News & Resources

Background checks provide good team performance

Mar 17, 2012 Philip Burgess

While newer laws now vary on a state-by-state basis on the use of consumer credit reports when hiring employees, background checks are becoming more prominent, and with good results. First Coast News reported that seven states have mandated against using a credit report as a deciding factor when companies take on new employees, though more look to do the same in the future. Lawmakers noted that bad credit can often be out of a potential employee's hands, such as when they are suddenly laid off or face unexpected medical fees. Should credit reports be a large factor in hiring, this could potentially segregate a whole group of people, the source said. The source noted, however, that sometimes looking into credit reports can be useful in protecting businesses from people who could turn to corporate fraud or embezzlement to help pay bills. recently released an infographic detailing the benefits of background checks, noting the staggering fact that there are over 13 million Americans currently on the job hunt, but 53 percent of job applicants list facts that are untrue on their resumes. The infographic showed the harsh realities of what could happen if a background check is not performed and a disreputable person is hired. For instance, workplace homicides average a total of 800 people per year, 13 percent of workers compensation claims are fraudulent and cost businesses a lot of money and theft by employees cost businesses $15.9 billion in 2008. Drug use, false qualifications, faked college degrees and lies about previous positions are other factors that have caused financial issues in businesses that have not performed background checks, explained. suggested a plan of action for businesses to take when screening new hires. They noted that it is a good practice to create a standard form that informs the applicant of a background check, use the services of a reputable background check provider and ensure a quick turnaround. A 2010 report from the Society of Human Resource Management cited by First Coast News found that only 9 percent of employers view good credit reports as an important thing to consider in the hiring process, instead choosing to focus on the interview, experience and skills. also recommended comparing an applicant, their expectations and the results from potential employees interviews to the actual job qualifications and requirements. This would then lower the occurrence of negligent hiring cases, which the source claimed could cost a firm up to $40 million.