Background Check Guide for Small Business Owners
Over the past decade, pre-employment background checks have become a standard risk management tool for American employers, both large and small. Fear of negligent hiring lawsuits, the need to comply with state and federal mandates, and the high cost associated with employee turnover have significantly increased the number of companies conducting pre-employment assessments.
For smaller companies without compliance and/or risk management departments, developing and launching a pre-employment background check program can be confusing. There are many things to consider:
o Documentation of policies
o Different types of background searches
o State or federal legislative mandates
or Internal vs. outsourcing
o Choose a background check provider
o Supervise the process
This article is intended to provide small businesses with an overview of pre-employment background check guidelines.
Documentation of your background check program
Before implementing a background check program, an employer must ensure that the pre-employment screening becomes part of any written policy or procedure already in place. Decisions must be made regarding which (if not all) positions will be evaluated and which searches will be conducted for applicants applying for those positions. Written policies and procedures are important to maintain consistency so that all applicants for a given position are considered in the same way.
At this stage, it may also be helpful to consult with legal counsel about what information can legally be used to make a hiring decision. You will want to consider what specific requirements may already exist for your particular industry. Chat with similar business owners and find out which types of background checks have been most helpful and how they implemented their programs. Colleagues can often be an invaluable resource. Keep in mind that you may want to develop several different packages, depending on the types of roles your company fills.
at home vs. Outsourcing Your Background Checks
Once an employer has decided what the pre-employment screening program will consist of, it is important to sit down and determine if it makes sense to process most searches in-house or if this is something that needs to be outsourced. There are many aspects of a background check that can be performed in-house, such as education and employment checks and reference checks. Terrorist watch lists, federal sanctions lists, and sex offender registries are also available to the general public. However, with ever-changing federal and state contracting laws, many smaller businesses may not have the time or staff to dedicate to conducting these searches, as well as keeping up with the Fair Credit Reporting Act and what information can be accessed or not in each state.
The cost of outsourcing is certainly a consideration. Any employer conducting background checks internally will need to dedicate staff time and resources to the physical management of the process, including computers and a software solution to manage and track all applicants being screened.
They will also need to dedicate staff and resources to stay current and aware of evolving state and federal laws in all jurisdictions in which they operate. This includes compliance with the FCRA, as well as compliance with any applicable state data collection and storage, privacy, and/or contracting laws. On the other hand, a typical report from an outside vetting firm should cost less than a new hire’s first day’s salary. When compared to the cost of a bad hirethis is an extremely minimal investment.
How to Choose a Background Investigation Company
Because there are so many background check companies to choose from these days, an employer must consider several things before making a decision. First, smaller companies need to look for a professional partner, not just an information provider selling data at the lowest price. Second, while cost is always a consideration, employers must ensure that the company selected is capable, experienced, knowledgeable, and reputable, as well as reasonably priced.
Above all, an employer wants to be sure that they are dealing with a vetting company of integrity. A review of the potential supplier’s website and materials, as well as contacting current clients for professional references, should help establish the company’s qualifications. Lastly, an employer must confirm that their potential vetting partner is a member of the National Association of Professional Background Checkers (NAPBS). Membership in this organization demonstrates a commitment to professionalism and an industry-wide code of conduct.