Inquire Before You Hire: The Benefits of Employment Background Checks

Many employers conduct pre-employment screenings for job applicants. During this process, the employer investigates an applicant’s backgrounds to verify the accuracy of his claims and look into any possibility of criminal history. Common pre-employment screenings include: criminal history screening, social security number tracking, credit history, employment verification and drug testing to name a few.

Companies are running credit checks on job applicants more often and using that credit information as part of the process when making hiring decisions. A Society of Human Resources Management (SHRM) survey reported that 60% of employers check the credit of at least some job applicants. A job applicant credit report will show details about personal finances including credit card debt, mortgage, car payment, student loans, payment history and defaulted loans.

Employers who utilize the pre-employment screening as part of their recruitment process realize a number of important benefits. One of those benefits is a general improvement in the quality of applicants which ultimately leads to better workers, higher productivity, increased quality and lower employee turnover. Simply announcing to all applicants that the intention to conduct background checks will discourage some candidates from applying. Statistically, 51% of all resumes contain inaccuracies in employment, job performance and educational achievement. Equally important, the announcement of the background check will encourage some high risk candidates with criminal backgrounds to eliminate themselves, which saves both time and money in the recruitment process. Conversely, the announcement does not discourage good qualified applicants who know their background check will not reveal significant problems.

The return on investment for employment background checks is easily recognized by employee turnover reduction. With the reasonable cost of third party background checks, it is easy to see the financial return on the long term benefits of employee productivity and quality and most importantly in employer satisfaction.