5 Essential Steps for Conducting Employment Background Checks

When you're looking to fill an open position at your small business, finding candidates can be easy. But are they the right candidates? That's a little trickier. You can conduct interviews, meet with them, and take skills tests, but that doesn't always reveal how well they will manage company assets and resources. Ensuring the right fit requires a deeper understanding of their history and capabilities.

Implementing effective document management for your applicants is an easy way to get a full picture of a candidate before you make them a job offer. Here's everything you need to know about organizing and managing applicant documentation during the hiring process.

8 Types of Background Checks

There are many different types of background checks employers can run on a potential candidate. The type of check an employer should run depends on the role they're hiring a candidate for and the company policies they already have in place.

Here are some examples of different types of background checks an employer can run.

1.Pre-employment Criminal Background Check

A criminal background check is the process of reviewing public records to see if an applicant has a criminal past. A criminal background check can include things like court orders, arrests, incarceration records, and felony or misdemeanor convictions.

Depending on where you are located, criminal background checks can only go back a certain number of years. In the state of California, for example, it is illegal to search for criminal records that are more than seven years old. When conducting pre-employment background checks, make sure you comply with local and federal laws like these.

2.Pre-employment credit check

Recruitment management involves streamlining the hiring process to ensure you find the best candidates for your organization. This often includes conducting various checks, though not every check is necessary for all roles. For example, while many employers don't typically delve into an applicant's financial history, it becomes essential in finance-specific jobs, such as banking, to ensure candidates meet specific industry standards.

It is important to know that a pre-employment credit check does not include the applicant's actual credit score. This information is for the applicant only and should never be considered for employment.

3.Pre-Employment MVR Check

A motor vehicle record (MVR) check is a record of an individual's past driving history. It is most commonly requested by prospective employers and may be a part of the overall background check process. If you are looking to hire someone to drive a vehicle for your company, you should conduct an MVR check as part of the background check.

An MVR record contains important information about driving history, such as an individual's date of birth, driver's license number, any license suspensions or traffic citations, drunk driving convictions, and accident reports.

4.Pre-Employment Medical Check-Up

A pre-employment medical check-up is a standard screening that employers require before an applicant starts a new job. It is not to be confused with a Human Performance Evaluation (HPE), which evaluates more specific physical abilities that an applicant may need for the job. For example, an applicant may be required to undergo a HPE if their job requires a lot of physical labor or a certain type of physical dexterity. A firefighter would be a good example of someone who should undergo a HPE before being hired.

Pre-employment medical exams are more about assessing an employee's overall health. They are no longer as common as recording an individual's health information, as this can be a violation of the Health Insurance Portability and Accountability Act (HIPAA). Employers may choose not to require a pre-employment medical exam because they do not want to have issues with discrimination. Some applicants also do not want to disclose certain disabilities or health issues if they fear discrimination by the employer.

5.Pre-employment drug screening

Workplace drug testing has become more complicated in recent years due to the legalization of marijuana in some states and privacy laws surrounding HIPAA. However, it can be a necessary part of a background check for positions that require operating heavy machinery or moving vehicles. In some cases, it may even be required by insurance companies to minimize risk to a company.

If you plan to conduct a pre-employment drug screening, it's important to implement a consistent policy to ensure there is no possibility of discrimination when it comes to administering a drug test.

A study by The Harris Poll shows that nearly 71% of decision makers in the U.S. believe that checking a candidate's social media profile is an effective method of screening applicants. Social media screening is a common practice, but it's not necessarily part of an official background check. The most common way employers conduct a social media verification is an unofficial search for the applicant on popular social media sites to see what information is available to the public.

7.Education Verification

An education verification confirms the validity of an applicant's academic history listed on their resume or application. This is a common part of a standard background check to ensure an applicant has all the credentials required under a job opening. For example, if a chef states on their resume that they attended culinary school, an employer may add an education verification to see if the certificate or degree is completed.

8.Employment Verification

Employment verification is similar to education verification. It confirms whether or not an applicant has previously been employed in the position they are claiming. Employment verification is a fairly simple process and does not require major background check programs or software - a simple phone call or email to the previous employer is usually sufficient.

Another way to verify is to conduct reference checks on previous supervisors. This is also a more informal way to verify employment, but can still be used to verify the experience or skills listed on the applicant's resume.

Pros and Cons of Conducting a Background Check Upon Hiring

Conducting background checks takes time, some investment, and careful consideration of the requirements you want to have in an applicant. While the results are beneficial, there are a few things to keep in mind to avoid problems.

