Why Background Checks are a Wise Investment for Businesses and HR Teams

In today’s competitive job market, it’s essential for recruiters to ensure they’re hiring the best candidates for their open positions. This requires a comprehensive background check programme that can verify the accuracy of a candidate’s resume, check their criminal history, and uncover any red flags.

Anyone involved in business or HR will know that the people you hire end up influencing the culture of your company. Employing the right people gives a business its competitive edge and helps create a positive work environment for both employees and clients.

In today’s competitive job market, however, it’s easy for hiring managers to be tempted to speed through the hiring process. The desire to secure a candidate before they accept an offer elsewhere might mean skipping through important assessments such as background checks. But doing so can have negative consequences on company culture, workplace safety, and the reputation of your company.

It’s important for recruiters to avoid being tempted to forego careful consideration of candidates before bringing them on board. Even if you must take a calculated risk to hire someone quicker, one thing that you should never ignore is the importance of a background check.

In this article, we’ll explore why background checks are a wise investment for businesses, including how they can benefit your company and the risks they can help you avoid.

What is a comprehensive background screening programme?

Conducting background checks on employees plays a vital role in protecting our businesses and employees. However, an important aspect to note early on is the difference between

background screening programmes. Not all background checks are equal and not all providers offer the same level of screening.

If you are conducting background checks in-house, you are unlikely to match the level of compliance and detail offered by a professional background screening company. This is simply because they have far more experience, resources, and knowledge that allows them to offer a more robust programme that is delivered seamlessly and thoughtfully.

That said, not all background check companies offer the same level of screening. It’s important to research companies to find a reputable provider that delivers more than just a basic check across the board.

A good background check provider will offer:

• A solid track record of experience
• Excellent customer support
• Legal compliance
• Solid data security measures
• Customised background screenings to the role & industry
• International capabilities
• Bespoke technology to make the process easier

A comprehensive background check programme should be tailored to the risks of the role as much as possible. If the open job position or your company are regulated, the minimum bar will usually be set by the regulators and a programme will be tailored to these regulations. In this case, the programme must be compliant and adhere to specific industry regulations.

If the role is not regulated, there are still different risks that must be considered and these should be addressed within the screening programme. These might include issues like conflict of interest, financial stability, impact on the public, and reputation of the organisation.

A comprehensive background screening programme will also be documented with well-defined policies that reduce the risk of it being challenged by unhappy candidates who don’t want to be screened. Having a policy in place also indicates that the programme has been carefully considered by the business and reduces the risk of it being inadequate or under budgeted.

How a company benefits from a comprehensive background screening programme

Investing in a background check programme can benefit a business in many ways. The following are just some examples:

Assures that candidates are truthful about their career history

A good background check programme not only reveals a candidate’s criminal history, but also if they have been untruthful about their education and employment history, including providing misleading information, false references, or exaggerating their experience. All of these can open your business up to liability and affect your reputation.

While we would like to assume that most job candidates are honest about their experience when applying for a role, the results of our work here at Verifile show that 60% of CVs checked in 2022 were found to have at least one discrepancy.

Anyone in charge of hiring knows that it’s in your own best interest to verify that job candidates have the necessary qualifications to do the job they’re hired for properly. This is especially important in cases where a job position requires a high level of expertise to maintain workplace safety and protect clients & customers. A comprehensive background screening programme can be found with providers that offer more than just a ‘one size fits all’ solution but one that is tailored to your business, industry, and job positions.

Promotes a culture of honesty

Background checks are a great tool for picking up on dishonesty during the recruitment process. If a candidate is not being honest about their experience and history, then they are likely to also be dishonest at work, which can affect the integrity of your workplace. Background screenings can therefore promote a culture of honesty in the workplace by encouraging employees to remain truthful about who they are with staff across all levels. Since all peers have to go through the same screening process, a background check programme can also enhance trust between staff and managers.

Prevents security threats

Employers consider enhancing safety and security in the workplace as one of the biggest reasons for conducting background checks. A thorough background screening programme can help establish trust between employers and employees by ensuring that candidates have no history of violent criminal behaviour or issues with previous employers. Hiring someone who has a risky past can disrupt your workplace, threaten safety & confidentiality, and diminish your company’s reputation and authority.

This is one reason why social media checks are becoming more vital in the background screening process. While a candidate may have no recorded history of criminal behaviour, a social media check can reveal red flags in their behaviour and ideology through the kind of posts they create and share on their social profiles. This can provide a more holistic view of an individual's general character and contribute a great deal towards the prevention of security threats.

