Are you preparing to promote an employee, or have you just arranged interviews for an open position and found your ideal candidate? If so, now is the time to think about conducting a background check.
It’s a crucial step that ensures your decision is based on accurate information, helping you avoid potential risks. But did you know many employers unintentionally make mistakes during this process? These errors can lead to poor hires, compliance issues, or damage to your company’s reputation.
According to a survey, over two-thirds of employers dealt with the fallout of a bad hire in the past year. Alarmingly, 41% of respondents estimated that a single bad hire cost their company $25,000, while 25% reported losses exceeding $50,000. Beyond financial strain, a poor hiring decision can impact team morale and disrupt workplace dynamics.
So, let’s look at the eight common mistakes in background checks and how to avoid them.
How Do Background Checks Work?
Background checks are a crucial part of the hiring process. They help employers verify the information provided by job candidates and assess any potential risks. Here’s an overview of how background checks work:
1. Candidate Authorization
Before employers conduct a background check, they must get written consent from the candidate. This ensures they comply with legal requirements, such as the Fair Credit Reporting Act (FCRA). Without this permission, the background check cannot proceed.
2. Information Collection
Once consent is obtained, employers gather the necessary information to conduct various background searches. Identifiers such as the candidate’s full name, address, Social Security number (SSN), and date of birth (DOB) are required to perform background searches such as Criminal Searches, Civil Searches, Motor Vehicle Reports (MVRs), Education Verifications, Employment Verifications, and more.
3. Criminal Background Check
The primary focus of criminal background searches is examining criminal history. This includes conducting searches at the county, state, and federal levels to uncover a variety of criminal records, ensuring a thorough and comprehensive review of an individual’s history.
4. Verification of Employment and Education
Employers frequently verify a candidate’s employment history and educational credentials. This process confirms details such as job titles, employment dates, degrees obtained, and other relevant qualifications.
5. Credit Report
Employers may request a credit report for positions that entail financial responsibilities or access to sensitive information. This report provides insight into a candidate’s financial history, such as outstanding debts, payment history, and public records like bankruptcies or liens. It’s important to note that employment credit reports do not include credit scores.
6. Drug Screening
Employers often incorporate drug testing into the hiring process, particularly for safety-sensitive positions or industries where impairment could compromise safety and performance. These tests aim to ensure a drug-free workplace and may be mandated by federal regulations in certain sectors.
7. Results Evaluation
Upon completion of all background screenings, employers assess the findings for any inconsistencies with the candidate’s provided information. Potential red flags include:
- Criminal records relevant to the position.
- Discrepancies in employment history.
- Fabricated educational qualifications.
- Refusal to undergo a background check. Identifying such issues is crucial for making informed hiring decisions.
8. Adverse Action Process
If a background check reveals any issues that lead the employer to reconsider the hiring decision, the candidate is notified and allowed to dispute or explain the findings. This step ensures compliance with the FCRA and protects the candidate’s rights.
Overall, background checks help employers make informed decisions by confirming the accuracy of a candidate’s qualifications and assessing potential risks. Check out our extensive guide on how the background screening process is done.
The Common Mistakes in Background Checks
Background checks are essential for making informed hiring decisions but must be conducted with precision and adherence to legal standards. Even minor inaccuracies in the process can result in significant consequences, such as legal liabilities, compliance issues, or hiring unqualified candidates. A meticulous and compliant screening process helps mitigate these risks and ensures that employers select the most suitable candidates for their organization.
1. Relying on Incomplete Background Checks
One of the most common mistakes employers make is relying on incomplete or limited background searches. Individual background searches, such as federal criminal searches, civil court record searches, and employment verifications, each provide unique and essential insights into a candidate’s history. Employers must recognize that these searches are separate services, offering distinct information critical for building a comprehensive screening process—learn more in our Ultimate Guide to National Criminal Database Search for Employers.
Failing to conduct a thorough screening can result in hiring individuals with undisclosed issues that may compromise workplace safety, productivity, or compliance with regulations. By carefully selecting and combining the right searches, employers can ensure no critical information is overlooked, fostering a safer and more reliable workforce while protecting their organization from potential risks.
2. Failing to Get Proper Candidate Consent
One of the most critical errors employers make during the background screening process is failing to obtain proper candidate consent. This mistake is not only a violation of the Fair Credit Reporting Act (FCRA) but also undermines trust between the employer and the prospective employee.
Under the FCRA, employers are required to notify candidates in writing before conducting a background search. This notification must:
- Be presented as a standalone document, separate from the job application or any other forms.
- Clearly explain the purpose and scope of the background search.
Additionally, employers must secure written consent from the candidate before proceeding with the screening.
Failing to comply with these legal requirements can result in severe consequences, including:
- Legal Penalties: Non-compliance with FCRA regulations can lead to lawsuits, fines, and other legal actions.
- Financial Losses: Settling claims or paying fines can impose significant financial burdens, particularly on small businesses.
- Reputational Damage: A lawsuit can harm your company’s reputation, making it difficult to attract and retain top talent.
