Whether you’re the captain in a Fortune 500 corporation, a medium, or a small organization, it’s important to incorporate background checks in the hiring process for improved human capital and mitigating the organization’s risk while making crucial employment decisions. Talent acquisition and management require significant time and financial investment, so it’s wise to do due diligence before onboarding a new hire.
The first thing is establishing whether job applicants are whom they claim to be, including what’s stated in their resumes; work experience, education, criminal history, and certifications. In California, verification of the above-mentioned data is done through conducting an employment background check California. Background checks reveal red flags that could potentially affect an employer-employee relationship besides protecting the company’s bottom line.
What Employers Can or Can’t Backcheck during Hiring
The following list contains the things that employers can and can’t backcheck during hiring:
Employers can back check:
- Personal and contact details;
- Working history;
- Alcohol and drug test results;
Employers can’t check:
- Criminal history;
- School and military records
- Medical records.
Red Flags in Background Checks
Employers conduct background checks to learn more about prospective employees by evaluating their working history, education, credit history, among other things. The following are some common red flags that could disqualify a job applicant after a background check:
- Unexplained employment gaps;
- Misrepresenting and falsifying your resume;
- Criminal history;
- Negative references from past employers;
- Poor credit history;
- Failing a drug or alcohol test;
- Questionable social media activities;
- Lack of a legal employment authorization status.
Importance of Background Checks during Hiring
If a human resources department in a company fails to confirm the authenticity of the details provided by job applicants, it could later come to haunt them. It’s undoubtedly a misinformed hiring decision that can be costly in the long run.
A quarter of human resources managers in a past survey indicated that misinformed hiring decisions cost their companies at least $50,000 annually. The following are the risks of not conducting pre-employment background checks:
1. Increased Expenses
Bad hiring results in lost time and money because the company is forced to recruit and train a new hire; another expensive process. Rehiring impacts employee morale negatively leading to a decrease in the overall productivity of a team or company.
2. False credentials
Trust is a key quality employee should possess because they’ll be trusted to work under no supervision, treat clients and other stakeholders respectfully, and represent the brand appropriately.
A recent study showed that 58% of job applicants provide misleading, incorrect, or entirely false information, such as education & career achievements, work experience, and employment dates.
While some misrepresentations or inaccuracies, such as date discrepancies may not impact an applicant’s performance or a company’s image, others can have far-reaching consequences. False credentials mean that an applicant isn’t qualified and they’re not an ideal fit for the job they’re being hired which can affect team performance since most teams depend on each individual to achieve set goals.
3. Intercept Potential Criminals
Pilferage (stealing cash and inventory) is a big worry and a valid concern for most business owners. The Association of Certified Fraud Examiners found that annual occupational fraud averages $3.7 trillion, equivalent to 5% of sales per year.
Unfortunately, pilferage isn’t the only concern. Other forms of workplace thefts, such as cybercrime and fraud affect companies across a host of industries. Disgruntled ex-employees can hack employers unimaginably. Insider misconduct involving sensitive and classified data has cost many companies a fortune. Screening new hires for history gaps and reasons for past job resignations can help detect risky job applicants.
4. Negligent Hiring
“Negligent hiring” refers to an employer’s liability for the misconduct of an employee. An employer is considered liable for an employee’s misconduct if they were aware that such employees posed a risk of such misconduct from the beginning.
Supposing a company hires a driver with a long history of DWI and the driver causes are charged for drunken driving while at work, the company will be jointly liable because they should have conducted a background check, or they shouldn’t have ignored the driver’s DWI history.
5. Workplace Violence
Employers are legally obligated to provide safe working environments for their employees–besides, they also need a peaceful working environment. As per a workplace safety study, 36% of business owners reported that they’ve had to deal with workplace-related violence perpetrated by new employees.
Job applicants with a history of violence are a potential threat to a peaceful working environment. In other words, past convictions related to violent crimes and drugs are an obvious red flag. Employers or human resources departments should consider incorporating background checks in their hiring process to avoid toxic employees who will later threaten the working environment and jeopardize the safety of colleagues.
You have enough to do in your day without having to worry about your business or people being in jeopardy due to untrustworthy new hires.