Are you in the process of hiring employees? If YES, here is a detailed guide on how to do a quick but thorough background check on a potential employee.

Before a candidate is employed into an organization, it is important that a thorough background check is conducted on the individual. Background checks are usually performed at the final stage of the hiring process as a  legal check into a candidate’s past to find out if truly they are who they say they are.

Why Expend Resources to Run a Background Check on a Potential Employee?

Background checks are necessitated by the fact that without it, the result could be hiring a problematic individual or an individual who is prone to crime. A background check will go a long way to provide an employer with the assurance that the candidate is not only qualified for the post but will not also pose any legal threat to the establishment.

It is also important for every small business owner to assess the level of risk he takes on if he does not perform extensive background checks or if he does most of the investigative work himself. Businesses that involve working with children, the elderly or which has access to large sums of money on a regular basis should be willing to take on the extra costs that come from carrying out background checks.

However, it should be noted that performing background checks is not without its difficulties, especially for a small business. There is a wide and complicated pool of background checks for an employer to consider, and the cost of each of these checks adds up fast, multiplied by the number of potential candidates the employer is considering.

How Much Does It Cost to Run a Quick Background Check?

The total amount spent for each potential candidate’s background check varies based on the type of checks and a number of other factors, including the state in which the checks are run.

Usually, a basic background check will cost an employee a minimum of $15 and may even cost more than $100 per potential employee. If the checks are extremely thorough and involves gathering information from more than one state or country, then the cost involved may even be higher than $100.

Yet, even with the cost component that comes with background checks, they are still a very important part of the hiring process. If you want your business to succeed, then you cannot afford to make a poor hiring decision. As a matter of fact, for a lot of small businesses, one bad hire can make the difference between success and failure.

According to the U.S. Chamber of Commerce, 30% of small business failure is caused by employee theft. Effective background checks will help to reduce your risk of hiring objectionable, or even dangerous employees.

These days, every business wants to reduce cost through any possible means. The survival of most businesses depends on finding out ways that they can use to save money. One of the biggest expenses for businesses is locating, interviewing, and training new talent. Therefore, a hiring decision should be made with careful thought and consideration.

A very good and relatively cheap way to ensure that you are making a good hiring decision is to prescreen candidates through background checks . Not only do background checks cut down on bad hiring decisions, but background checks also proactively protect your company.

Small businesses often waive background checks either because they have a false sense of security and the trust that small business owners develop working closely with their employees or because they don’t just understand the legal liabilities associated with candidate screening and background checks.

For instance, if your business involves your employees interacting with or providing a direct service to customers, such as daycare or contractors, then you will be liable if an employee does harm to a customer, especially if it turns out that the employee had a previous history of wrongdoing.

A small or medium-sized business may never recover from such a lawsuit. You may also find that your business insurance provider offers a discount on coverage if you do background checks to pre-screen when hiring your employees.

Do You Need an Employee’s Permission to Do a Background Check?

If you want to do any of the following, then you will need the permission of the potential employee (in writing);

  • If you want to hire an outside company to investigate
  • If you want access to school transcripts, or want access to detailed military records.
  • If you want to do a credit report

However, if you made a request to a potential employee to do a background check in order to find out the above stated parameters and the employee refuses, then you are legally allowed to strike the employee out of consideration for the position.

How to Do a Quick Background Check on a Potential Employee

An employee background check seeks to find out certain parameters such as the candidates criminal records, credentials and qualification, driving records, and whether they are on a terror watch list or sex offender registry. Sometimes, it can also include a credit background check.

If you create a poor background check process, it will go a long way to add cost and complexity to your interview process and could even get you into trouble if it causes candidates to be excluded for reasons you are not permitted to discriminate on.

1. Have a consistent policy regarding how background checks are performed: this should be ideally documented in a flow chart which will allow everyone to know exactly what step to complete at any given point in time. A disorganized background check can prevent legal issues especially if you are only applying some steps to some candidates such as only doing credit checks on candidates from specific backgrounds.

2. Get legal advice on how local laws govern your use of background checks: background checks are known to uncover certain information that can be considered as sensitive and in some states in the united states of America, you are not allowed to gather certain information as part of a background check. Talk to your lawyer to make sure your background check does not cause legal issues for your company.

3. Give candidates a chance to clear up mistakes or misunderstandings with background checks: it is not unheard of for information that was gathered through background checks to be slightly incorrect or out rightly wrong. As such, it is advisable to give candidates a chance to explain the information you have gathered so as to give candidates that would have been excluded incorrectly a chance.

4. Use background check services that are FCRA compliant: The Fair Credit Reporting Act (FCRA) provides an outline of what can and cannot be done as part of a background check with regards to credit information. This document provides a nice summary of how the information should be treated from the candidates perspective.

Nearly all background checks are governed by the Fair Credit Reporting Act (FCRA), but you should know that there are an array of other laws that affect them, depending on state and region. For example, in some states, it’s fine to use credit and criminal background checks for any employee, in others you can only perform these checks for specific types of employees.

