Opinions expressed by Entrepreneur contributors are their own.
Key Takeaways
- Many business owners view background checks as an unnecessary expense, but the price is minimal compared to the legal and reputational damage caused by a problematic hire.
- From verifying college degrees to uncovering criminal convictions, rigorous screening is the only way to ensure an applicant is truly who they claim to be.
- To conduct an effective background check program, you must define clear parameters, identify the verifiable information that is needed, and inform applicants/employees about the type of background checks that will be required or performed.
Trust is an inherent part of our human nature; we tend to see and believe the best in others. However, when you discover that an employee intentionally withheld crucial information, such as a criminal conviction, the potential repercussions can far exceed their contributions to the company.
About 12 years ago, I encountered this very situation. When an individual applied for a position at our company, she completed and signed the job application but failed to disclose a prior criminal conviction. She worked closely with our small staff for almost two years. While I strongly believe in conducting thorough background checks before extending job offers, the tools we use for these checks today did not exist at the time of her hiring back then.
Since our company transcribes law enforcement, legal and medical files, we are required to adhere to the stringent standards set by the Health Insurance Portability and Accountability Act (HIPAA) and the mandates of the Criminal Justice Information Services (CJIS) division of the FBI.
The situation escalated when our company was obligated to provide background information to CJIS. Late one afternoon, the employee came into my office and informed me that she could not comply with the request for information.
“Of course you can,” I replied. “Everything required on the form is information you previously provided on your employment application.”
You can probably foresee the dilemma I faced. The employee had failed to disclose her prior criminal conviction on her job application. Though her dishonesty was unethical, the legal consequences for not disclosing such information on an employment application are not as severe as those related to HIPAA or CJIS forms. Failing to disclose prior convictions on those forms could result in felony charges and civil penalties for our company.
The following morning, I dismissed her for cause. The next week, she applied for unemployment benefits, claiming that the previous documents were forged and did not contain her signature. I appeared at a hearing weeks later, only to leave disappointed when a Colorado review board accepted her story and granted her benefits, despite my objections.
The case for background checks
Today, my company conducts thorough fingerprint background checks through the Colorado Bureau of Investigation on every applicant, whether they are applying for a full-time, part-time or contract position. Some business owners and CEOs may view background checks as expensive and unnecessary. However, the cost is minimal compared to the potential liability of hiring a problematic employee.
At a minimum, you want to ensure that the person you are hiring is who they claim to be. Instances of padded resumes are common, as there are numerous cases of applicants submitting resumes with exaggerated educational and work histories.
It’s one thing for an applicant to falsely claim they increased annual sales by 500%, but it’s far more serious when someone asserts they earned a Master’s degree after only completing a few classes. This is not just misleading; it is outright deception. Here are some benefits of conducting background checks:
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Check criminal histories to mitigate the risk of fraud and theft
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Confirm the accuracy of educational and work credentials
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Minimize the potential for workplace violence and abusive behavior
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Ensure compliance with immigration laws
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Check driving records for serious violations
Mitigating your company’s risk should be a top priority. Conducting background checks is an excellent first step in this process.
Legal and compliance considerations
When implementing a background screening process, it is essential to consider compliance and legal issues. It is advisable to have a legal expert review the specific federal and state statutes that regulate background checks.
You must also comply with the Fair Credit Reporting Act (FCRA) and the guidelines set by the Equal Employment Opportunity Commission (EEOC). Under federal law, discrimination based on race, color, religion, sex or national origin is prohibited. For example, a company cannot require background checks on applicants or employees of a specific race or religion. Additionally, there are extra protections for individuals who are over 40 years old and for those with disabilities.
The EEOC guidelines apply to companies that have 15 or more employees. For specific guidelines and requirements related to hiring and employment policies, particularly those involving background checks, it is important to consult a licensed labor attorney.
What information does a background check reveal?
Background checks can vary in depth, ranging from minimal to extensive. Some companies conduct their own checks or hire small companies, while others hire private investigative firms.
Tyler Rogers, the CEO of Privin Consulting Network, is a military veteran who understands the complexities involved in managing corporate background checks. Practically every company uses some type of background check system. The key is understanding the legalities.
