Recruiter’s Guide: Employers and Background Checks

Every employer has a story to tell of the worst hiring decision they ever made. They rushed hiring someone without conducting a background checks or they needed a new employee in a hurry and they seemed a perfect fit to fill a vacancy in a crisis. Sooner or later though the promising new recruit showed their true colors and the employer was left wondering why they’d hired someone so inept or untrustworthy in the first place.

Bad hiring experiences are abound and they are life lessons for everyone involved. The employer certainly learns to be more cautious when recruiting and now sees the value in paying for pre-employment screening services to sort out potentially bad apples to have a shortlist of competent, more trustworthy candidates to choose from.

Counting the cost of bad hires

Hiring is costly and time consuming but the cost of a bad hire can equate to a third of that employee’s annual salary, or even more, if the recruit steals from the company or causes losses or damage through negligence or irresponsible behaviour.

That’s why the vast majority of businesses that have made it through their first turbulent years do their due diligence when hiring new recruits by performing background screening checks, which can be surprisingly inexpensive. The amount an employer spends on background screening or the extent to which they vet their job candidates depends on the following factors:

• Size of the organization
• Type of job vacancy
• Level of responsibility
• Company resources
• Industry requirements

These factors impact the way individual employers handle recruiting. At Intelimasters, we advise employers on the most suitable types of background checks they should perform, depending on those factors and their budget. 

When hiring for high levels of responsibility, we might recommend combining criminal record checks with directorship and bankruptcy checks as well as checking credit scores, among others. But if the job vacancy is for a menial role with no involvement in business finances, there wouldn’t usually be a need for bankruptcy checks, so we wouldn’t advise including those checks in the screening process – saving our clients money and time.

Where can you save money on vetting?

Cost savings are foremost for employers. Thankfully, much of the information used in basic background checks is found in public records, which can be accessed by almost anyone, making checks such as basic ID verification quite straightforward and therefore cheap. On the other hand, researching criminal records usually involves compiling data from numerous sources such as local court houses. Knowing where to look and when to investigate further while ensuring the accuracy of the data requires more time, experience and expertise, which is why employers usually pass on these screening tasks to professional credit reporting agencies like us.

Ensuring transparency and conformity with labour and privacy laws are more good reasons for outsourcing background checks to trusted third-party background screening providers. You can save time and money by only using the background checks most suitable and cost-effective for you and your organization.

What can employers see on a background check?

Regardless of whether you or a professional screening agency performs background checks on job applicants, any data that’s used is available on public record. And if you are going to use that information to make a hiring decision, you must first get each candidate’s permission.

The Fair Credit Reporting Act is a US federal law to ensure fair use of personal information. Organisations and even individuals must ensure they are compliant with the law with two vital procedures:

1. Inform job applicants that you may perform background checks (use a separate document, not the application form). 
2. Obtain authorization from the applicant to perform background checks.

First here’s a list of the types of checks that could be included in the background screening of job applicants.

• ID verification
• Criminal record check
• Resume verification
• Past employment verification
• Educational history
• Professional licenses and certifications
• Driving licence check
• Credit history

As we mentioned earlier, not all these checks are necessary and we wouldn’t encourage our clients to incur the additional expense of checks that have no real bearing on a candidate’s ability to do the job. Here’s what employers and background screening agencies look for during their investigations.

Criminal Record History Check

Basic criminal record checks are done locally by searching through records at county or district court houses as there isn’t a single ‘national’ database of criminal records. We can find out the following through these records:

• Felony convictions
• Misdemeanour convictions
• Any pending charges (if search is allowed under state laws)
• Any acquitted charges (if search is allowed under state laws)
• Any dismissed charges (if search is allowed under state laws)

ID Verification

If there’s any background check worth doing, it’s confirming a candidate’s name and date of birth to make sure the person you might hire actually exists or isn’t pretending to be someone else. Verifying a candidate’s name and date of birth through public records is quite quick and cheap as far as background checks go but doing so is vital to avoid becoming a victim of identity fraud, which affects millions of people each year.

Social Security Number Checks

A social security number check is separate from a criminal background check and not the same as an ID verification check but it’s still a vital component of the background screening process to ensure against potential identity fraud.