5. Know the difference between reference checks and investigative consumer reports: An investigative consumer report occurs when you contact an individual such as a former employer in order to verify certain information such as date of employment, position held et al. Reference checks on the other hand are typically easy and straightforward.

If your reason for rejecting a potential employee was because of information that was gathered through an investigative consumer report, then you are mandated to give the potential employee a copy of the report, whereas if you got the information through a reference check, then you do not need to disclose this to the candidate.

6. Use background checks consistently not on a candidate-by-candidate basis: you should apply the same background check process to each and every candidate you interview for the role. Applying it selectively to only candidates from a specific background or experience level can cause unintended legal consequences if it is shown to be a proxy for illegal discrimination.

Outside of this, waving some candidates through based on gut feel as “they seem like a nice person” defeats the purpose of doing a background check to protect your company.

7. Don’t take any part of the background check process for granted: you will be surprised that important information will often come up in the most ordinary steps of the background check process. Make sure that hiring managers take the process seriously and that they pay attention to the information obtained.

8. Don’t ask for information about character while verifying previous employment facts: As soon as you start seeking for opinions about the candidates character, attitude, et al., you’re doing an investigative consumer report. This falls under federal law, and as such, you are mandated by law to notify the potential employee, give them an option to ask for details, and comply with their requests. If you need this sort of information, it’s best to get legal advice first.

Does a Potential Employee Need to Provide Certain Information for a Background Check

To perform a background check you’ll need to get the full name, social security number, and date of birth of the employee. You will also need the employee’s permission for credit reports, school transcripts, and military records.

A credit report should include the following:

  • Criminal records check: this intends to find out the criminal history for the applicant. This is very important for positions that require trust or are related to security. It should include national and county records.
  • Social security validation: this intends to verify that the social security number a candidate provides is correct and legitimate and seeks to find all names, including aliases and variations, dates of birth and address history associated with the social security number. This will help to show the potential employer if the candidate has lived in undisclosed locations or under other aliases, which may reveal criminal records that wouldn’t have been found otherwise.
  • Address history check: this uncovers the previous locations where the potential candidate has lived in. Tracing a candidates previous address will make it a lot easier to verify other research, and may reveal jurisdictions where criminal background checks should be performed.
  • U.S. terror watch list check: this is very important for jobs that involve security. It seeks to find out if the candidate has a record in the terror watch list of the United States of America.
  • Sex offender registry check: this is very important for positions of trust, this check is included with most background checks.

Other options for a background check to consider

If you want an even more in-depth background check of a potential employee, here are a few other types of checks to carry out, depending on the type of position you are hiring for.

  • Character References: this seeks to find out what it is like to work with a person on a day to day basis. Is the employee lazy, easily angered, troublesome, well behaved? You should however bear in mind that this particular form of background check falls under FCRA rules, so it is best to get legal advice first.
  • Driving records: if the position you intend to hire an employee for involves driving, then you should go for one of these.
  • Student transcripts: if you need to confirm a student’s academic performance, then you will need to do this form of background check. However, you will need the candidates permission first.
  • Credit report: this will reveal to you the potential employees history of meeting financial obligations, as well as previous address information. If a candidate is going to be handling money, employers want to make sure that they can be trusted. Handing over that position to someone who is bankrupt, has a history of fraud or embezzlement, or is in a dire financial situation may not be ideal. While some states require employers to justify their reasons for conducting a credit check, others don’t.
  • Military service records: if a potential employee’s military service plays a big role in your decision to hire them then you will need to carry out that form of background check. The candidates permission is required for this too.
  • State licensing records: cross check to be sure candidates have the state licenses they need.
  • Professional license records: this seek to verify that a candidate has the required professional license for the position applied or to find out if the license they claim to have is valid.
  • Workers’ compensation: Employers may want to check a candidate’s past workers’ comp claims. This may be subject to legal restrictions – get legal advice first.

Should You Do a Background Check Yourself or Hire the Services of Background Check Providers?

If the information you are seeking to find out about a potential employee is very basic or if the background check does not hold much sway in the hiring decision, then you can carry it out yourself. If you feel like a cursory glance at information on social media and Google search is good, maybe this is your best choice.

However, with this method, you cannot really be sure of the accuracy of the information you gathered nor can you even be sure that you got the right person. It’s also possible you’ll see information that you should not legally be using in your consideration for a hire.

This is why, it is usually better to make use of a search firm instead.

Yes, it will cost you more, but at least, the results they will provide you with are a lot more reliable, detailed and will keep you away from seeing information that you are not supposed to see. In addition, background checks can be quite time consuming especially if the number of potential employees are much. If you decide to do the check yourself, then you may be wasting time that would have been better allocated to business.

How Long Does an Employment Background Check Take?

There is no singular timeline for how long an employment background check takes, while an employer has an ideal time-frame, there’s no guarantee that everything will finish up that quickly.

