According to a survey by Career Builder, every bad hire costs a company almost $15,000. Additionally, 74% of the survey’s respondents admitted that they have recruited the wrong person. The stakes are high when recruiting new employees. Including pre-employment screening as part of your hiring process provides an extra layer of protection against recruiting the wrong candidate.
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A 2017 survey by the National Association of Professional Background Screeners (NAPBS), found that 96% of businesses used pre-employment background checks. Most said that the biggest reason for using background checks is safety, which entails protecting customers, employees and their general business. Although a high percentage of the businesses surveyed used pre-employment screening, it is important to note that not all screening services are created equal.
This guide will provide you with details about what you should look for when undertaking pre-employment screening.
Depending on the position that you are hiring for, pre-employment background checks can cover a broad range of records. For example, many financial institutions perform credit checks on potential employees to verify that they are trustworthy and reliable. A credit check may not be appropriate if you are hiring gig workers. As an employer, you can design background checks to cater to your specific needs.
It could be tempting to believe that that pre-employment background checks are a luxury that only large businesses can afford. However, small businesses are generally at more risk than large corporations. The potential issues that can be caused by hiring unqualified or dangerous employees could be more difficult for small businesses to deal with. This is because they may not be in a situation to easily absorb the financial losses caused by the bad hire.
If you decide to start implementing a pre-employment screening process, you will find that there are a wide range of options to choose from, some more expensive than others. The process of pre-employment screening usually cost around $100. It may be tempting to go with a cheaper service to help save money, but these services may not be as accurate as the more expensive accredited services.
The most practical benefit of pre-employment screening is that it will save your business from the financial burden of training an employee that is not going to work out. However, a negative financial impact is only one effect of making poor hiring choices. In more extreme cases, your business can be subject to lawsuits, reputational damage or endangerment of employees and customers.
There are several services to choose from when you design your pre-employment screening requirements. Some may be more relevant to your business than others, so take the time to create a strategic plan for your screening process. Here are some common options:
This category of pre-employment background checks is useful to most businesses. This will verify that the candidate is who they say they are and will offer insight into what kind of worker they are.
The following are included in basic pre-employment screening:
If you are hiring for a position that requires a certain level of expertise, it is a good idea to confirm what the candidate says they are qualified to do. By including qualification checks in your pre-employment background checks, you ensure that the candidate has the necessary expertise for the job.
Here are some pre-employment screening checks in terms of qualification:
Local, state and federal records searches
These searches help filter out candidates that may be dangerous to your company. They should only be used in pre-employment screenings when a bad record would put someone in danger. For instance, someone with a bad driving record should probably not be operating heavy machinery or be hired as a delivery driver.
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Pre-employment background check sample
Checkr provides background checks for companies of different sizes. Its background checks are mobile friendly and easy to understand. In our pursuit to provide your business with the most seamless hiring process, Fountain integrates with Checkr to include pre-employment screening into your recruitment workflow.
Checkr’s pre-employment background check sample includes the following details:
To save time and money, some businesses try to handle pre-employment background checks themselves. They may use information sources like, unaccredited background checking services and social media. This is not an effective strategy and can cause legal issues in the future.
Some pre-employment screening services do not have the clearance to access records that an accredited screening service has. For instance, only consumer reporting agencies (CRAs) are able to trace Social Security numbers. If the pre-employment screening service is not a CRA, they will not have access to the information that you are looking for. As a result, these services often rely on incomplete surface-level scans of public records and may have outdated information.
It is also not a good pre-employment screening practice to rely on social media accounts to get to know the character of a potential candidate. The candidate is in control of what is posted on their page and is unlikely to share information that would be harmful to their chances of gaining employment.
Additionally, this direction can lead to legal trouble. If you choose not to hire the candidate based on something you saw on their social media, they may not understand why they were passed up for the position and misidentify it as a discriminatory action. The candidate may claim that you refused to hire them based on a protected characteristic, such as race or gender. Should a lawsuit follow, it would be difficult to prove that this is not the case because you may have to go back and find the post or photo in question. Social media accounts can be edited or deleted, which would leave you with no evidence for the reason for your decision.
Federal Trade Commission (FTC) and the Equal Employment Opportunity Commission (EEOC)
If you are implementing a pre-employment screening process, you should be familiar with the Federal Trade Commission (FTC) and the Equal Employment Opportunity Commission (EEOC). These groups enforce the Fair Credit Reporting Act (FCRA). The FCRA protects candidates from discriminatory actions or unlawful treatment of information. If your business is not in compliance with the FCRA it could lead to expensive lawsuits. Different states have different requirements, so you will need to familiarize yourself with your state’s laws and regulations.
The FTC requires that potential employees be made aware that pre-employment background checks will be performed and that the information will be used to make a decision about whether they will be hired. A notice must be provided in writing and signed by the candidate before the pre-employment screening can begin. The candidate should be aware of every search that will be performed.
The aim of the EEOC is to provide an equal opportunity to each candidate, no matter their age, disability, religion or other protected characteristic. A candidate cannot be rejected for any of these reasons unless it directly inhibits them from performing the job.
It is also illegal to only perform pre-employment screening on an individual based on a protected characteristic. For example, you cannot perform degree verifications only on women and not on men. It is a good idea to subject all candidates to the same pre-employment screening process in order to protect the company from discriminatory claims.
It is important to be cautious with the source of your pre-employment background checking information to remain compliant with the FCRA. By using an accredited screening firm, you ensure that the information you get is accurate and obtained legally.
The NAPBS survey we covered earlier, accuracy in reporting was the top priority of all human resource professionals interviewed (98%). However, the majority of respondents stated that the amount of time to receive results was the biggest drawback (68%). Ensure that you have allocated enough time between ordering the background check and your employee’s start date.
While time scales during the hiring process are normally tight, you should still prioritize waiting for the results of a background check before making a decision. A background check normally takes around two to five days, but can be longer depending on the level of information that has been requested.
The potential pitfalls that can be avoided when using background checks from accredited services makes the time spent, worth it for your business.
You need to demonstrate that you have not discriminated during the hiring process. Using accredited background check services is a way to evidence that you have a legitimate reason for turning down a candidate.
Accredited pre-employment screening firms offer a level of protection to you and to the candidate, that could be vital to your business in case of a dispute about your hiring practices. Suitable pre-employment screening services should be dedicated to fulfilling the requirements of the FCRA.
Fountain integrates with various hiring tools, including the background checking service – Checkr to optimize your hiring process.
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