4 Benefits of Background Checks in the Workplace

4 Benefits of Background Checks in the Workplace

What are the reasons for a background check by an employer? Is the purpose of the interview simply to verify a candidate’s qualifications, or are there other benefits? HireRight’s 2012 Employment Screening Benchmarking Report reveals the top four benefits that employers realize when performing background checks and how it adds value to their organization.

1. Increased Quality of Hire

Sixty-seven percent of survey respondents reported that background screening improved the quality of their hires. 70 percent of respondents have reported finding inaccurate information on resumes after conducting background check company. Further, respondents are finding misrepresentations more than once, with 74 percent saying they find misrepresented information up to 10 percent of the time.

The Society for Human Resource Management (SHRM) found in another study that job seekers with negative past experiences were most likely to falsify resumes.

If an applicant misrepresents their employment history, education, certifications, criminal history, or eligibility for employment, not only could this result in a poor hire, it could also pose financial, legal and regulatory risks to the hiring organization. A background screening program can help discover false or misrepresented information early on, preventing future risks and rising hiring costs.

2. Reduced Hiring Risks Due to Negligence

Twenty-nine percent of survey respondents said background checks help mitigate negligent hiring risks.

The problem of negligent hiring can arise, for example, when a worker causes harm to a coworker or third party while on the job, and the victim claims the worker had a history of or propensity for causing such harm that the employer should have discovered if it had conducted its “due diligence.”

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An employer may be held liable for negligent hiring damages if this allegation is proven.

It can cost a lot of money and damage a person’s reputation if a lawsuit is filed for negligent hiring. According to SHRM, the average settlement of a negligent hiring case is close to $1 million, but some cases have resulted in settlements in the tens of millions of dollars. Approximately 24 percent of Benchmarking Report survey respondents cite cost containment as one of their biggest challenges, which is why background screening may help to protect against negligent hiring claims.

3. Enhanced Regulatory Compliance

According to the Benchmarking Report, respondents ranked regulatory compliance as the second most important business challenge, and 44 percent said that background screening helped them achieve regulatory compliance.

Background screening companies that have compliance expertise in-house, as well as compliance tools built in, can help an organization to comply with industry standards and state and federal requirements, which can vary from state to state and position to position, which makes compliance a bit more complicated for employers.

An organization may face costly fines, loss of privileges, or legal damages without an effective employment screening program. The background screening provider can help you implement a compliant screening program at every step of the employment screening process, from background checks to completing an electronic Form I-9 employment eligibility verification.

4. Enhanced Workplace Safety

42 percent of survey respondents found background screening valuable because it helped increase workplace safety and security. Further, 16 percent of employers reported that screening reduced employee theft, 14 percent reported that it reduced workplace accidents, and 11 percent reported it reduced workplace violence.

The U.S. Chamber of Commerce and the American Management Association estimate that 30 percent of all business failures are caused by employee theft and that three quarters of employees steal at least once. Approximately 355,000 companies will experience workplace violence in any given year, according to a FBI study. Employers can conduct background checks to increase employee quality and protect their employees and properties from workplace accidents, violence, and theft.