Why Background Checks are a Sound Investment

There’s a considerable cost for making a bad hire, and according to the estimates of some studies, on average, bad hires cost approximately $17,000. Therefore, when most businesses conduct background checks, it’s a sound investment. Not only can background checks verify criminal records, but they’re also useful for confirming credit, educational records, and employment. Eighty-two percent of organizations are reporting that they perform some kind of background check before making final offers to candidates, utilizing them as part of their hiring decisions and a means of protecting their customers, data, and workforce.

One of the cities promoting the initiative referred to as, “Ban the Box,” is Jacksonville, which is asking employers to delay questions regarding criminal background checks until an evaluation for the candidate’s qualifications for the job has been completed. Ban the box policies have been adopted by twenty-nine states, as well as over 150 cities and counties, indicates the National Employment Law Project.

More businesses are likely to open their recruiting to individuals with criminal offenses as the labor market tightens. There’s already a federal requirement stating that companies must base their decision for not hiring due to criminal background on “business necessity,” which means the employer must take into consideration the severity and nature of the crime, how the offense relates to their actual job duties, and how much time has passed.

A growing number of organizations are also performing background checks on contractors, freelancers, and gig workers, which is another relatively new trend. According to an estimate by Intuit, the parent company of Turbo Tax and QuickBooks, by 2020, forty percent of the country’s workforce will be gig workers and contractors. Businesses are held liable for the inappropriate behavior, including criminal acts and sexual harassment, or freelancers, just as they would be for employees in their organization.

Because more and more businesses are recognizing that affiliating with a contractor could affect their brand, they’re becoming more cautious regarding the decisions they’re making when hiring independent workers. Credential and background checks are supplementing previous customer references and, under some circumstances, social network check are also occurring, although that’s considered an ethical gray area.

Businesses are also monitoring the backgrounds of their current employees, typically in increments of five years, in addition to using background checks during their pre-screening. Under these circumstances, “evergreen” or new consent is required from employees allowing employers access to this background information. If a new criminal offense is uncovered, the issue experiences further complications if the business doesn’t have a definite and firm policy in place regarding what happens. Another problem is with regards to what consequences an employee could face if they refuse consent, particularly if they are working in a category with protection.

Employees are under no obligation to report to their employer if they’ve been arrested or convicted of a crime, although doing so may help them keep their job if their manager finds out from them instead of from other sources. Even if employees are convicted, they can’t be fired from their position unless it has a direct impact on their job duties. For example, if the employee is working as a filing clerk, their conviction for DUI wouldn’t be relevant unless they need to use the company car.

Human resource experts report upward of forty percent of resumes contain exaggerated or false information. What this means is that organizations aren’t simply going to take the risk by making a negligent hire which could result in a lawsuit because your resume was taken at face value. They’re going to make these checks.