Security threats that can be prevented with thorough background screening include:

• Insider threat - A threat that originates from within an organisation (e.g. by an employee, contractor, or vendor). This may include fake credentials, data breaches, fraud, intellectual property theft, or release of ransomware.
• Workplace violence - This can result in a person being abused, threatened, or assaulted while at work and violates the safety of your staff and work environment. Workplace violence can include physical or sexual assault as well as aggressive behaviour such as verbal threats or abuse of power.
• Public protection - This relates to employees who may be coming in contact with the public and ensuring that there is no risk of doing harm. For example, abuse by teachers to students or by doctors to patients.
• National security - This is a threat that could jeopardise national security, for example, if a utility company was under threat this could negatively affect the entire country.

A good programme can uncover any prior criminal history of fraud, uncover doctored IDs, and ensure you’re hiring safely to prevent these security threats from occurring in your workplace.

Screens candidates for trustworthiness

Background screening can help refine your candidate pool by filtering out those who are unwilling to be transparent and share their background history with you. If a candidate is not interested in proceeding with a background check then you know they may not be ideal for the role.

Even if a job candidate has an outstanding CV and seems convincing to the most sceptical of interviewers, if they are unwilling to proceed with a screening it may be a sign that they have something to hide. Background screenings can offer assurance that the candidates you are bringing on board are credible, trustworthy, and fitting for the job.

Protects even small businesses

Many people working in small businesses consider background checks to be something done by larger companies. However, small businesses have more reason to conduct background screenings as every person hired in a small business has a much greater impact on the organisation than those hired by a large corporation. In addition, small businesses often don’t have the infrastructure and means to handle issues that may arise from a wrong hire, including fraud, theft, and mismanagement of funds.

Larger companies often have pre-established internal policies and by-laws that make it easier for them to bounce back after a mishire. They also have more resources that can handle the costly task of firing and rehiring. As a result, a good employment screening programme can help small businesses conduct work safely and prevent issues that drain resources.

Keeps investors & clients assured

A thorough background screening programme shows clients and investors that your business is serious about its security and the quality of people it hires. You can provide investors and stakeholders with background check reports on job candidates to ease concerns that they may have and show them that you are recruiting a team that is trustworthy and reliable.

If the company you work for handles sensitive client information, a background check programme can provide peace of mind that your employees are credible and clients’ information is safe with your company. It shows clients that you take their privacy and confidentiality seriously and do your due diligence to ensure those who handle their information are trustworthy.

Strengthens company culture

A strong company culture thrives in an environment built on trust and community. Hiring a team that has undergone a thorough background screening can foster a company culture of honesty and integrity by demonstrating to employees that you’re committed to creating a safe workplace and hiring people who are a good fit. As a result, your employees feel more at ease in the workplace.

Background checks can also be used to ensure that a candidate being brought on board is the right fit for your team. Techniques such as social media screening are increasingly being used as part of a background check, and these help to reveal discrepancies between how a candidate portrays themselves professionally and how they act socially online. This reduces the chances of someone acting their way into a role and then turning into a completely different person once they’ve started the job. The result of such screenings is a stronger and more harmonious company culture.

Improves hiring process

Conducting background checks in-house can lengthen the hiring process and result in valuable candidates taking up other job offers. Investing in a good background check provider can help improve hiring times and reduce hiring costs by filtering out candidates who aren’t a good match and finding the right candidates quickly.

Providers with an easy-to-use online portal can make this process even quicker by allowing you to order checks and track progress through a platform, send candidates automatic reminders, and make it easy to upload their information. You don’t have to worry about using up internal resources chasing up candidates or managing background checks amongst other tasks.

Avoids negligent hiring & retention claims

Negligent hiring & retention is a major compliance concern for employers. These claims can be made by an employee who was hurt or damaged by another employee. This could include assault or being injured by a motor vehicle accident while on the job. If the accused employee

has a history of behaviour that should have been recognised by the employer, such as criminal violence or a driving under the influence conviction, then the affected employee can take out a negligent hiring claim against the company.

This states that the employer had reasonable information to believe that such behaviour could occur in the workplace and neglected to take reasonable care to prevent it from happening. These include not running background checks, or carrying out background checks but failing to recognise the danger in an employee’s past.

To avoid negligent hiring & retention claims - which can be costly and cause irreparable damage to your company’s reputation - you must carry out thorough background checks and make appropriate use of the results. Continuous screening of employees is also recommended to ensure that you are not retaining employees who have the potential to cause issues within your company.

Protects your company’s reputation

Background screening can be essential in preventing PR disasters that damage the reputation of your company. One example is failing to spot top executives lying on their resume and having the media find out. Another example is discovering that an employee has promoted hate speech, violence, illegal, offensive, discriminatory, or explicit behaviour on their public social media profiles.

Both of these scenarios can be prevented with a thorough background check that includes social media screening to provide a more holistic view of a candidate’s character and reveal any red flags that may be detrimental to your company’s reputation.