According to survey carried out by CareerBuilder, background checks usually take 24 – 72 business hours to complete. This time frame is quite idealistic, a pre-employment background check may take much longer than that. In fact, you can usually count on them being finished in less than five business days.

You should bear in mind that the longer a background check takes, the greater chance of the candidates taking another offer from a different employer. Unfortunately for employers and employees alike, there are tons of factors that prevent a timely background check. Here are a few factors that can delay a background check.

i. Social security trace: This is the first of nearly all professional employee background checks. The information that is attached a social security number is really valuable in the sense that it can reveal the kind of information that an employer or a background check provider is targeting.

With you social security, it is easy to trace where you have lived, worked, criminal history, multiple identities et al. Because this report is so common, employers can access it immediately. However, if the candidate has any issues with their social security number, such as if it was stolen or associate with unwholesome practices, then this could take some verification time.

ii. Criminal Databases – local, national and international: this is a very common search to undertake and as such, it is not usually associated with delay. Sometimes the delay can result from after the employer begins looking for your history via your social security number, they (or the third party that they hire) will begin combing through various criminal databases.

Unfortunately these databases are not always accurate and none are complete. Therefore, an employer will look for information about the potential employee on both a local and national level using these online repositories.

This will go a long way to increase the duration of the background check since any discrepancies that are noticed will have to be investigated further. You also have to factor in that most databases are incomplete and/or inaccurate, many are not automated. That means that an employer may have to submit retrieval requests to a human clerk. In fact, about 30% of US courthouses mandate in-person direct access.

In these cases, the turnaround time will likely stall because there is no way to predict the load of that individual clerk. In addition, most employers will consider submitting to global watch lists. These kinds of databases include people who have been labeled as potential terrorists, known fraud practitioners, and others who face regulatory sanctions.

In addition to researching the legal records attached to your social security number and looking for leads on you in criminal databases, your potential employer will also look for records from the DMV. This might sound silly at first, but there are two primary reasons that employers do this. The purpose here is typically to find more proof that you are who you say you are, and find out if you have a dangerous driving record.

Even though a speeding ticket from four years ago may be irrelevant, an outstanding fine for multiple driving under influence (DUI) and reckless endangerment is a cause for concern if the candidate is applying to drive a school bus. Remember, these records typically have a turnaround time of 3 business days, but if there is any missing or questionable information then it may take longer.

iii. Employment, licensing and academic histories: even though it may come as a surprise to some candidates that employers carry out checks to verify academic and employment history, but the truth is that some employers do. Usually, it will not drastically increase the duration of the background but in the following cases, it might.

  • If the former employer takes up a lot of time, before the needed information is released.
  • If the employer finds any discrepancies between the information supplied by the candidate and the former employer (or academic institution), then that will take additional time to sort out.

iv. Search results and social media checks: checking into the digital footprints of candidates is fast becoming a common trend. This means that employers are trying to find out if there are any red flags on the candidate from information gathered from search engine results or social media.

Even though this is sometimes viewed as an informal or unofficial aspect of employee background checks, it shouldn’t be taken lightly. This part of the background check has the potential to derail the turnaround timeline.

v. Candidates working outside of the US: if the potential candidates in question who is being checked is not based in the United States, it can impose addition time to the whole process. This is because the employer needs to gather and confirm all relevant releases and documentation in order to get that background information.

Additionally, dealing with foreign governmental bodies typically calls for a protocol different from that found in the United States. This automatically means additional processing time on both ends. If the candidate is outside the United States, it is very difficult to say exactly how long it will take to gather the necessary information.

Other Background Check Tips

1. Make sure that you have a good grasp of the Fair Credit Reporting Act before Background Checks: The Fair Credit Reporting Act (FCRA) was put in place in order to protect the privacy rights of job seekers and to give them recourse if an employer makes a hiring decision based on incorrect data found during background checks.

An employer is supposed to have the consent of a potential employee in writing before certain background checks can be carried out. In addition, if an employer makes a hiring decision based on information found from the background checks, they must inform the job seeker of the source used for the background checks.

As an employer of labor, you will have to comply with the FCRA. Complying with this act is easy as long as you know what to do the background checking company to use.

2. Pay for Only the Background Checks You Need: a lot of background checking outfits are of the habit of encouraging employers to purchase every piece of information they can find about a potential employee, which will come at a higher price tag.

However, an extensive background check is not always needed. For instance, if you are hiring a potential teleworking employee to program your website, a reference check, a criminal background check, and a technical certification background check should be all you need.

In conclusion, the cost that is involved in hiring a new employee is huge these days. Even for small businesses, the cost can run into tens of thousands of dollars when you factor in money spent hiring, damaged relationships with clients, the strain on your work culture that hurts productivity, work that needs to be redone, et al.

If the employees that were hired turn out bad, there is also an additional financial and legal cost involved for your business that if care is not taken could end up ruining it.

Don’t just rely on what a potential employee says in his or her resume and interview. Combat bad hires with a thorough background check. Most background checks take less than a week and cost under $80, so it’s worth your time and money to take this extra step.

Ajaero Tony Martins