Why background checks are important when hiring employees

“What you don’t know can’t hurt you”. You must have heard of this age-old adage. But it doesn’t ring true when you are recruiting people for your company because that’s when “what you don’t know CAN hurt you”. According to U.S. Chamber of Commerce (DOC) employee theft is one of the reasons for failure in many companies. Even in the early 1990s, about one in every five small businesses fell prey to employee theft, which eventually leads to business failure. So your business cannot afford to skip this important procedure of conducting background checks before hiring employees. It is pretty inexpensive too, so why take the risk? People can claim to be anything on their resume, but can they really pull it off? If you judge people by their resumes, you will never be able to hire anyone, because they all look exceptionally good. So how would it be if you neglect to conduct background checks?

Once the resume of a probable candidate is received, most employees become pretty impressed by what they see. They forget or neglect to check the background of the prospective employee. Even if it is a bit time consuming, don’t give up on it. The more careless the employer becomes, the more the chances of misinterpretations and negligent hiring.

Things included in background check

Background check – the term is certainly vast, so you must be aware of what should be included in background and what not to be. Of course, it also depends on the nature of job, but in this scenario, we will think about an employer who is looking to hire in the IT department. The main things included in the background check would consist of, but not limited to

  • Education records
  • Credit records
  • Drug test records
  • Past employers
  • Personal references
  • Social security number
  • Sex offender lists
  • Character reference
  • Court records

Some employers hesitate to delve deeper into background checks because they fear lawsuits. While some questions can indeed lead to lawsuits, the U.S Supreme Court has issued that reasonable background checks can be conducted while screening employees. In short, if any employee wishes to slap a lawsuit for asking personal questions, he cannot do so, provided you do it within limits.

Getting involved in negligent hiring lawsuit

You could be slapped with lawsuit for negligent hiring if the employee you hired is incompetent, unfit or brings harm to fellow employees and customers. Make yourself familiar with the particulars of negligent hiring because you never know what problems you could go through if an employee of yours harms a customer physically or abuses a colleague. Here are some things that could constitute negligent hiring of an unfit employee

  • The relationship between the employee and the employer
  • The employer’s knowledge of the employee’s ‘unfitness’
  • Third party injuries caused due to employer’s act of omission

Background checks can take up any form, right from consulting with references to checking the criminal records of people to know if they have a jail record. Negligent hiring can be extremely costly to the employer.

When you are slapped with negligent hiring lawsuit, the best thing to do would be to hire an attorney. You must also do this well in advance because you have sufficient time to file an answer and get the papers ready to fight the claim.

Hence, as a recruiter there is no doubt that you have to do a background check because you can be held liable if you don’t. If you are hiring someone, you should know that he is fit for the job.

Employee references

Get in touch with former employees to know about an employee you are considering to hire. The former employee would be in a better position to tell you the behavior and character of the employee. You can cross check the following information with him

  • Nature of job performed at his company
  • Pay
  • Employment tenure
  • Job title
  • Work habits

Certain employers are afraid of divulging the information and they just give out the name, job title and serial number. That’s it. Period. But in such cases, you can convince the employer that such information can be “qualifiedly privileged”. It means that the employer will not be sued (by the former employee) for divulging information because this information is protected and you are obliged to keep this shared information with you unless another employer asks for it.


Before wrapping up the topic, keep these pointers in mind

  • Two main ways in which you can do background checking
  1. Writing
    Sometimes, there will be out-of-area references in your employee’s resume. You can check the facts by writing to such references and this can later turn out to be strong references that may prove your point should you later need to show proof. Granted that writing is a time consuming method, but some employers actually do not respond unless they get a written request.
  2. Calling
    As this is a quick method, many employers prefer to call their prospective employee’s references. There is another advantage to calling. What people hesitate to put in writing can be conveyed over the phone.
  • While checking for personal references, understand that

If an applicant cannot name a few references even if he was living in a particular area for a certain length, then the right flag in your mind should rise. Personal references are usually friends and family, so make sure you get full light on the person’s character with reference to work.

Interesting links about the topic:

The Importance of Conducting Background Checks in IT Recruitment
How Important are Employment Background Checks?

Pictures: Flickr.com/ Bellucci/ Braun/ Potter/ Pitkin

The author: Reema Oamkumar is engaged as a thought leader at Software-Developer-India.com which is a part of the YUHIRO Group. YUHIRO is a German-Indian enterprise which provides programmers to IT companies, agencies and IT departments.

1 Comment
  1. It really helped when you said that it would be a great idea to call up previous employers to verify details that were provided by an employee. My aunt owns a warehouse and she is in constant need of hired help. I don’t want her to fall prey to unqualified applicants who can potentially cause harm to her and her business, so I’d be sure to encourage her to get process service for her background checking needs. Thanks for the informative read!

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