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Why Run Background Checks?


Making the right hiring decision for your company is critical to your business success. But getting it right isn’t easy. We all know the negative consequences of making the wrong hire – it can lower your team’s morale, hinder productivity and even impact customer relations. But did you know that the cost of replacing an experienced worker who doesn’t work out can cost 50% or more of that individual’s salary? If that employee has specialized skills the cost can be even higher (Source: AARP). There are many things you can do to ensure you make informed decisions and hire quality employees. One of the most important is to use background checks.

Reasons to Conduct a Background Check

A pre-employment background check can not only save you money in the long run, it can also protect your business. How? If your employees come into direct contact with your customers and cause harm to a customer, your business can be liable if that employee has a criminal record. A background check can also provide insight into an individual’s behavior, character and integrity.

What Types of Background Checks Can and Should You Conduct

There are several background checks that you should consider as you build a profile of a future employee. Not all of them, however, are appropriate or even possible for every company. For example, how you may employ the information gleaned during a criminal background check when making hiring decisions varies from state to state. Furthermore, any check on an individual’s credit score or military service requires consent. To read more about the types of checks you can and cannot conduct refer to the SBA’s Guide to Employee Background Checks

As a general rule of thumb, it’s worth considering the following areas of background screening: credit checks, drug tests, past employment verification, criminal background checks (check with a lawyer first to see what your state permits), civil court records, driving records, professional licensing, sex offender registry and social security number traces.

Credit Checks

About 60% of employers run credit checks on potential hires because it can be a good indicator of an employees fiscal aptitude as well as his/her integrity. If a job description stipulates that an employee will have access to sensitive financial data or customer information, credit checks provide an extra level of security.

What the Law Allows

According to the Fair Credit Reporting Act, federal law allows using credit information for employment purposes, but there are some caveats:

  • You must get the job seeker’s written consent
  • If you decide not to hire this person based on the information derived, you are required to let the candidate know the source used for the check
  • The candidate has the right to challenge any information that they deem to be incorrect or inaccurate

(source for the above referenced information is




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