Insights into global expansion & employee retention

Published: September 22, 2023

The Importance of a Background Check for Employment

In today's global business landscape, employment background checks provide insights into qualifications and character to ensure the perfect candidate fit for your organization. Learn how background checks reduce risks, strengthen your brand, and create a secure work environment.
The importance of a background check for employment

Key Takeaways

In today’s global business landscape, employment background checks provide insights into qualifications and character to ensure the perfect candidate fit for your organization. Learn how background checks reduce risks, strengthen your brand, and create a secure work environment. 

As businesses embrace a borderless economy, building and maintaining a strong and cohesive workforce is a critical component for success. Hiring global talent has become a tricky undertaking with businesses needing to implement internal checks and processes to ensure that employees meet unique business demands and conducting a background check for employment has become a critical step in the hiring process.

Employee background checks involve examining potential employees to assess the validity of their qualifications, character and history to help inform the hiring decision and determine their fit for a specific role.

What is a Background Check for Employment?

Also known as “pre-employment screening”, a background check for employment is an important step in the hiring journey that involves investigating a job applicant’s previous work history to help facilitate well-informed hiring decisions. An employee background check may involve conducting criminal background checks, evaluating the validity of a candidate’s education, employment background, credit history and more.

Here are five key reasons to conduct employee background checks:

  1. To verify employee qualifications
  2. To assess job fit
  3. To protect workplace safety
  4. To prevent fraud and theft
  5. Regulatory & Compliance purposes.

5 Ways Background Checks Help Hiring

The foundation of a successful and resilient workforce lies in well-Informed hiring decisions, and background checks serve as a valuable tool in helping hiring teams to make better candidate choices. Background checks directly impact the overall health and effectiveness of an organisations workforce, which is why hiring teams should integrate them into their hiring approaches. Here’s why making well-informed hiring decisions is must for companies.

1. Risk reduction: Hiring an individual without a deep understanding of their background can expose an organization to various risks, including legal setbacks, impact, workplace safety, and even result in financial loss. Making Informed hiring choices can help lower these risks by highlighting potential concerns before they become a problem.  

2. Enhanced efficiency: Employers that hire candidates into roles that closely sign with their qualifications are likely to see better job satisfaction and enhanced output- this is because employees that better match the job criteria are more likely to perform at a higher standard and make a positive contribution. 

3. Evaluating cultural compatibility: To build a cohesive team and ensure long-term employee retention, hiring teams should assess a candidate’s cultural fit within an organisation. Performing background checks can provide perspective on a candidate’s character and values.

4. Brand Integrity: Employing candidates with questionable track records can put an organisation’s reputation at risk which is why protecting a company’s image by making informed hiring decisions is critical in today’s competitive business landscape.

How to conduct a background check for employment

Hire the right talent with Playroll

With comprehensive knowledge of employment laws and regulations in over 180 countries, Playroll can help you hire, pay and manage talent faster more compliantly and with less risk than ever before. Our direct relationships with technology driven firms specialising in background checks, empower us to help you thoroughly assess potential hires, ensuring that find the best talent fit for your business.

The 4 types of Background Checks Every Hiring Manager Should Know

There are four key types of background checks that all hiring teams should know and each play an important role in the screening process by highlighting a potential employee’s suitability for a role, helping employers to make better hiring decisions, mitigate risks, and ensure that candidates are qualified and trustworthy additions to their organizations. Let’s take a closer look.

  1. Criminal record checks: Criminal history checks examine a potential employee’s criminal record which may include arrests, convictions, and any charges that may be pending, by using local, state and federal databases to perform these checks. These checks help hiring managers evaluate a candidate’s potential to pose  a risk to the company, especially for positions where sensitive data and financial duties are a large focus of the role. 
  1. Employment and education verification: Employment and education checks help hiring managers assess whether candidates have the required qualifications and experience for a given role, helping to validate claims about their education and employment history. Conducting employment and checks often involves contacting past employers to verify the validity of job titles, employment dates and job responsibility details. While education verification involves authenticating degrees, diplomas or certificates.
  1. Reference checks: Reference checks offer hiring managers a glimpse into a candidate’s work ethic and overall suitability for a role, by reaching out to the former employers, colleagues, supervisors or mentors. Hiring managers will request insight into how candidates performed in their previous role, including their most notable strengths and weaknesses, which provides valuable external perspectives that can help inform better hiring decisions. 
  1. Credit history assessments: Some roles, like finance managers and accountants, require employees to manage, handle and process sensitive company information. In these instances a credit check can provide hiring managers with important insight into a candidate’s financial integrity and trustworthiness, including their ability to navigate finances with care, pinpointing potential risks in the management of a company’s finances. 

