Megaphone

It’s easy to switch. We’ll even set you up for free

Updated: April 24, 2024

Background check basics and screening tips for employers to make better hiring decisions

Published By:

Jon Davis

More from our experts

Conducting a background check before bringing on new employees has become an important part of the hiring process for companies of all sizes. In fact, more than 72% of employers conduct some type of background check before making a hiring decision, according to data from CareerBuilder. Why do some employers make this a priority during the hiring process? In some cases, a background screening may find that a job candidate is being less than truthful about their work experience. There can even be more serious circumstances where a check flags a person who might pose harm to an organization.

 

That said, what exactly is a background check and how does it work? In this article, we will explore the basics of background checks, what they can uncover, and what employers need to know.

What does a background check do?

First things first, a background check (also known as a background screening) is the process of collecting and verifying an individual’s information or records from different private and public sources of data. One of the main reasons why employers screen potential employees using a  background check is to ensure that the candidate is who they say they are. Without these types of checks, employers are relying solely on the information the applicant provides. This can be especially important (and necessary) as 78% of job seekers misrepresent their credentials during the interview process, according to a survey conducted by Checkster, a reference-checking solutions provider.

 

Screening candidates can also be useful because they can spot red flags that might not come to light during the interview process. Sarah Watson is a psychologist and the chief operations officer at BPTLAB, a personality test solutions provider. In her role, she also oversees the company’s human resources division and agrees that background checks can provide a great deal of valuable insight. “The primary purpose of a background check is to protect the organization from potential risks associated with hiring someone who might not have the skills, experience, or ethical standards required for a particular role,” she explains. “It helps employers make informed decisions, minimize the chance of negligent hiring, and ensure overall workplace safety.”

 

Now that we are familiar with the purpose of a background check, let’s find out more about how one is conducted.

Best practices for background checks and employee screenings

Once an employer has decided to proceed with background checks for new employees, they typically work with a third-party provider such as Hireright or Accurate. These companies gather information about job candidates from multiple sources, including criminal records, credit reports, and employment history. But before moving forward, here are some things that employers generally do to ensure that they’re remaining compliant with federal and state laws.

 

Get permission in writing

On the federal level, the Federal Trade Commission requires employers to obtain written consent from candidates before conducting a background screening. It’s also important to understand that candidates have the right to say no to these screenings. However, it’s also clearly within your right as the potential employer to then decide not to hire a candidate if they do not allow for a background check.

 

Share how you might use the information

Remember, it’s the employer’s responsibility to notify the applicant that they might use information from a background check to make employment-related decisions. The notice must be in writing and separate from the employment application. In other words, it needs to be its own document.

 

Additionally, if a less-than-desirable action is taken based on the information the screening provides (for example, the candidate is not hired), the employer must give the candidate a copy of the report.

 

Consistency in the background check process

It’s important for companies to keep in mind that running background checks on certain groups of people and not others may be considered discriminatory and illegal.

 

Per the EEOC, “It’s illegal to check the background of applicants and employees when that decision is based on a person’s race, national origin, color, sex, religion, disability, genetic information (including family medical history), or age (40 or older). For example, asking only people of a certain race about their financial histories or criminal records is evidence of discrimination.”

 

Start the screening

After these compliance considerations, the screening company gets to work, and the process is straightforward. After gathering basic information about the candidate, such as their name, address, and social security number, the service provider then uses these details to verify the candidate’s identity and ensure that the background check is conducted on the correct person.

 

The screening company searches various databases to gather information about the candidate’s criminal history, if any. This may include searching local, state, and federal criminal records, as well as sex offender registries and even terrorist watchlists.

Many employers are incorporating “pre-start date” programs into their onboarding efforts to make new employees feel welcome before their first day on the job. If you have ever considered adding this type of outreach to your hiring efforts, read our guide on how to preboard employees after reading up on background checks.

What information does a background check look for?

As we mentioned above, a background check is generally used to verify a person’s identity but can also help employers get a closer look at a job candidate’s past behavior and actions. Here are some common things companies look for.

