If you’re looking to fill an open role at your small business, finding candidates can be easy. But are they the right candidate? That’s a little trickier. You can go through the interview process, meet them, and conduct skills tests, but that doesn’t always tell you the whole story about their past history.
Conducting a background check on your candidates is an easy way to get a full story on a candidate before you extend them a job offer. Here’s everything you’ll need to know about conducting a pre-employment background check.
What is a background check for employment?
A background check for employment is a screening tool that employers use to identify if a candidate’s past history is accurate. It surfaces any issues from the past that might affect their performance in the role they’re applying for. Conducting a background check before employing a candidate isn’t mandatory, however, it can protect small business owners from potential risk.
8 types of background checks
There are many different types of background checks employers can run on a potential candidate. The type of check employers should conduct is dependent on the role they’re hiring for and the company policy already set in place.
Here are a few examples of different types of background checks an employer can conduct.
1. Pre-employment criminal background check
A criminal background check is a background check that screens public records to see if a candidate has any sort of criminal background. A criminal background check can include things like court orders, arrests, any record of incarceration, and felony or misdemeanor convictions.
Depending on where you’re located, criminal background checks are only allowed to go back a certain number of years. For example, it’s illegal to search for criminal records beyond the past seven years in the state of California. When you’re conducting pre-employment background checks, be sure to stay compliant with local and federal laws like these.
2. Pre-employment credit check
A pre-employment credit check is when an employer runs a full credit check before a candidate is hired. This type of background check isn’t as common, as most employers don’t need to know a candidate’s previous financial history before employing them. However, it’s common for candidates to receive a credit check if they’re applying to more finance specific roles, such as in banking.
It’s important to note that a pre-employment credit check doesn’t include the candidate’s actual credit score. This information is private to the candidate and should never be used for consideration for employment.
3. Pre-employment MVR check
A motor vehicle record (MVR) check is a record of an individual’s past driving history. It’s most commonly requested by potential employers and might be one part of the entire background check process. If you’re looking to hire somebody who operates a moving vehicle as part of your business, it’s best to implement an MVR check as part of the background check process.
A MVR record includes important driving information such as an individual’s date of birth, driver’s license number, any license suspensions or traffic citations, DUI convictions, and accident reports.
4. Pre-employment medical check-up
A pre-employment physical is a standard medical exam employers require before a candidate starts a new job. Don’t confuse this with a human performance evaluation (HPE), which evaluates more specific physical skills a candidate might experience in the role. For example, a candidate might have to go through a HPE if their job requires much more physical labor or specific type of physical dexterity. A firefighter would be a good example of a someone who should take a HPE before being hired.
Pre-employment physicals are more to evaluate the general health of an employee. These aren’t as common anymore as an individual’s health records, since this can be a violation of the Health Insurance Portability and Accountability Act (HIPAA). Employers may opt not to conduct a pre-employment medical checkup because they don’t want to run into issues regarding discrimination. Some candidates also might not want to disclose certain disabilities or health issues if they’re concerned about employer discrimination.
5. Pre-employment drug screening
Drug testing in the workplace has gotten more complicated in recent years due to the legalization of marijuana in some states and privacy laws surrounding HIPAA. However, it could be a necessary part of a background check for roles that require operation of heavy machinery or moving vehicles. In some instances, it might even be required by insurance providers to help minimize the amount of risk a business can run into.
If you plan to implement a pre-employment drug screening, it’s important to implement a consistent policy to ensure that there’s no possibility of discrimination when it comes to completing a drug test.
6. Social media check
A study by The Harris Poll finds that almost 71% of US hiring decision makers agree that checking out a candidate’s social media profile is an effective way to screen applicants. Social media screening is a much more common practice, but isn’t necessarily part of an official background check. The most common way employers conduct a social media check is by doing an unofficial search for the candidate on common social media sites to see what information is readily available to the public.
7. Education verification
An education verification check confirms the validity of a candidate’s academic history listed on their resume or application. This is a common part of a standard background check to ensure that a candidate has any credentials that are necessary as part of a job listing. For example, if a prep chef lists that they went to culinary school on their resume, an employer can add an education verification to see if their certificate or degree is completed.
8. Employment verification
An employment verification is similar to an education verification. This confirms the validity of whether or not a candidate was previously employed at the roles they say they were employed at. Employment verification is a pretty simple process and doesn’t require any major background check programs or software—a simple call or email to the previous employer is usually sufficient enough.
Another way to ensure verification is to conduct reference checks with previous managers. This is also a much more informal way to verify employment, but can still be used to verify any experiences or skills stated on a candidate’s resume.
Pros and cons of conducting a background check for employment
Conducting background checks takes time, some investment, and careful consideration for what you’re looking for in a candidate. While the outcomes are beneficial, there are some things to consider to prevent any issues.
Pros of conducting a background check
- Maintain compliance with local laws and regulations: Conducting a pre-employment background check can help ensure that everybody you hire is compliant with local laws and regulations. You wouldn’t want to hire an esthetician that doesn’t have the proper certifications or training, and background checks can help verify that information.
- Minimize risk and liability: Completing a background check on a candidate can be considered an employer’s due diligence for minimizing any liability. If an issue comes up in the future, you can provide proof that you did your research to screen for issues before the problem happened.
- Verify qualifications and avoid costly hiring mistakes: Employers can receive hefty consequences if employees falsify credentials or experience. That can lead to hefty fines or even a business closing. Conducting a background check helps to verify certifications and experiences stated on a candidate’s resume so you can avoid getting into hot water.
