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Get Your Facts Straight: The Truth About Background Checks

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Prostock-Studio / Getty Images
  • Many employers and employees have misconceptions about background checks, which can result in a hiring or application mistake.
  • The background screening process is more affordable and quick than most employers think.
  • Common background report red flags include application discrepancies, derogatory marks and criminal records. 

Hiring a new employee (or being hired) can be tough, and the inclusion of running a background check as part of the hiring process can make it even harder. There are a lot of misconceptions about background checks and pre-employment screening; for example, many employers and employees aren't sure if background checks are necessary or what information is collected. 

Many employers and employees make mistakes in the hiring process that can be avoided by understanding how pre-employment screening works

 

Editor's note: Looking for the right background check service for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

We looked at recent studies by CareerBuilder and Sterling to learn what the most common background check misconceptions are, and we spoke with industry experts about these myths.  

A primary misconception, for both employers and employees alike, is that background checks are unnecessary. Many job seekers think employers don't actually perform background checks, and, similarly, many small business owners believe they don't need to. 

Employee myth: I won't have to get a background check.

Reality: While this may be true for some, CareerBuilder research found that nearly three-quarters of employers today do conduct background checks at some point in the hiring process, with more than half also conducting a drug test. Employees should be prepared to undergo a pre-employment background check. 

Employer myth: Small businesses don't need to perform background checks.

Reality: Sterling found that many small business owners believe that only large corporations need to run background checks. However, small businesses, especially those working with vulnerable populations or sensitive information, have just as much to lose from a bad hire – if not more. Every employee represents your company, and making the wrong hire can reflect poorly on your organization or open you up to potential lawsuits. 

CareerBuilder found that 46% of workers don't know what information employers are checking for during a pre-employment screening. When job seekers don't know what type of information is being collected, it can result in poor application procedures. 

Employee myth: Employers won't call my references.

Reality: Many professionals don't think it is necessary to notify people they list as references. This poses a problem when someone doesn't know they were listed as a reference and is caught off guard by a call from a potential employer, giving the employer the impression that the candidate is unprofessional and disorganized. 

Employers can screen for a variety of things, including civil and criminal records and sex offender registries. Other common supplemental screenings include employment and education verification, verification of professional licenses, motor vehicle records, credit reports, references, military records, workers' compensation history, healthcare sanctions and drug screenings. 

Matt Jaye is the vice president of business development with Corporate Screening and a member of the Professional Background Screening Association (PBSA) and the Society for Human Resource Management (SHRM). He said that although many people think there is one ubiquitous background check, the type of information collected varies on a case-by-case basis. He added that employers should consider the risks their organization may face, as this will vary by industry and job type. 

"As an example, a healthcare organization has a high level of risk due to the close personal contact their employees may have with patients, including vulnerable populations [such as] children, elderly and the disabled," Jaye told Business News Daily. "Other factors to consider may be regulations that an organization is required to abide by in order to meet legal, industry and/or governing agency requirements." 

The type of pre-employment screening you need to run will determine how much your background check will cost. Since there is no one-size-fits-all background check, you can choose a background check provider that fits your needs and your budget. 

Employer myth: Background checks are too expensive.

Reality: Many business owners believe that background checks are just an additional, unnecessary cost. Although costs vary based on the screenings performed, employers can choose between basic, standard and premium screenings, costing an average of $15 to $80 per report. While this may seem like an unnecessary expense, it's cheaper than making a bad hire – a CareerBuilder report found that the average cost of a bad hire is $15,000.  

If you are creating a background check process for your company, Jaye recommends conducting an audit with a trusted partner who can assess your risk, determine any gaps in any existing processes, and assist you in developing a program that fits your unique needs. 

With several great background check services available, acquiring one is easy. However, many employers and employees are unsure of how long it takes to receive background check results and how long those results are good for.  

Employer myth: Background checks take a long time to complete.

Reality: In their haste to hire the right candidate as soon as possible, many employers believe that performing pre-employment screening will take too long. In reality, Sterling said that most checks can receive results within one to three days. 

The results of a background check are valid for all verified records up to the date it was conducted. Jaye advises against using any background check report that is older than 30 days for hiring decisions. To avoid using outdated background checks, many companies choose to perform ongoing background screening on current employees. 

What constitutes a red flag can differ by company and position, but the most common red flags are discrepancies and derogatory marks. The information a candidate submits on an employment application should accurately reflect the candidate's history. 

CareerBuilder found that 13% of professionals have approximate employment dates on their resumes, but this inaccurate information can raise a red flag, causing hiring delays and sometimes even candidate disqualification. [Read related article: 20 Resume Mistakes Keeping You From Getting a Job (and How to Fix Them)] 

Jaye listed some other common background check red flags as follows: 

  • An applicant claims to have a degree that cannot be confirmed by the educational institution.
  • Information obtained from the official verifying source does not match what was claimed by the candidate (claimed position, dates of employment, terms of separation, etc.)
  • Sanctions, disbarment or disciplinary actions have been claimed against their professional license.
  • They have reportable criminal convictions (that are relevant to the position they are applying for). 

Although some information, like a criminal conviction, may seem like an obvious red flag for every employer, hiring managers should be wary of automatically dismissing candidates without further investigation. 

Employer myth: You can immediately disqualify a candidate with a criminal record.

Reality: If a background check reveals a criminal record, the Fair Credit Reporting Act (FCRA) requires employers to undergo adverse action and give the candidate the opportunity to dispute the claim. Additionally, employers should only take the offense into account if it is relevant to the position they are hiring for (e.g., a candidate with a DUI applying for a delivery driver position).  

As a job seeker, it is always good to know what type of information is being shared about you. You can view public records and perform self-requested background checks; however, these types of direct-to-consumer searches don't fall under the same FCRA-compliant screening process as pre-employment background checks and, therefore, won't always show you what employers are seeing. 

"Employers and job seekers should know that background checks are in place to protect their safety and the safety of their organization," said Jaye. "The background screening firm should be considered a trusted partner that is there to assist in getting that new hire onboarded as quickly as possible while providing only the most accurate, reliable and legally compliant information."

Skye Schooley

Skye Schooley is an Arizona native, based in New York City. She received a business communication degree from Arizona State University and spent a few years traveling internationally, before finally settling down in the greater New York City area. She currently writes for business.com and Business News Daily, primarily contributing articles about business technology and the workplace, and reviewing categories such as remote PC access software, collection agencies, background check services, web hosting, reputation management services, cloud storage, and website design software and services.