 

Criminal activity

One of the components of almost all background screenings is reviewing whether the job candidate has a record of previous criminal activity. Most employers will typically look (and want to know) about any past convictions or pending charges. For example, if a candidate has a history of violent behavior or drug use, this information may be relevant to the hiring decision (and something the human resources team wants to consider).

 

This is especially important for positions that involve working with vulnerable populations, such as children, the elderly, or individuals with disabilities. Employers may also look for any history of violent or sexual offenses, drug-related crimes, or theft.

 

Employment history

Another important factor that employers will look at during a background check is employment history. This includes verifying dates of employment, previous job titles, and responsibilities or just confirming the job candidate is being truthful about their previous positions (and projects they worked on).

 

Employers may also contact previous supervisors or colleagues to better understand the recruit’s work style, ethics, and temperament. Furthermore, some recruiters and talent acquisition specialists may even contact personal references to get a sense of the person’s ability to build rapport with coworkers.

 

Some of the most common personal references include former teachers, coaches, or volunteer supervisors, as well as personal acquaintances. In most cases, job candidates have a list of references who can speak to their skills and character.

 

Education

Verifying a potential new hire’s education is another key component, especially for positions that require specific degrees, certifications, or professional licenses. Many employers want to verify the schools and universities that the prospective employee attended, including dates, degrees earned, and grade point average (GPA).

 

Credit history

In some cases, credit history is reviewed for positions that involve financial responsibilities, such as handling cash or managing budgets. Employers may look for any past bankruptcies, foreclosures, or delinquent accounts. There can even be situations where a company checks a candidate’s credit score. However, it’s important to note that employers must obtain written consent from the candidate before accessing their credit report.

 

Driving records

In addition to these standard checks, employers may also investigate an individual’s driving record, especially for any positions that involve driving company vehicles or transporting clients. They may also review the candidate’s social media activity to ensure that they have a professional online presence and don’t engage in any behavior that could reflect poorly on the company.

 

Once all of the necessary information has been gathered, the background check service compiles a report and provides it to the employer (usually the human resources department). Teams use this information to decide whether or not to hire the candidate or keep searching for prospects.

 

Now that we know more about the types of information a background check looks at, let’s dive into other ways they provide value during the hiring process.

Benefits of pre-employment background checks that employers should know

Conducting a pre-employment background check offers several benefits for employers. Once more, we spoke with Watson for her take, and she says that “employers benefit significantly from background checks in various ways.”

 

“One of the main benefits is that background checks reduce the risk of hiring unqualified or dishonest candidates,” adds Watson.

 

Here are some of the additional ways that she says background checks can provide value for employers.

 

Takeaway: Making sure the potential employee is being honest about their qualifications and experience can prevent your team from discovering the newest member of the team is unable to perform the job duties.

 

“It goes a long way toward promoting workplace safety, protecting company assets, and avoiding potential legal costs related to negligent hiring.”

 

Takeaway: Background checks also demonstrate a commitment to security and employee well-being across your entire organization. Coworkers can have peace of mind knowing that you are taking the necessary precautions to make sure someone who could pose a threat never makes it past the interview stage.  Hiring the wrong candidate can also have a negative impact on employee morale, client relations, brand reputation, and possibly even sales.

 

“Thorough background checks also contribute to better employee retention as employers gain a deeper understanding of an applicant’s history and work performance, ensuring a better job fit.”

 

Takeaway: The screening process can have you gain a deeper understanding of an employee’s background and possibly uncover new hires that can contribute to your company’s success over the long-term.

Background checks provide clarity

Background checks are an important part of the hiring process that can be beneficial for both employers and employees. . For employers, the screening process helps to verify a candidate’s identity, evaluate their past behavior and actions, and ensure that they meet the necessary qualifications for the job. On the other hand, employees can rest easy knowing their company is actively trying to avoid bringing on new hires who may pose a risk, both to company culture or to the well-being of your employees.

 

Overall, background checks are an important tool for employers to make informed hiring decisions and onboard people who can make a positive impact on an organizations’ goals. Best of luck making the most of background checks as your team continues to grow.

Take a tour to see how easy payroll can be.

Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.