Conducting Background Checks

HR Resource
March 12, 2013 — 2,593 views  
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The background check is a critical part of hiring. You can't afford making poor decisions while hiring for your own business. A single hiring mistake could cause the total collapse of the company. The Chamber of Commerce estimates that employee theft causes 30 percent of failures in small businesses. Carrying out background checks effectively will remove a considerable amount of risk involved in hiring.

Conduct an Effective Background Check

A company that does background screening helps to protect the workplace rules. Do some research and make sure that the company will conduct the investigation according to your needs and provide their best service. Also make sure the company you choose has a toll-free number through which a person can help you with any questions. You need the consent of the potential employee to conduct background checks. A reputable company which conducts background checks will provide you with accurate and current data.

It is also common for these companies to buy every piece of data they require about the potential employee and they charge you a lot for it. Unless your business has to know everything about the candidate, avoid this and make it a point to pay only for what is required.

Adding a web search to the background checks will effectively supplement it. Even though the information might not be trustworthy, it will help to get an insight of what kind of person the candidate is.

Protect Yourself from Legal Liability

Often small businesses forgo background checks on candidates. One reason is the fake sense of trust and security that the owners develop after working closely with the employees. Another reason is that most owners do not understand the liabilities that go with background checks and screening of the candidates.

If a business provides customer service, it is considered liable if one of the employees harms a customer. Background checks reveal that this employee has had a previous history of wrongful conduct. A SME (Small or Medium Enterprise) may never recover from this kind of a lawsuit. You might also find that you get a discount from your insurance provider when your hiring process involves background checks.

Fair Credit Reporting Act

The FCRA (Fair Credit Reporting Act) was initiated to protect the privacy rights of a person looking for jobs and to provide him/her recourse when an employer makes a wrong hiring decision based on imprecise data obtained from the background investigation. Firstly, an employer has to receive a written consent from the job seeker for performing the checks. Secondly, if the employer makes an incorrect decision based on background check information, the job seeker should be informed about the source of this data. Once you figure out what you have to do, complying with the FCRA will be easy. Selecting a good company for background investigation will also help.

Consumer Financial Protection Bureau

The Fair Credit Reporting Act (FCRA) instructs that any employer using a consumer reporting agency for conducting the investigation must give certain notices regarding the aim of the background check, and get a written authorization for the investigation. The FTC (Federal Trade Commission), which had been overseeing all employment matters considered under the FCRA, has passed some authority to the CFPB (Consumer Financial Protection Bureau). Therefore, in order to challenge the result of the background investigation of an employee or to obtain some other data about the check, an individual needs to get in touch with the CFPB and not the FTC.

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