5 Reasons Why Companies Should Perform Background Checks

Every company wants to work with the best people—but finding the best people isn’t always easy.

The candidate who is perfect on paper, charming and charismatic in the interview, and comes with glowing references isn’t always the catch they seem to be. Have they lied about their education? Exaggerated their work experience? Are they hiding a criminal history or a drug habit?

The consequences of a bad hire can range from lowered company morale and wasted time to bad publicity, litigation, and even outright violence. Pre-employment background checks, including a drug screening and comprehensive check of criminal records, can save your company untold amounts of money, stress, and time.

Despite this, many companies, especially smaller ones, don’t bother to run background checks, assuming they’re too expensive or time-consuming. Fortunately, background checks are increasingly affordable and fast, meaning that you can easily take steps to protect your company and the people who work for it.

Here are five reasons why background checks can benefit your company:

1. To protect your employees, customers, and clients

Keeping your employees and anyone else who has contact with your company safe is always a priority and is probably the most compelling reason why you should conduct background checks. An unsafe work environment reduces productivity, raises the risk of liability, and in the worst case, can result in tragedy.

Checking job applicants against sex offender registries and criminal records databases should be a no-brainer, but deliberate violence isn’t the only danger. Pre-employment and regular drug screening has proven to be highly effective in reducing workplace accidents and on-the-job injuries as well.

As an employer, you have an ethical and legal obligation to keep your employees and customers safe. Making employment background screening a standard part of your hiring process is one of the easiest ways to do it.

2. To keep your workplace productive

In a 2020 survey, 36% of respondents said they lied on their resumes—and that was only the ones who admitted it! Candidates can and have lied about everything, including their education, job histories, skills, licensing, and even their names.

Exaggeration or “bending the truth” is also a problem. Just because a candidate attended a particular college doesn’t mean that they graduated or studied the subject they claim to have majored in. And it’s not unheard of for applicants to pad out their resumes with duties they didn’t actually perform.

The unfortunate fact is that resumes alone can’t be trusted any more than an interviewer’s “gut instinct” can be considered objective. By not verifying a candidate’s claims, you risk hiring people without the skills and competency to do their jobs well. This leads to higher turnover, which in turn costs your company more money and lowers overall morale.

A background check that verifies your candidate’s claims about education, past employment, and licensing means your new hire is more likely to be able to do the job—and do it well.

3. To protect your company against theft & fraud

Company theft isn’t limited to a few pilfered staplers and pens. In the United States, employee theft costs companies an estimated $50 billion a year. This can range from inventory theft to embezzlement to data security breaches, which can put company and client information at risk.

Furthermore, theft isn’t limited by age, gender, or employee rank. Don’t assume that someone applying for a management or executive position is less of a risk than a lower-paid employee—in fact, the higher up in the company they are, the more potential damage they can do thanks to increased access and trust.

Lack of a criminal history doesn’t guarantee that your employees will never do anything wrong, but a history of theft or other criminal behavior is a red flag you want to be aware of. 

4. To reduce your liability exposure

In 2016, the family of a man who was shot to death by a co-worker sued the company he worked for. The company had failed to run a comprehensive background check that would have turned up the co-worker’s history of violence. The jury awarded the victim’s family one million dollars.

Failing to provide safe working conditions for your employees may be grounds for a lawsuit if one or more of your employees is harmed by a coworker. Similarly, if someone outside your company is harmed by one of your employees—say, an intoxicated delivery driver who hits a pedestrian—you could face charges of negligent hiring.

Whether accidental or deliberate, harm caused by one of your employees is potential grounds for a lawsuit. Companies that run background checks can save thousands of dollars in lost time and litigation, as well as prevent senseless tragedies.

5. To ensure compliance

Finally, one of the most important reasons why you should conduct a background check is simple: because you have to. Depending on your industry, you may be subject to local, state, and federal regulations that require you to conduct specific background checks or drug screenings. You may also work with clients and suppliers who insist on specific standards of security and qualifications for your employees.

Failure to comply with these regulations can result in heavy fines and loss of business. Professional background screening helps to ensure that you’ve made the right hiring decisions and gives you proof that you’ve done your due diligence to ensure that your employees meet the legal and professional standards required.

Final thoughts

The exact reasons why an employer should conduct background checks may vary depending on the company, the industry, and the geographical region, but virtually any business can benefit on some level from the increased peace of mind and security that a background screening can provide.

Better background checks mean better employees, a better work environment, and a better bottom line. They also mean less stress, less turnover, and less waste. Even better, as your company’s reputation for providing an excellent work environment grows, you’ll attract increasingly good candidates over time, creating an ever-improving experience for your entire company.

Making background checks a standard part of your hiring process isn’t just good for your bottom line—it’s also the right thing to do. Get started today.

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