Benefits of Conducting a Background Check

Comply with Local Laws and Regulations: Conducting a background check before hiring can help ensure that anyone you hire is compliant with local laws and regulations. You don't want to hire an esthetician who doesn't have the appropriate certifications or training, and background checks can help you verify this information.
Minimize Risk and Liability: Conducting a background check on an applicant can be considered due diligence on the employer's part to minimize any liability. If a problem arises in the future, you can show that you did your research before the problem arose.
Check qualifications and avoid costly hiring mistakes: Employers can face severe consequences if employees falsify credentials or experience. This can lead to hefty fines or even closure of the company. Conducting a background check helps verify the credentials and experience listed on a candidate's resume so you don't get into hot water.

What does a background check include?

Depending on where you get your background checks from, what it includes will depend on how the check is initiated. In most cases, employers can decide for themselves 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, an employment check, an education check, and a drug use check. However, it's up to you as an employer to decide what you want to include in your hiring process.

What should an employer look for in a background check?

Background checks are a tool for verifying a candidate's identity. However, they can also uncover information about a candidate that you might not get in an interview. Here are some things to look for.

The Good

Checking credentials or experience on the 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 the applicant has specific credentials that meet your company's needs.
Clean record, drug tests, and criminal history: No bad entries on an applicant's record? Then you don't need to worry about having further conversations with that applicant about their past.
Positive references from previous employers: You want the person you're hiring to have a good track record with previous employers, regardless of how they left their previous job. Positive references from previous employers or other employees are a great way to determine if the person will fit into your current team.
Any professional awards or recognitions: If you see an applicant listing any professional awards or recognitions, check that information. Hiring someone with such awards could result in positive brand awareness and good press for your small business.

The bad

Inconsistencies in an applicant's work experience or resume information: If a background check finds inconsistencies, that can be a cause for concern. This might require additional research or another conversation with the applicant to address those concerns.
Past workplace issues: Checking references with previous employers helps uncover past issues - but that doesn't mean you'll like what you find.
Inconsistent employment: While an inconsistent employment history alone isn't a cause for concern, it can be a cause for concern when combined with other bad signs. Compare with previous employers to get a more accurate picture of an applicant's employment history.
Criminal history: If an applicant has a criminal record, it's important to know how long ago it occurred, the context in which the crime was committed, and how it might impact the job they're applying for. However, employers have the right to refuse employment if they find criminal records on an applicant's record.

What is a background check for employment?

An employment background check is a screening tool that employers use to determine if an applicant's background is accurate, uncovering any past issues that could affect the applicant's performance in the position they're seeking. Conducting a background check before hiring an applicant isn't mandatory, but it can protect small business owners from potential risks.

How to Conduct a Background Check for Employment?

Conducting a pre-employment background check is relatively easy if you lay the groundwork. Below are five simple steps to conducting a pre-employment background check.

Step 1) Establish a background check policy

The first step in implementing a background check is to establish a background check policy in your employee handbook. This should specify who will receive a background check, what information you are looking for, and when that check will take place during the application process.

When implementing this policy, it is important that you conduct retroactive background checks for your existing employees. This will ensure that everyone is treated fairly. This also minimizes the risk of discriminating against certain applicants and provides everyone with an equal opportunity.

Step 2) Determine the requirements of each role

For some roles, certain types of background checks are more important than others. Are you looking to hire delivery drivers? You may want to conduct an MVR check in addition to a standard background check. If you choose to offer special checks for different roles, that's fine. Just make sure you clearly outline these differences in your background check policies. And of course, you should communicate this clearly to your applicant.

Step 3) Find the right service to conduct the background check

After you've determined your specific requirements for the role, look for different background screening services that specifically address those needs. There are hundreds of different third-party providers you can use for your hiring process. The best ones are those that can sync with your hiring platform so you can streamline your process and ensure everything is stored securely in one place.

Step 4) Inform your candidate about the background check

Running a background check without notifying the candidate is prohibited by law depending on the country you operate in. Make sure you provide your candidates with written consent before you begin the actual process. This will document that both parties have done their due diligence prior to the check and minimize any risk your company may face by conducting a check.

Step 5) Review the results with the candidate

If you find nothing unusual during the background screening process, great! Discussing the results with your prospective employee may not be the best use of your time in this case. However, your applicants should have the opportunity to dispute any information from the background check. Offer your applicants the opportunity to receive a copy of the results for their records so they can ensure their report is as factual as possible.

Implementing a thorough pre-employment background check process is essential for making informed hiring decisions. Using tools like IceHrm can streamline the process, ensuring you efficiently manage applicant information and compliance. Start today to safeguard your small business and build a reliable team.