Lessons for Small Business Background Checks

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For a small business, time is money, and there’s never enough of either. One of the most important yet arduous processes in the operation of a small business is the hiring process, and at no point is that more true than in the checking of potential employees’ references and backgrounds. Until recently, many employers decided to forgo this process altogether, because it was so time-consuming and tedious. What independent background check agencies did exist were more akin to private detective agencies and thus expensive and slow.

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The advent of the Internet and the proliferation of background check services have made background checks by employers very popular.  In fact, 92 percent of small business owners polled reported that they used come kind of background check service to vet potential employees.

With this widespread popularity and use of background checks have come many marketplace choices. Along with those choices have come increasing information, accuracy, efficiency, and also regulation and the proliferation of laws regarding employment-decision background checks.  Employers now face two potential problems: the potential legal liability from doing improper background checks, and the potential harm from doing incomplete or inaccurate ones. As long as you take the time to do your background checks correctly though, you shouldn’t have too much trouble.  Simply keep the following in mind:

  1. Customize your background check process to the specific job and type of employee.
  2. It is more important than ever to shop for the best provider. Not all background check agencies are created equal or do an equally good job.
  3. The laws are changing. Keep up to date with the laws in your state and be aware of what you can and cannot do. Also, familiarize yourself with current federal employment laws.
  4. Make sure that the decisions you make based the information you obtain from background checks are job-specific and non-discriminatory. Be objective in your hiring criteria.
  5. To avoid liability exposure, maintain strict confidentiality regarding the results of background checks.