Employment background screening is a small business’ first line of defense to help mitigate hiring risks such as poor quality of hires, potential employment claims and compliance hazards. While these risks might hurt a larger business, they could effectively jeopardize the smaller business’ entire future.
With the right employment background screening program in place, a small organization can help to defend itself against these hiring risks. To better understand how small businesses are leveraging background screening to reduce these risks, HireRight developed the Small Business Spotlight Report, a survey of more than 600 small businesses, to uncover their common screening practices.
Below, we’ll share some of the findings from the Small Business Spotlight report, including the top four questions small businesses should ask themselves about their own background screening program.
1. What are small businesses currently doing to reduce employment risk?
Eighty-eight percent of respondents said they use some type of background check prior to hiring an applicant.
Of those organizations that conduct background checks:
- 88 percent conduct criminal record checks
- 59 percent confirm identity
- 47 percent search motor vehicle records
- 46 percent verify employment history
- 31 percent verify education history
These types of background checks can help to identify incidences of falsified information and eliminate applicants with a history of negligent or criminal behavior.
2. How often does a background check uncover potentially negative information?
Confirming the importance of background checks, 45 percent of respondents stated that they discovered false or misrepresented information during the hiring process. Fifty five percent of the respondents also said that background checks have saved them from making a potentially bad hire.
One in five respondents say they have experienced a negative incident that could have been prevented by background screening or know someone who has. Of the respondents currently using drug and alcohol screening, 49 percent have had a person test positive for banned substances.
3. Which background screening changes are small businesses planning to make in 2012?
Many small businesses have plans to evaluate and improve their background screening practices in 2012. Eighteen percent of respondents will implement a background checking program and 44 percent will review their existing background screening standards within a year.
Twenty-nine percent of respondents said they will create a written policy for background checking. Another 19 percent of small businesses responded that they plan to create a drug and alcohol or health screening policy by next year and 13 percent plan to implement a drug, alcohol or health screening program. Finally, 15 percent of small businesses stated that they are going to review their background screening standards for contingent workers.
4. What best practices can help small businesses better mitigate hiring risks?
- Create a Policy
Behind every successful background screening program is a well thought-out employment background screening policy. A written background screening policy helps a business to set and fulfill certain standards.A policy also provides protection against the risk of future discrimination claims against the business.If the business can show that it follows a consistent employment screening policy, this can help provide a defense during potentially costly discrimination claims.
- Automation and Comprehensive Employment Background Checks
More small businesses are turning towards on-demand employment background screening solutions, which allow them to save time and conduct more extensive background checks.An on-demand background checking program that includes criminal record history, sex offender results, motor vehicle records history, educational verification and credit history when applicable, can help small businesses to better mitigate the risks of negligent hires which may result in theft, fraud, safety, compliance or legal risks.
- Regularly Re-Asses
Organizations should consider self-auditing their background screening programs no less than annually. Use your background screening policy as a roadmap to evaluate how well you’ve accomplished your screening goals. Work with your background screening solution provider to build in the background checks and regulatory compliance that will best protect your organization going forward.
Is your business prepared to mitigate hiring risks?
If you’d like to learn more about the best practices in background checks and be able to benchmark your organization against other small businesses like yours, then take a look at the latest data from our 2016 Small Business Spotlight Report.
Download: The 2016 Small Business Spotlight Report
2016 Small Business Spotlight Report
Best practices and trends in background checks for small businesses.