here’s what you should know about pre-employment background checks, including the most common types and how they work.

Verification Process

You can think of this type of screening as confirming that the information on a candidate’s resume is accurate and matches the contents of the screening. Usually, the employment verification screening includes some or all the following information about your candidate:

  • Companies They’ve Worked For
  • Job Titles
  • Dates of Employment
  • Salary
  • Reasons for Leaving

Usually, this information is confirmed by contacting the candidate’s prior places of employment.


Background Check

Pre-employment background checks run the gamut of information regarding your candidate. The best part? Much of this background check process can be conducted online. There are many reasons to run an online background check, not the least of which is that it helps speed the process along by returning accurate information to you quickly.

For instance, you can collect information about a prospective employee’s criminal reports (more on that below), employment background, credit history, eligibility to work in the United States, and more. You can also quickly identify a number of red flags when running a comprehensive background check online.


Criminal Screening

Nearly one in three U.S. adults has a criminal record — and this statistic doesn’t account for misdemeanors. Criminal background checks are useful when you’re determining if a candidate is trustworthy, truthful and if he or she may pose a threat to other employees. This type of screening includes information around felony charges, misdemeanor charges, pending criminal cases, and any history of incarceration. These screenings can help you protect your assets, decrease your risk and steer clear of getting caught up in a negligent hiring lawsuit.


Credit Check

Nearly half (47%) of employers conduct credit checks on prospective employees. Credit checks are strongly recommended for roles where employees will be responsible for handling large amounts of money, bookkeeping, company account management, transactions or other money-related responsibilities. These types of checks include information about bankruptcies, student loan debts, car and mortgage payments, and a candidate’s payment history, including late payments or defaults.


Driving Record

When you’re hiring for positions like delivery drivers, truck drivers or traveling salespeople, it’s critical to mitigate your risk with a review of candidates’ driving records. This could include traffic violations, suspended licenses, revocation of a driver’s license, what type of license a candidate has, whether it has any usage restrictions and more. Knowing this information ahead of time can help you avoid on-the-job accidents or negligent hiring lawsuits.


Background Check

A surprisingly large number of applications misrepresent their educational background. In fact, 40% have or would lie about graduating from a prestigious university when in reality they were a few credits short. You can use a background screening to verify that the education, certification claims and training listed on a candidate’s resume are accurate.


Application Check

The beauty of an employment application check is that this type of background screening will reveal almost all the areas on an application where a candidate has lied, giving you a fuller sense of his or her trustworthiness.


Why Background Checks Matter

Background checks can make all the difference between surviving with so-so employees or thriving with the best possible candidates. When it comes right down to it, would you rather have a finite, $1 million grant from the government, or would you rather hire the next Elon Musk, Bill Gates or Mark Zuckerberg? While $1 million sounds like a lot, imagine the possibilities if you were able to hire an employee (or team) capable of launching your business into the stratosphere. Background checks can help you do just that by identifying red flags and confirming desirable qualities and credentials.

Plus, when it comes to the employment choices you make, there are potential consequences to a bad hire. If you hire an employee who becomes involved in serious misconduct situations or is caught participating in illegal activities, your organization may be held accountable for negligent hiring or retention of the worker. This could lead to losing thousands, or even millions of dollars if a lawsuit is filed against the company.

Or, consider your employee’s credentials. If a candidate isn’t properly trained, it could reflect poorly on your business and endanger your company. This might sound dramatic, but there are plenty of real-life examples where this has happened, including when the CEO of Yahoo was ousted after falsifying information on his resume, damaging the reputation of one of the most well-known organizations in the world. Click on the link below to learn how we work with small to medium businesses.

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Best Practices for Running Background Checks

When it comes to the do’s and don’ts of an employment verification process, it’s important to start by reviewing your local, state and national regulations. Below, we explore a few employee screening best practices.

Do: Adhere to FRCA compliance standards.

When you run a background check, the Fair Credit Reporting Act (FCRA) requires you to get permission in writing from an individual, inform them about any background checks you run and notify them that the information you find may affect their candidacy or employment.

If it does come down to a situation where you’re considering not hiring a candidate because of the information revealed by their background check, you’re required to send the applicant a notice with a copy of the report you used to make your decision as well as a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.” If the applicant wants to dispute the report, the professional screening firm must reinvestigate at no cost to the applicant.

Don’t: Ask for Information that’s not related to the job.

When conducting reference checks, make sure you use the same set of questions for every candidate. Additionally, review what type of information it is lawful to ask for, use and provide. For instance, you cannot ask about protected information, which may include a candidate’s age, ethnicity, family status and more. If a former employer does disclose this information to you while you’re conducting an employment check, you should disregard this information when making your decision.

Do: Determine ahead of time when you’ll do a reference check and what information you’ll ask for.

Reference checks are a common part of the hiring process to confirm salary, job titles, dates of employment and more. To be as consistent as possible, determine ahead of time what information you’ll ask for, and use the same list of questions for every candidate.

Also, keep in mind that while most of the candidate’s former employers will be willing to share this information, they may be less willing to discuss performance issues or employee misconduct incidences, as it could put them at risk of a lawsuit.

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