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The Hidden Costs of an Inadequate Background Check

Date Published: February 12, 2020 | Last Updated: September 15, 2023 | By Accurate Background

In today’s world, blindly trusting a candidate’s resume or interview isn’t realistic when choosing the right person for a job. A background screening is a “must-have” part of the hiring process, helping to reduce risk and increase transparency.

Now, you might be asking, “why are we discussing this? Just about every company runs a background check these days.” And you’re right. According to a survey by HR.com, almost all employers – 96 percent – run some kind of background screening.[1]

Unfortunately, not all background checks are the same. And that’s the problem – “some checks” can mean “inadequate checks.” And these kinds of screenings cost your business much more than just money.

There are two important things to remember:

First, there’s more to a candidate’s background than just surface information. Many employers assume that a background check only needs to shed light on information regarding past criminal activity and actions with a previous company. But there’s far more to a comprehensive background screening than just those two categories.

For example, a person could be lying about his education or college degree. Maybe his professional experience is exaggerated or purposefully misleading. What if he’s using false or made-up references? Skipping over these potential red flags opens up your business to liability, reputational damage, or legal action.

And regarding the criminal check itself, skipping a deep dive creates potential risk. There are several different searches at the federal, state, and county levels that uncover different types of information, some of which could directly impact the hiring decision.

Second, there is no “one-size-fits-all” solution. Screening candidates from different industries goes far beyond plugging a social security number into a general search engine and waiting for results. Think about it – a truck or rideshare driver isn’t responsible for child or eldercare. And a financial planner won’t be serving food to customers hungry for dinner.

Each of these candidates – vehicle operator, healthcare professional, financial officer, and food service employee – must have the right aspects of his or her background examined per the appropriate regulations and laws.

…and these sorts of incomplete checks lead to more than lost dollars. There’s no doubt that a company loses money with a bad hire. Employee ramp-up time, compensation, training, equipment purchases – all of these add up to lost cash when the wrong person lands a job. But there’s more to it than that. According to SHRM.org, the majority of chief financial officers worry less about the loss of dollars, and more about productivity drops, internal conflict, and eroded employee morale.[2]

Bad hires often don’t get along with co-workers, and the wrong choice forces supervisors to spend more time managing them than other employees.[3] Further, according to business2community.com, great employees will quit when forced to work with bad colleagues or managers, leading to losses of valuable company resources.[4] And then the company has to scramble to replace good workers! In other words, a bad hire is like throwing a rock into the middle of a lake – you can see the splash at the surface, and then it ripples across the entire business.

Reduce your risk of a bad hire.

Bad hires are more than just financially damaging – underneath the surface, they can destabilize a healthy workforce and cause managers to waste valuable time with lost causes. Don’t skimp when reviewing candidates. Run a thorough and accurate background check for each candidate with a screening provider that:

  • Delivers comprehensive results quickly without compromising accuracy or quality.
  • Thoroughly understands global, state and city compliance nuances.
  • Promises onshore, 24/7 multi-lingual support.
  • Provides superior customer service for both the candidate and the employer.

Remember, the wrong hire affects far more than your recruitment costs. That’s why an extensive – not cursory – background screening process is a critical step during the hiring process.

[1] https://pubs.thepbsa.org/pub.cfm?id=6E232E17-B749-6287-0E86-95568FA599D1

[2] https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/morale-productivity-bad-hires.aspx

[3] https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/morale-productivity-bad-hires.aspx

[4] https://www.business2community.com/human-resources/how-much-does-a-bad-hire-really-cost-02108605

The foregoing commentary is not offered as legal advice but is instead offered for informational purposes. Accurate Background is not a law firm and does not offer legal advice. The foregoing commentary is therefore not intended as a substitute for the legal advice of an attorney knowledgeable of the user’s individual circumstances or to provide legal advice. Accurate Background makes no assurances regarding the accuracy, completeness, currency, or utility of the following information. If any regulatory developments and impacts are continuing to evolve in this area, please contact an attorney for more assistance.