Cons of conducting a background check
- Background checks can be expensive: If you’re an extremely small business, conducting a background check might not be in the cards—or the budget. If this is an issue, most aspects of a background check can be conducted individually, it just takes more time and effort to do so.
- Legal issues if not conducted correctly: If your company conducts a background check incorrectly or doesn’t have a standardized background check policy in place, you could be at risk for discrimination lawsuits. When implementing background checks, it’s important to conduct them fairly and without breaching a candidate’s right to privacy.
- Slows down the hiring process: Compiling all of the information in a background check takes time. The last thing you want is to lose a candidate just because the process was taking too long. Discuss with your candidate when you’ll start the process for the check, and give them an accurate timeline for how long it will take. That way, your candidate can at least plan for a response.
What does a background check include?
Depending on how you source your background checks, what you include is dependent on how the check is initiated. For the most part, employers can pick and choose what information they want to include in a pre-employment background check.
The most common aspects of a background check include a criminal background check, employment verification, education verification, and a drug screening check. However, it’s up to you as an employer to decide what to include in your hiring process.
What should an employer look for in a background check?
Background checks are a tool to verify a candidate’s identity. However, background checks can uncover information about a candidate that you might not receive through the interview process. Here are some things you should look out for.
- Verification of certificates or experience on candidate’s resume: If a background check confirms all of the information on a candidate’s application or resume, that’s a good sign! Especially if they have specialized certifications that fit the needs of your business.
- Clean driving records, drug tests, and criminal history: No bad marks on a candidate’s records? You don’t have to worry about going into any further discussions with this candidate regarding their past.
- Positive references from past employers: You want the person that you hire to have a good track record with previous employers, regardless of how they left their previous role. Positive references from past employers or other coworkers are a great way to see if they’ll fit in with your current team.
- Any professional awards or recognitions: If you see a candidate lists any professional awards or recognitions, verify this information. Hiring someone with these awards could lead to positive brand recognition and good press for your small business.
- Discrepancies of information on a candidate’s experience or resume: If a background check highlights some discrepancies, this may be cause for concern. This might require some additional research, or an another interview with the candidate to address these concerns.
- History of workplace issues: Conducting a reference check with past employers helps bring up any past issues—but that doesn’t mean you’ll like what you find.
- Inconsistent employment history: While inconsistent employment history alone isn’t enough to cause major concern, this combined with other bad signs can be. Cross reference with past employers to create a more clear story of a candidate’s employment history.
- Criminal history: If a candidate has past criminal history, it’s important to consider how long ago it took place, the context of the crime they were charged for, and how it might affect the job they’re applying for. However, employers do have the right to refuse employment if they find criminal history on a candidate’s record.
How to conduct a pre-employment background check
Conducting a pre-employment background check is fairly simple once you establish the groundwork. Here are five simple steps to implementing a pre-employment background check.
Step 1) Implement a background check policy
The first step of implementing a background check is to establish a background check policy within your employee handbook. This should include who receives a background check, what information you’re looking for, and when during the interview process this background check occurs.
When implementing this policy, it’s important to retroactively run background checks for your existing employees. That ensures everybody receives fair treatment. This also minimizes the risk of discriminating against specific candidates and provides everybody the same opportunity.
Step 2) Identify the needs of the specific role
Some roles may require specific types of background checks over others. Looking to hire delivery drivers? You may want to include a MVR check along with a standard background check. If you do choose to provide special checks for different roles, that’s okay. Just be sure to outline those differences clearly within your background check policy. And of course, clearly communicate this with your candidate.
Step 3) Find the right service to conduct the background check
After identifying your specific needs for the role, find different background check services that specifically check for those needs. There are hundreds of different third-party background check services that you can use for your hiring process. The best ones are the services that can sync with your hiring platform so you can streamline your process and ensure everything is securely stored in one place.
Step 4) Alert your candidate of the background check
Conducting a background check without alerting the candidate is against the law depending on where you’re located. Be sure to provide your candidates with written consent before beginning the actual process. This helps document that both parties did their due diligence before the check was enacted and minimizes any risk your business might receive for conducting a check.
Step 5) Review results with candidate
If you don’t find any red flags within the background check, that’s great! Reviewing the results with your potential hire might not be the best use of your time in that case. However, your candidates should have the opportunity to contest any information within the background check. Provide your candidates with the option to receive a copy of their results for their records, so they have the ability to ensure their report is as factual as possible.
Streamline your hiring process and stay compliant
Get Homebase to help track hours, calculate overtime, and store important information. You can rest easy knowing you’re covered on federal, state, and city compliance rules. Looking for someone to help establish your background check process? Get advice from Homebase HR pros to help customize your hiring and compliance policies.
Background check for employment FAQs
How long does a pre-employment background check take?
The average criminal background check takes about 1-3 business days to complete. If you’re looking for more in-depth background checks, such as a federal background check, that can take up to two weeks.
As an employer, you should try to keep the background check process as short as possible to minimize the amount of time it takes to hire a candidate. You don’t want to lose a candidate simply because the process took too long.
How much does a background check for employment cost?
Background check prices vary depending on what information you’re looking for on a candidate. A very basic background check can be as affordable as $10, but increases as you add more information onto the check.
Are background checks for employment legal?
Yes, background checks for employment are legal. Many employers use background checks as a regular part of their hiring process to help minimize the amount of risk they expose themselves to. However, employers need to create a fair hiring process for candidates and requiring a background check for one candidate and not another could be considered discrimination.