Failing to do so might result in someone else finding this information out first and demanding to know why you hired the candidate and how you failed to spot their behaviour. Your company’s reputation can be damaged and it will cost resources, time, and money to reassure the public that the messages don’t reflect your company’s values.

Prevents threats to company culture

Background checks can promote a harmonious workplace, and failure to do so can threaten your company culture. A bad hire can result in reduced productivity, internal conflict, affected employee morale, and a destabilised workforce. Your company might lose valued employees who quit when forced to work with bad colleagues or managers.

This can lead to a toxic and unsafe workplace culture with employees who are more stressed, less engaged, and can even result in physical violence, assault, or other forms of harassment.

Research also shows that hiring employees without a background screening process resulted in:

• Lower quality of work
• Negative attitude
• Not working well with other colleagues

Having a consistent, comprehensive background check programme can help you prevent these threats to company culture and promote a workplace that is pleasant and productive.

Avoids hiring decisions driven by emotional bias

Conducting background checks in-house can easily result in unintentional emotional bias during the hiring process. As a result, you may miss out on hiring an excellent candidate or go for one that is less suitable for the role.

Investing in a background check programme can provide necessary separation between your business and information revealed during a background check. You’re less likely to make unfair decisions when someone else is handling the background screening information. Candidates will also feel more secure knowing that their information is handled by a third party.

The hidden costs of not conducting the right background checks

For many companies, background checks are a large expense that they cannot afford. However, the cost of not conducting a background check, or for conducting the wrong kind of background check, can be even greater.

It’s important to seek out an in-depth background screening programme that is relevant to the role and industry. Not all roles require the same type of background checks, even within the same company. Failing to conduct the necessary type of background check can be ineffective and result in even more loss of time and resources.

These are just some of the hidden costs of not having the right background check programme in place.

Hiring the wrong person and having to rehire

The hiring process consumes a lot of time and resources, including training, advertising costs, and staff time. A Recruitment & Employment Confederation report calculated the average cost of one bad hire in mid-management on a salary of £42,000 to be around £132,000 encompassing recruitment, training, and lost productivity.

It takes around 6-9 months to train a new employee, who will be working for full pay at a reduced rate of productivity. Throughout this time, more experienced colleagues will be taking time out of their schedule to support and guide these employees in their new role. If they turn out to be a bad hire, these are losses that cannot be recuperated.

There are not only the direct costs involved with having to hire a new person, such as paying a recruitment fee, training, bonus, and time spent on induction, but also indirect consequences.

These include affected team morale, increased stress, damaged trust in management, loss in sales, lower productivity, and increased levels of absence. In some cases, this may even include fraud and damaged reputation from lawsuits or other issues.

A solid background check programme ensures you hire the right person the first time around and save your company time, resources, and loss of reputation.

Non-compliant hiring decisions

There are strict regulations in place which ask employers to take extra care when hiring staff, particularly for certain roles and industries. Having a thorough background check programme in place ensures you remain compliant and avoid unintentional non-compliance throughout the hiring process.

Working with a reputable background check provider ensures you meet all necessary levels of compliance. These providers are familiar with all the databases and playbooks necessary to adhere to regulations and can provide a safety net that simply isn’t possible when relying on internal resources.

Besides having to remain up-to-date with legislation and relevant regulations, conducting background checks in-house may result in unwittingly using non-compliant hiring practices that can result in multimillion dollar lawsuits and damaged brand reputation.

Investing in a background check provider can protect your company from legal liabilities by ensuring that background checks are compliant with local laws and suitable for the job position and industry.

Potential fraud

According to the Association of Certified Fraud Examiners, organisations lose an estimated £2.37 trillion to occupational fraud and theft globally. Businesses face three types of fraud that can result in significant loss of revenue. These are:

• Asset misappropriation - Employees stealing or taking advantage of company resources
• Financial fraud schemes - Employees intentionally mishandling financial statements
• Corruption - Bribery or conflict of interest

A comprehensive background check can identify candidates with a history of fraud or theft and protect your business from these risks.

Protect your workplace with a background check programme

Background checks are essential for protecting your company and fostering a healthy workplace culture built on trust and integrity. If you’re not already conducting background screening on

your employees, we can customise a programme that's compliant with local laws and suitable for your company’s industry and needs.

If you already have a background check process in place, it’s important to consistently review your programme to keep up with changing risks. Particularly with the rise of remote and hybrid working arrangements, new recruitment and insider threats are emerging that may not have been considered when creating your current screening programme. Our team can help you evaluate and update your background check process to ensure your workplace remains protected from preventable threats, now and into the future. Contact our team now for a free consultation.