According to one source, 96% of employers conduct at least one type of background screening. If you’re like many business owners, you likely want to do your due diligence before making any hiring decisions. Otherwise, you could be left with some rotten apples and wasted time.
If you haven’t already, jump on the background check bandwagon to protect your small business from bad hires.
What is a background check?
A background check is the process of looking up an applicant’s employment history and criminal, commercial, driving, and financial records before hiring them. Background screenings can help you make better-informed hiring decisions as well as protect your business’s reputation and employees.
You might decide to do the background check yourself. Or, you can outsource the screening process by using a professional background screening company or background check software.
When conducting a background screening, have a consistent policy and procedure. That way, the process is fair to each applicant.
How to do a background check
Ready to weed out bad hires at your small business? Put the six steps below into action to make your background check process as thorough as possible.
1. Inform the individual
Before you can complete a background check, notify candidates that you are doing so. The Fair Credit Reporting Act (FCRA) requires that you tell applicants that you intend to do a background check on them. And, you must get permission from the applicant to move forward with the background check.
Be sure to write down your background check intentions and provide a copy to each applicant in person or via email before you begin the process.
Have each applicant sign a background check notification document. Keep a copy of each applicant’s written permission in your records.
2. Brush up on state laws
Each state has its own rules which may require or prohibit certain background checks. Some states limit whether or not you can check criminal, credit, driving, employment, military, or educational records.
For example, some states follow a ban-the-box law that prohibits employers from asking about an applicant’s criminal history on a job application. Some of these states include Ohio, Arizona, and Georgia.
States might also have specific state laws about background checks, like reviewing an applicant’s credit history. In Colorado, employers can only consider an applicant’s credit information if the employer is a bank or financial institution, the report is required by law, or the information is linked to the job.
Before conducting background checks on individuals, check your state for background check requirements and laws.
3. Check candidate’s references
According to one source, 85% of employers caught applicants fibbing on their resumes or applications. So if you want to avoid getting bamboozled by candidates, you need to check references.
Checking references takes time, dedication, and lots of patience. However, reference checks are essential to the background check process.
Reference checks can give you another perspective on the applicant. When checking references, consider creating a reference check form so you are prepared and have a list of questions to ask.
Some examples of questions you can ask an applicant’s references include:
- What are ______ ‘s strengths? What about their weaknesses?
- Tell me about this applicant’s biggest accomplishment.
- On a scale of 1-10, how strong are _____ ‘s communication skills?
- Would you recommend this candidate?
If you’re contacting a candidate’s former employer, be sure to verify dates of employment. Depending on the former employer, they might have a policy in place that only allows them to share employment dates.
Of course, be sure to also thank each reference you call or contact.
4. Consider hiring a background check company
If you don’t want to do all of the legwork when it comes to conducting a background check, you’re in luck: you can outsource the process.
An accredited background screener (e.g., Intellicorp) can complete a thorough background screening on your behalf. Generally, the results are much faster and more accurate. Not to mention, you can rest assured knowing that professionals are handling all federal, state, and local background regulations.
If you prefer to do your own detective work, there are applications and websites you can use to check things like credit, criminal, and employment records online. You can also look at things like an applicant’s social media accounts to cross-check resume information.
Regardless of if you use a screening firm or do the work yourself, be sure to do your research. Spend time looking at different firms or websites to ensure they’re secure, safe to use, and reliable.
5. Conduct drug tests
Many employers, 56% to be exact, require workers to take pre-employment drug tests. If you’re like the majority of employers, you’d probably rather be safe than sorry.
In most cases, this step comes after an applicant has accepted a job offer. The offer of employment is typically contingent upon the applicant successfully passing the drug test.
The majority of employers across the U.S. are not required to drug test by law. However, there are a few industries where drug testing is required. These industries include:
- All civil service jobs (e.g., school staff, law enforcement, maintenance crews)
- Department of Transportation workers (e.g., vehicle operators)
The federal guidelines on drug testing are outlined in the Drug-Free Workplace Act. Review this document before proceeding with drug testing at your business. And, check with your state about state-specific drug testing regulations.
6. Review reports
After you finish conducting your background screening, look at the applicant’s results and make a decision.
Under FCRA regulations, you must inform an applicant if your report contains information that dissuades you from hiring them (e.g., criminal history). The applicant can challenge or explain the information.
If you have a candidate with background screening results that prevents you from hiring them, complete the following steps:
- Inform the candidate about negative results
- Let applicants know their rights under the FCRA
- Give the applicant an opportunity to rebut the information in the report
If a candidate passes your screening with flying colors, extend a job offer and continue with the onboarding process for new hires.
Benefits of background checks
Among other things, background checks can:
- Avoid hiring duds
- Protect you and your business against risky employees
- Reduce employee turnover
- Improve quality of new hires
- Increase safety and security
- Save you time in the long-run
Like other things in business, small business background checks have a few disadvantages, too. Background checks can be time-consuming and expensive. But in most cases with background checks, the pros outweigh the cons.
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This article has been updated from its original publication date of June 27, 2013.
This is not intended as legal advice; for more information, please click here.