Background screening of prospective employees is an essential risk management tool that can reduce employee turnover, deter theft and embezzlement, and prevent litigation over hiring practices. Although background checks come with some costs, hiring without screening could lead to far greater financial losses, including the cost of recruiting, hiring, and training unqualified employees only to replace them later.
Why Pre-screen?
Many applicants may have a criminal record or undisclosed information that could affect their suitability for a position. Pre-screening offers several advantages:
- Discourages applicants from hiding a criminal background or falsifying credentials
- Reduces uncertainties in the hiring process
- Encourages honesty throughout the hiring process
Extent of Background Checks
At minimum, ensure an applicant’s record does not include a criminal conviction or deferred prosecution for certain offenses, which can be found through federal, state, and county records. Taking a risk-based approach, consider other levels of screening, such as identity, education, and professional license verification, based on the position’s sensitivity. Continuing to perform background checks on current employees can also help maintain workplace safety and integrity.
An additional option for a comprehensive check is a credit report, which provides verification of social security numbers, employment history, and any financial concerns that may influence hiring decisions.
Employment Applications
A background check process is more efficient when employment applications include:
- Statements affirming the accuracy of provided information and specifying grounds for termination if false information is discovered
- Any other names used by the applicant
- Reasons for leaving previous positions (phrases like “disagreement” or “mutual agreement” can be red flags)
- Clear instructions to list actual employers, including staffing firms if applicable
- Detailed contact information for listed references
Streamline the process with an online application system that includes required fields for screening, allowing easy updates across the organization. Application data can link directly to provider systems for seamless background checks.
Legal Duties
Outsourcing background checks to a professional service provider can ensure thoroughness and efficiency. When selecting a provider, consider their financial health, identity theft safeguards, and service offerings. Under the Fair Credit Reporting Act (FCRA), you have several obligations:
- Applicants must provide written authorization before conducting a background check.
- If you deny employment, provide the applicant with pre-adverse and final adverse action notification letters.
For More Help
If you need assistance with risk management in hiring and termination processes, contact Swarts, Manning & Associates. Our insurance experts can help protect your business and provide peace of mind.
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