Hiring managers and employers have the responsibility of protecting the rights and integrity of candidates during the hiring process, which is why they should keep up to date with changing regulations and best practices to ensure that background checks are carried out compliantly and ethically at all times. Here are 3 legal and ethical considerations every hiring manager should know about.

  1. Staying legally compliant: Background checks should always be conducted in alignment with the legal frameworks and regulations that govern the process. For example, The Fair Credit Reporting Act (FCRA) is a federal law that regulates the use of consumer reports, including background checks, while The Equal Employment Opportunity Commission (EEOC) enforces anti-discrimination employment laws. To stay compliant, hiring managers should always get consent from candidates to carry out the checks and ensure that any information collected does not result in discrimination.
  1. Balancing privacy concerns with hiring needs: When it comes to conducting background checks, hiring managers should apply caution, respect a candidate’s privacy and navigate the process ethically, making sure to only collect information that is directly related to the job scope. Respecting candidate privacy goes a long way in building trust and protecting company integrity. Hiring managers should also be transparent throughout the process, obtain consent from candidates and keep them informed about the information that is being sourced.
  1. Promoting inclusivity in the process: Hiring managers need to ensure that the background check process is unbiased, in line with EEOC guidelines and that candidates are not isolated based on their race, religion, national origin, disability or age. They should also only be used to help inform hiring decisions and not for any form of discriminatory bias.

Why Conducting a Background Check for Employment Matters

Integrating employee background screening into the hiring process can help build a more secure, efficient, and reliable work environment, that enhances a company’s position in the market. Here’s how:

Reduce risks and liabilities for the company: Background checks help mitigate against risks and liabilities that may be harmful to a business. By conducting pre-employment background screening, businesses can identify individuals with dubious backgrounds, such as criminal and unethical behavior, or fabricated qualifications, which can protect their reputation, finances and overall stability.

Protecting employees and the workplace: Conducting a background check for employment is instrumental in building a safe and secure workplace, by identifying candidates who may pose a risk to employee and company safety. With careful screening, hiring managers can weed out candidates with a history of violence, harassment, or other concerning behaviors, to build a more conducive and productive workplace for employees.

Boosting corporate reputation with comprehensive screening: Conducting background checks demonstrate a commitment to ethical hiring practices and can have a direct impact on reputation. Companies with a well-vetted workforce are more likely to deliver superior services and products, making clients, partners and customers more likely to trust and engage in business with them.

Making Background Checks More Transparent for Candidates

Maintaining transparency in the background check process not only fosters a positive candidate experience but also ensures that candidates are treated with fairness and respect. It’s a crucial element of ethical and responsible hiring practices that contributes to building strong employer-candidate relationships.

Effectively communicating the background check process to candidates: Transparent communication throughout the background check process is essential to build trust with candidates. Employers should provide candidates with clear and comprehensive information about the background check procedure at the beginning of the hiring process. This includes explaining what types of checks will be conducted, how the information will be used, and the importance of obtaining the candidate’s consent. Transparency ensures that candidates are well-informed and can make decisions about their participation in the process based on accurate information.

Addressing candidate concerns and questions: Candidates may have concerns or questions about the background check process, including how it may impact their candidacy or their privacy. Employers should be proactive in addressing these concerns and providing answers. This may involve designating a point of contact for candidates to reach out to with questions, concerns, or requests for clarification. Clear and timely responses demonstrate respect for candidates’ rights and can help alleviate any apprehensions they may have.

Employee background checks are not just a formality but an important aspect of modern hiring practices. They play a key role in assessing qualifications, character, and compatibility, helping to reduce risks, and upholding your organization’s reputation.

Improper candidate screening is costing your business. With Playroll you can locate, hire and manage top-tier talent in 180+ countries. Schedule a demo to learn more or Sign up for a free account.

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