What SMBs Need to Know about Pre-Employment Background Checks

Experts tell us that 80 percent of HR professionals use pre-employment background screening. The background screening market is estimated to be worth two to three billion dollars. Yet many small-and medium-sized businesses are still relying on old-fashioned screening techniques – i.e. asking for and following up with references – rather than conducting professional employment background checks. Unfortunately, this approach is outdated and potentially hazardous for an SMB.

Why Many Small Businesses Don’t Do Pre-Employment Background Screening

“Won’t that cost me an arm and a leg?” Many SMB leaders see cost as a major inhibitor of professional pre-employment background screening. In truth, however, the idea that expert employment background checks are too pricey for smaller businesses is a misperception. If you’re willing to outsource your pre-employment background screening, it can actually be quite affordable – usually no more than $50 per applicant.

“We don’t have the internal expertise to do background checks.” Lack of knowledge surrounding background screening is another reason SMBs often fail to run employment background checks. Certainly, there is plenty to learn about screening. It could very well take an in-house employee months to research how to best run background checks. Yet again, the outsourcing option neatly solves this problem. If you’d rather not pay one of your workers to figure out how to screen applicants, you can simply hire a professional pre-employment background screening firm to do it quickly and professionally for you. Many of the experts at such screening companies have spent their entire careers learning the best ways to research candidates’ backgrounds.

“What’s the big deal? We’ve never had a problem with hiring before.” Finally, lack of concern is a major factor. Some SMB leaders see background checks as something that only certain fields must carry out. And indeed, until the last decade or so, health care, law enforcement and education professionals were by and large the only workers subjected to employment background checks. Today, however, private companies have plenty of reasons to consistently carry out pre-employment background screening, as explained below.

Why SMBs should Conduct Employment Background Checks

To avoid hiring dangerous individuals. Labor experts tell us 10 percent of job applicants have some kind of criminal history. If you don’t perform pre-employment background screening, you could hire a violent person. Here’s a scary example of what might result: Last January, a new hire at the Flying Biscuit Café in Charlotte, N.C., stabbed his manager to death, robbed the store and fled. The café owner admitted that no background screening was carried out for this violent individual.

To root out lies in candidates’ applications. Labor authorities estimate that at least 40 percent of resumes include dishonest omissions, if not downright lies. Employment background checks help bring such fabrications into the spotlight.

To avoid legal snafus. Getting back to the Flying Biscuit Café, the owner could be facing hefty negligent hiring fines from the Alcohol Law Enforcement division. The law says employees must have three felony-free years in order to serve alcohol. The new worker had just been released from prison last November, having served two years for robbery and breaking and entering. In legal terms, the owner’s failure to thoroughly examine applicants’ histories would be considered a case of negligent hiring. Failing to perform background checks could result in large, unnecessary legal fees.

To cut costs. Overall, pre-employment background screening helps companies find better job candidates. In turn, this leads to less time spent looking for replacements, fewer employee-generated losses such as theft and embezzlement, less negative PR, fewer lost customers, and less money wasted in litigation regarding negligent hiring.

To speed the hiring process. Most background screening companies stick to a 48-hour turn-around time. If you outsource your employee background checks, you will receive a complete background report in a day or two, allowing for speedy hiring.

As you can see, there are many reasons why an SMB owner should arrange exhaustive employment background checks. Instead of trying to do employee screening internally, the wise SMB owner outsources this specialized work to a third-party pre-employment background screening company.