Why Small Business Owners Can't Afford to Skip Background Checks – Part III
The cost of a bad hire far outweighs the expense of proper screening. The consequences of skipping this crucial step can be severe and long-lasting from financial losses to damaged reputations. By implementing a robust pre-employment screening process, you're not just avoiding potential problems – you're setting your business up for success with a team you can trust. In the last part of this blog series, we’ll explore how to implement a background check process within your business effectively.
Implementing Background Checks
1.Develop a Policy: Start by establishing a clear and comprehensive background check policy.
This document should outline your business’s procedures for conducting background checks on both job candidates and current employees. Did you know that 77% of U.S. employers have a documented background check policy? It’s a best practice that CPR strongly recommends for consistency and legal protection. A well-drafted policy ensures that you remain consistent in your screening process and can provide a solid defense in the event of litigation.
Your policy should explicitly outline a process for employees to report theft or fraud by co-workers since workplace fraud is often detected by a tip from another employee rather than through formal audits. The policy should also specify when background checks will be conducted, such as before hiring during internal promotions. It's essential to have an HR consultant like CPR or an employment attorney review your final policy to ensure compliance with legal standards.
Your policy should explicitly outline a process for employees to report theft or fraud by co-workers since workplace fraud is often detected by a tip from another employee rather than through formal audits.
2. Use Reputable Screening Services: Partner with professional background check providers that specializes in serving small businesses.
When choosing a provider, consider factors such as:
Cost
Turnaround time
Assistance with providing templates such as consent forms
Commitment to confidentiality
Solid reputation with small businesses
Remember, while your business may still be held liable for any violations related to background checks, working with a reputable provider can help mitigate these risks and ensure compliance with all relevant laws.
3. Be Transparent: Inform candidates about your screening process as early as possible in the recruiting process.
It’s a good practice to ask all candidates (be careful not to pick and choose which candidates you ask):
“As part of our screening process, we conduct background checks. Will you be willing to consent to a background check as part of our recruiting process?”
Consider it a potential red flag if the candidate hesitates or has reservations.
4. Obtain Written Consent: You must get the candidate's permission before conducting any checks.
Your background check provider should supply you with a template that can be customized for your business. This document should clearly define which kind of checks may be conducted and require the candidate’s signature to give consent.
5. Allow For Explanations: Give candidates an opportunity to explain any negative findings in their background check.
It’s important to note that you cannot discriminate against job applicants based on their criminal history unless the conviction is directly related to the job. Ensure your screening process complies with the Fair Credit Reporting Act (FCRA) regulations, which require you to provide candidates with the opportunity to correct any inaccuracies in their record. Your background check provider should help manage this process.
6. Follow Legal Guidelines: A criminal history does not automatically disqualify a candidate. Here are some guidelines to follow:
Focus on convictions, not arrests, as everyone is innocent until proven guilty.
Consider the length of time since the conviction and the number of offenses.
Only serious convictions, such as a recent sexual assault or theft, should be considered. Ensure your screening process complies with federal, state, and local laws, such as “ban-the-box” regulations, which prohibit employers from asking about criminal history on job applications. Read our previous blog post regarding these regulations.
7. Make Fair Decisions: Background checks should be used to reinforce a hiring decision, not to intentionally disqualify someone or reduce the number of applicants. To ensure fairness:
Avoid unconscious bias by basing decisions solely on factual information uncovered during the background check.
Make hiring decisions based on job-related criteria, considering the nature and severity of any issues uncovered.
Document the reasons for choosing to not proceed if you determine that a candidate poses a high risk to your small business and is rejected.
Conclusion
Background checks are a crucial investment in your company's future. Skipping this step may save time in the short term, but the potential costs of a bad hire – from financial losses to reputational damage – are far greater. As a small business owner, your resources are precious, and implementing a robust pre-employment screening process is one of the best ways to protect them.
In today's competitive and litigious business environment, thorough background screenings aren't just advisable – they're essential. By taking these steps, you’re not only avoiding potential problems but also setting your business up for long-term success with a reliable and trustworthy team.
Disclaimer: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information.