- Erosion of Trust: Candidates may view the lack of transparency as a warning sign, damaging relationships with potential hires.
Obtaining proper consent is not just about legal compliance—it demonstrates respect for the candidate’s privacy and fosters transparency in the hiring process. By following these steps, employers can avoid costly mistakes, protect their reputation, and ensure a seamless hiring experience.
3. Relying Only on National Database Searches
One common mistake employers make during background screening is relying exclusively on national database searches. While these searches can provide a broad overview of criminal records across multiple jurisdictions, they are not comprehensive and may lead to incomplete or inaccurate results.
National database searches often come with significant limitations, such as:
- Data Gaps: These databases may not be updated regularly, resulting in missing recent charges or convictions.
- Limited Jurisdictional Coverage: Some jurisdictions do not contribute their records to national databases, meaning criminal history from those areas may go undetected.
- Incomplete Records: A candidate convicted in a county that doesn’t report to the national database could evade detection, leaving employers unaware of critical information that could influence hiring decisions.
To ensure a thorough and accurate screening process, national database searches should be supplemented with additional, more detailed background searches, including:
- County-Level Criminal Searches: These searches offer localized and detailed records directly from county courthouses. They provide the most current and accurate information for jurisdictions where candidates have lived or worked. Learn more in our blog, What Shows Up on a County Criminal Background Check.
- Statewide Criminal Searches: Ideal for states with centralized criminal records, these searches provide broader coverage within a single state while filling gaps that may exist in national databases.
- Federal Criminal Searches: These searches uncover offenses prosecuted at the federal level, such as embezzlement, tax fraud, or crimes crossing state lines, which are not included in county or state-level searches.
By combining national database searches with county-level, statewide, and federal searches, employers can achieve a more complete understanding of a candidate’s history, ensuring informed and confident hiring decisions.
4. Ignoring State-Specific Compliance Rules
One of the most critical mistakes employers make during the background screening process is neglecting state-specific compliance rules, often unintentionally. Each U.S. state has unique laws governing what can and cannot be included in a background search, and failing to adhere to these regulations can lead to legal issues and costly penalties.
For instance, many states have adopted “ban the box” laws, which prohibit employers from asking about a candidate’s criminal history on job applications. These laws aim to provide candidates with an opportunity to be evaluated based on their skills and qualifications before any criminal history is considered. Violating these laws by including criminal history questions on an initial job application in a covered state could result in significant legal consequences.
Furthermore, states impose strict limitations on how far back a criminal background search can go. For example, some states restrict the consideration of criminal convictions older than a specific number of years. Employers who disregard these time limits may inadvertently make discriminatory decisions or rely on outdated, irrelevant information.
To ensure compliance with state-specific regulations, employers should:
- Familiarize Themselves with Applicable Laws: Stay informed about the background search laws in the states where they operate.
- Consult Legal Experts: Seek guidance from legal professionals who specialize in employment law to navigate complex regulations.
- Partner with a Knowledgeable Provider: Use a background screening provider that is well-versed in state-specific compliance requirements.
Adhering to these rules not only protects employers from lawsuits and fines but also fosters a fair and equitable hiring process. By demonstrating a commitment to compliance and fairness, employers can build trust with potential employees and uphold their organization’s reputation.
5. Overlooking the Accuracy of the Information
A common mistake in the background screening process is neglecting to verify the accuracy of the information provided. Background searches are only as reliable as the data they rely on, and errors or outdated information can lead to wrongful decisions with significant consequences.
For instance:
Mismatched Criminal Records: A criminal record may be mistakenly associated with an individual who shares a similar name or identifying details, resulting in an incorrect report.
Incorrect Employment History: Errors in employment records may occur if outdated or incomplete data is used, such as listing incorrect employment dates or failing to reflect a candidate’s full work history. Employers must ensure that all data used in background searches is accurate, up-to-date, and directly pertains to the individual being evaluated. This can be achieved by:
- Cross-Referencing Information: Comparing data from multiple sources to identify inconsistencies.
- Third-Party Verification: Relying on reputable background screening providers to validate the information.
- Candidate Clarifications: When discrepancies arise, directly consulting with the candidate to resolve potential inaccuracies.
Failing to verify the accuracy of background search results can lead to hiring unsuitable candidates, violating an applicant’s rights, or exposing your company to legal liabilities and reputational damage. A meticulous verification process is essential for making informed hiring decisions and protecting your organization.
6. Not Considering the Context of Criminal Records
When evaluating criminal records during the hiring process, taking a blanket approach can lead to unjust discrimination or missed opportunities. A thoughtful review of the context surrounding an individual’s criminal history is essential for making fair and informed hiring decisions.
For example:
- Rehabilitation and Change: An applicant with a past felony conviction may have taken significant steps to turn their life around and could now be a strong candidate for the role.
- Relevance to the Position: A minor misdemeanor might have little to no bearing on the responsibilities of the job.
Employers should carefully consider:
- The Nature of the Offense: Was the crime a serious felony or a minor infraction?
