Saturday, November 17, 2012

3 Critical Steps for Pre-Employment Background Checks

Selection and hiring may be the number one core competency in business today.  One essential part of that process is the pre-employment background check, a step many businesses skip.   You can't believe what shows up in background checks -- financial problems, credit problems and legal problems ranging from excessive traffic violations up to serious criminal activity.  

This is such an important topic, I asked a Chief Executive Boards International member Chuck Smith of for a guest article on this topic.  Here's what Chuck had to say:
Ronald Reagan was famous for saying “Trust, but verify” about arms-control treaties with the Soviet Union. The same can be said regarding pre-employment screening of job candidates.
Recently a client called to say that his firm needed to start the recruiting process for a staff accountant. About 18 months ago they had hired for the same position and I asked how that person was working out so far. Our client said it was one of the best hires he ever made… they loved her! “Unfortunately,” he said “she’s going to trial soon for felony theft of $26,000 from her previous employer. We’re probably going to have to replace her.”
Of course I immediately expressed sympathy for our client’s situation and then asked if he had done the background checks that we had recommended. “No,” he said. “I knew you were going to ask that! We were trying to save a few bucks."
This is an extremely common situation. After going through all the work and expense of identifying a great candidate, companies routinely skip the last steps:  background and reference checks. These checks typically cost $100 to $350 and the reports often come back clean. 
It is easy to see why one might skip this step: a good, clean report can seem like a waste of money; and, a report with negative information can derail the recruiting process, sending us back to square one. Additionally, there’s also no guarantee that proper due diligence will uncover every issue. For instance, if it the allegedly thieving staff accountant had no convictions on her record, then the criminal background check may come up empty.
However, what if the report was not clean? What if there was a history of criminal activity? Wouldn’t everyone be better off knowing? Now our client is in the awkward position of having to wait and see. Merely being arrested and charged may not necessarily be sufficient cause for termination. 
Here are 3 steps to take to make sure you don’t find yourself in an awkward position:
  1. Tell candidates that you are doing background checks and obtain their consent.  Ask them, at that moment, if there is any information that they would like to share before starting the checks
  2. On your official employment application, ask if they have ever been convicted of a felony
  3. Perform the checks and share the results with the candidate
As Reagan knew, knowledge is power. Employers who have obtained the available information about a candidate’s background are able to make an informed choice about whether or not to offer a candidate employment.

If you've had some interesting experiences with background checks or have some other suggestions to improve hiring processes, click "Comments" below and share them with others.     

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Terry Weaver

Chief Executive Boards International
Chief Executive Boards International: Freedom for business owners & CEOs -- Less Work, More Money, More Freedom to enjoy it


  1. Good post about the importance of background checks. More and more companies forget about background checks because of their costs, but one mistake like the one you described above could be a huge problem. Paying a little upfront and being sure is a lot safer than gambling without one.

  2. This is so nice since it gives me a lot of information aboutthe importance of background checks in choosing future employees.


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