Social security details are not a matter of public record so only certified researchers have the level of security required to access the Social Security Administration (SSA) database. We check the social security number number provided by the applicant against the SSA database, which helps us verify details such as age, address, and indeed whether the person is still alive.

The SSA database also reveals any aliases the person has that they may not have disclosed in their job application, which would be a red flag worth further investigation. Discrepancies could indicate criminal activity, or could reveal evidence of identity theft. On the other hand, the candidate might be a perfectly law-abiding citizen and have valid reasons for obscuring their idendity. Our aim is to establish the facts by acting on the information made available.

Employment History Checks

Unless you’re dealing with fresh graduates, employment history is worth looking into, especially for positions in industries which require a certain level of experience, regardless of qualifications.   

Primarily we want to verify that the candidate has actually worked at the places stated in their application. Then there are questions regarding commitment and pay scale to ask: 

• Do the employment dates match up? 
• What was the job title?
• What was their reason for leaving?

These questions are usually answered by contacting former employers directly and should be done with up to at least three previous employers wherever possible.

International Employment History Checks

At Intelimasters we frequently process job applications for our international clients from candidates living and working in other countries. Our multi-national network of accredited local experts ensures a speedy screening service even for foreign hires.   

Reference Checks

Reference checks are usually reserved until later in the hiring process, once we’ve established a shortlist of suitable candidates to move forward with, which means less of a drain on resources and more cost savings for the client with fewer applications to process at this stage. 

This stage can also take time to get a response from individual references but helps give insight into the candidate’s character, skills and other attributes he or she can bring to the workplace. Hearing from former co-workers can paint a picture of their ability to fit in as a team player or how well they perform in a leadership role.

Social Media Checks

This is a controversial and sensitive aspect of background screening and there are specific laws surrounding applicant screening using social media. Those laws vary form state to state and country to country. Although social media posts are public record for anyone to see, their content should not be a determining factor in any hiring decisions. Nevertheless, a majority of employers admit to using social media for screening purposes so they can get more of a background picture on candidates close to completing the hiring process. After all, professionals often create social media accounts other than their personal social media profiles to showcase their portfolio and work experience, so researching social media profiles on professional platforms such as LinkedIn or Facebook business pages is arguably justified.

Verifying Qualifications & Licenses

Checking candidates’ educational background might not be necessary for some kinds of work but it’s a must for positions requiring a certain level of education or certification. First we confirm that a candidate actually attended a college or university and then we’ll verify whether they actually completed and passed the course. 

Verifying licences is also vital to ensure you’re employing a currently certified professional and not an impersonator. There are often cases in which candidates applying for positions in the medical profession for example that did indeed attend medical school but failed to pass or complete the course. The potential collateral damage and legal implications are horrendous in such cases of professional misconduct.

Driving License Checks

This is another check typically reserved for hiring for a job in which driving is involved. If not, it’s an unnecessary expense which could be avoided. However, even if a driving record has no bearing on the job requirements, checking driving records can reveal whether a driver has an excessive number of parking tickets or has been convicted of drink-driving offences, in which case there would be cause for concern that the candidate could pose a risk to company property or indeed personnel and public safety.

Credit & Bankruptcy Check

Candidates applying for positions of high responsibility such as directorships or with financial responsibility should have their credit history checked to verify credit scores and reveal whether they have ever filed for bankruptcy. We can also find out whether a candidate has a previous or existing directorship, which could significantly impact the new employer. We see on average about 20 per cent of employers using credit checks as part of their background screening process.

Medical Records Checks

Due to doctor-patient confidentiality and privacy protection, medical record checks are not part of a regular job screening process, although there may be exceptions in the military and other similar professions. However, any medical examinations would be carried out internally by in-house medical staff.

What screening checks are not allowed?

There are many aspects of someone’s background that are not part of the screening process for job applications, because, like medical records, they are private matters and unrelated to skills, education and experience. There are also an increasing number of laws to protect individual privacy rights and restrict the basis of hiring decisions. These personal background aspects are: 

• Ethnic background
• Gender
• Marital status
• Political views
• Physical disabilities
• Religion

Sexual orientation
Are you an employer with plans to use background screening for your next hiring imitative? Contact us for advice and more information on appropriate background checks for your specific situation.