Just because an investigation uncovers certain information, sometimes they are prohibited from sharing everything per specific state or federal regulations. According to Rogers, companies have several options when verifying an applicant’s or employee’s professional and personal history. These options include:
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Identity verification/public records search
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Confirmation of education/licensing accomplishments
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Internet search activity
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Credit checks (when necessary)
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Drug screen (when applicable)
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Review of employment dates and responsibilities
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Department of Motor Vehicles (DMV) Reports
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Social networking/social media investigation
For more in-depth evaluations, companies looking to hire top executives may request human investigators to conduct personal surveillance and field investigations.
For example, a few months ago, two married executives from the same company were caught in an intimate moment on a concert video feed. As a result, an internal investigation revealed that both had violated company policy, leading to their dismissals. It didn’t take an undercover investigation to uncover the affair, but placing themselves in a public environment was a significant error in judgment.
In another case, a friend’s son recently applied for a Deputy Sheriff position. After submitting his resume online, he had to complete a series of steps, including a timed physical fitness obstacle course, an in-depth panel interview, a three-hour polygraph exam and a comprehensive background check. If he successfully completed all these stages, he would then undergo a medical exam, drug screening and psychological assessment. Only after passing all these requirements would the department extend a job offer.
Do you agree that our law enforcement officers should be held to the highest standards? I’m not suggesting that every company should invest the same resources in new recruits. However, since my employees transcribe law enforcement audio files, the FBI mandates that I perform extensive background checks on all employees and contractors.
How to implement an effective background check program
The first step in creating an effective background check program is to define clear parameters. Not every position requires an extensive background investigation, so it’s important to outline specific requirements for each role.
Next, identify the verifiable information that is needed. For positions in fields such as medicine, law and engineering, confirming educational qualifications and licensing is crucial due to their extensive requirements.
Selecting the right company for conducting employee background checks is also essential. When evaluating potential companies, ask for a list of their past clients that you can contact. Inquire about aspects such as job performance, accuracy, timeliness and cost.
Effective communication is another critical component of the process. Inform potential applicants and employees about the type of background checks that will be required or performed. Individuals who are concerned about previous issues or who have intentionally provided false or inaccurate information may choose to withdraw from consideration or resign.
The future of background screening
If you believe that future employment background checks will involve artificial intelligence, you are correct. AI-driven employment screenings are already in use. Just like with human screenings, it is essential to establish proper safeguards.
Continuous monitoring of high-risk positions should be a top priority. Employees who have access to sensitive information or significant assets need to be monitored consistently. Even FBI polygraph experts are required to undergo the same or similar examinations that they administer to others.
Finally, there is an increasing focus on the use of employee data. Individuals at certain levels may have access to highly sensitive information. Without effective monitoring, the risk of misuse and abuse is extremely high.
Background screening tools are an important safeguard
Hiring is undoubtedly one of the most important and costly aspects for any company or organization. It also represents a significant liability risk.
Implementing a comprehensive, fair and well-executed background screening program is essential for protecting your employees, customers and the reputation of your company. Keep in mind that the cost of conducting background checks is minimal compared to the long-term damage that can result from hiring an unethical employee or facing an expensive legal judgment.
Key Takeaways
- Many business owners view background checks as an unnecessary expense, but the price is minimal compared to the legal and reputational damage caused by a problematic hire.
- From verifying college degrees to uncovering criminal convictions, rigorous screening is the only way to ensure an applicant is truly who they claim to be.
- To conduct an effective background check program, you must define clear parameters, identify the verifiable information that is needed, and inform applicants/employees about the type of background checks that will be required or performed.
Trust is an inherent part of our human nature; we tend to see and believe the best in others. However, when you discover that an employee intentionally withheld crucial information, such as a criminal conviction, the potential repercussions can far exceed their contributions to the company.
About 12 years ago, I encountered this very situation. When an individual applied for a position at our company, she completed and signed the job application but failed to disclose a prior criminal conviction. She worked closely with our small staff for almost two years. While I strongly believe in conducting thorough background checks before extending job offers, the tools we use for these checks today did not exist at the time of her hiring back then.