- Time Since the Offense: How long ago did the incident occur, and has the individual demonstrated consistent, law-abiding behavior since then?
- Job Relevance: Does the nature of the crime directly relate to the responsibilities or risks associated with the position?
- Rehabilitation Efforts: Has the candidate shown evidence of reform, such as completing rehabilitation programs, acquiring new skills, or gaining positive references?
By taking these factors into account, employers can avoid relying solely on criminal records and instead focus on a balanced evaluation of the candidate’s current qualifications and character. A contextual approach ensures fairness, mitigates risks, and fosters an inclusive hiring process.
7. Failing to Follow Up on Red Flags
Background searches occasionally uncover red flags, such as gaps in employment history or discrepancies between a candidate’s resume and the information obtained during the screening process. Ignoring these issues or failing to seek clarification from the candidate can lead to poor hiring decisions and missed opportunities to fully understand the candidate’s background.
Addressing red flags with the candidate is critical before making any assumptions about unusual or inconsistent findings. For example:
- Employment Gaps: A significant gap in employment history may have various explanations, such as personal reasons, pursuing further education, caregiving responsibilities, or other valid circumstances.
- Discrepancies in Information: Differences between a candidate’s resume and background search results could stem from simple errors, outdated information, or misunderstandings.
Employers should follow these steps to handle red flags effectively:
- Engage the Candidate: Initiate a conversation to address any concerns and give the candidate an opportunity to explain.
- Verify Details: Cross-check the candidate’s explanation with available records or third-party sources to confirm accuracy.
- Evaluate Context: Consider the explanation’s relevance to the role and whether the concern affects the candidate’s suitability for the position.
Following up on red flags ensures hiring decisions are based on complete and accurate information, promotes fairness, and builds trust with potential employees. A proactive approach to addressing these issues can prevent misunderstandings and lead to better hiring outcomes.
8. Failing to Respect Privacy Laws
One of the most significant mistakes employers make during background screening is failing to comply with privacy laws and regulations. Candidates’ personal information is protected by a variety of laws, including the Fair Credit Reporting Act (FCRA). Employers are legally obligated to:
- Notify Candidates: Inform candidates that a background search is being conducted.
- Obtain Written Consent: Secure explicit written consent from the candidate before proceeding.
- Provide a Dispute Process: Allow candidates to dispute inaccuracies in the report and correct errors.
In addition, employers must ensure that information uncovered during background searches is not used in a discriminatory manner. For instance:
- Criminal History Use Restrictions: Many states and municipalities have laws, such as “ban the box” regulations, that limit how and when criminal history can be considered in hiring decisions.
- Fair Application of Results: Employers should only use background search results when they are relevant to the position’s responsibilities and requirements.
Failing to adhere to privacy laws can lead to:
- Legal Consequences: Employers may face lawsuits, fines, and other legal actions.
- Reputational Damage: Misuse of background search results can harm the company’s reputation, making it difficult to attract top talent.
To avoid these pitfalls, employers should:
- Stay Updated on Privacy Laws: Regularly review federal, state, and local regulations governing background searches.
- Train Staff on Compliance: Educate HR teams and hiring managers on how to handle personal data responsibly.
- Partner with Trusted Providers: Work with background screening providers that prioritize compliance and accuracy.
By respecting candidates’ privacy and rights, employers foster trust, maintain transparency, and minimize the risk of legal issues, creating a fair and professional hiring process.
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With Verification Screening Solutions, you can avoid costly mistakes in your background checks. We provide a comprehensive range of services to ensure your hiring decisions are informed, accurate, and legally compliant.
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Trust Verification Screening Solutions to help you make informed hiring decisions. Learn how our thorough screening services can enhance your hiring process, reduce risk, and ensure a safer, more reliable workplace.
FAQs
1. What Could Ruin a Background Check?
Several factors can negatively impact the results of a background check, including:
- Criminal Record: A history of criminal offenses may raise concerns, depending on the nature of the crimes and their relevance to the job.
- Employment or Education Discrepancies: Mismatches between the candidate’s claims and verified records can indicate dishonesty or errors.
- Inconsistent Personal Information: Inaccurate or incomplete personal details may complicate the screening process.
- Poor Credit History: For roles involving financial responsibilities, a poor credit report may be a red flag.
- False Statements on a Resume: Exaggerations or fabricated details on a resume can damage a candidate’s credibility.
- Failing Drug Tests: Positive results on a drug screening may disqualify candidates, particularly for safety-sensitive positions.
To avoid these issues, candidates should ensure all information they provide is accurate, complete, and truthful.
2. Are All Background Checks Accurate?
Background checks are not always 100% accurate. Errors can occur due to:
- Outdated or Incomplete Records: Information may not be updated regularly, leading to gaps or missing details.
- Data Errors: Incorrect data entry or mismatched records can cause inaccuracies.
- Discrepancies in Third-Party Reporting: Variations in how third-party services collect, interpret, or present data can impact accuracy.
To minimize errors, employers should partner with reputable background screening providers and verify critical information before making hiring decisions.
