What is a Background Check?
A background check verifies a person’s identity by taking a comprehensive look at their employment, criminal, financial, and educational histories. Most companies perform background checks as part of the pre-employment screening process, but you can conduct the check at any point, even after an employee is onboarded.
Most businesses trust that employees are honest and forthright in their résumé, but verifying the information is complete and correct is essential. You also want to be aware of any issues that could compromise the safety or integrity of the workplace when bringing in someone new.
Background checks have become a standard practice at most businesses. They are legally required in some industries, such as childcare.
To perform a background check, employers must obtain the following:
- The employee’s full legal name.
- Date of birth.
- Physical address.
- Social security number.
In most cases, you also need the applicant or employee’s consent, typically by signing an authorization form. However, there are some exceptions.
What are the benefits of employee Background Checks?
There are multiple benefits to conducting background checks on new employees. Here are the top reasons it has become a standard human resources (HR) practice.
Help Protect Workplace Safety
One of the primary reasons businesses conduct employee background checks is to screen out potentially dangerous employees. According to a U.S. Department of Justice survey, workplace violence results in a loss of 1.75 million workdays and $55 million each year.
Criminal background checks identify any previous violent criminal activity to help avoid hiring someone who may become a threat in the workplace. It gives you and your other employees peace of mind when bringing in a new person.
Many background checks also include drug screenings to determine if a potential new hire – or existing employee – has used illegal drugs in the past few days. While protecting all workplaces is important, these background checks are vital when hiring someone to work with children or other vulnerable populations.
Reduce Your Liability
A business owner could be liable if they fail to run a background check on an employee with a criminal past, and that employee goes on to commit an act of violence in the workplace. In addition, many insurance companies require drug screenings to reduce the chances of an employee-caused accident. This is particularly true in jobs where an employee handles dangerous machinery.
Hiring Top Candidates
Employee background checks also reveal a lot about a person’s work history and habits. It can verify the information provided in the résumé or application is true and accurate. That includes places of employment, dates, and the listed skills, certificates, or licenses.
Job candidates sometimes exaggerate or hide aspects of their employment history. It’s also possible a candidate lists friends or family members as references rather than former employers. Background checks provide a full and accurate picture of where they worked, for how long, and their primary supervisors.
Protect Your Brand
Your employees represent you and your business. They are often the voices and faces of your brand.
Hiring employees who don’t understand and respect that responsibility could open you up to the devaluation of your company’s brand identity. In particular, employees with a history of inflammatory remarks in public or on social media could be detrimental to the brand.
Promote a Positive Workplace Culture
Your employees will feel safer and know that new hires can be trusted to perform quality work because they know the new hire passed the background screening process. It promotes an air of security and team-togetherness that can help foster a positive and empowering workplace culture.
What are the drawbacks of employee Background Checks?
While employee background screening is the standard of modern business, it does have some disadvantages. Here are the primary concerns with conducting background checks.
Costly & Time-Consuming
The costs of an employee background check can run anywhere from $30 to several hundred dollars. There are many costs associated with hiring new employees and running background checks adds to those risks.
It can also take time to compile the paperwork, ensure accuracy, and submit the background check request. Depending on the company, it can also take several days to get the results back. Those delays can be an issue when you have an urgent work need and are trying to fill a position ASAP.
Legal Compliance Concerns
Every state has different laws and regulations regarding employment background checks. They aim to give employers the tools needed to verify job candidates but also seek to protect individuals going through the application and hiring process.
The laws are also constantly changing. Many dictate what information an employer can access and how that information can be applied. In most cases, employers are legally responsible for ensuring privacy and data protection around employment screening results.
For employers that use a third-party service for background checks, the Fair Credit Reporting Act (FCRA) controls what types of information the service can provide and how the employer can use that information.
FCRA also requires employers to notify job candidates and get their consent for the background check. Suppose the results of a background check make you decide to take an adverse action (rescinding a job offer, termination, relocation, demotion, etc.). In that case, you must provide the employee with a copy of the report and a summary of their rights under FCRA.
The advance notice gives the employee or job candidate a chance to challenge information in the report. Once the adverse action is taken, the employer must notify the employee in writing, electronically, or verbally.
Doesn’t Give a Complete Picture & Can Cause Unfair Bias
A background check might include a criminal record, but it won’t necessarily include what steps an individual took toward rehabilitation and self-improvement. Just because a candidate has prior conviction doesn’t automatically mean they’re a workplace violence risk or unqualified for the position.
Working with the Wrong Background Service
Any third-party background service you use should be FCRA-compliant and trustworthy. Background screening services offering free reports, instant results, or other “too good to be true” promises risk providing outdated, erroneous, or inaccurate information.
Making hiring decisions based on incomplete or inaccurate information from an unreliable company can cause you to miss out on high-quality employees. It can also open your company to potential lawsuit liability.
Employee Background Check Pros and Cons
Here’s a quick summary of the benefits and drawbacks of employee background screening.
- It’s a standard hiring practice.
- Helps ensure a safe and healthy workplace.
- Reduces your liability.
- Protects your brand.
- Promotes a positive workplace culture.
- Costly and time-consuming process.
- Difficulty in ensuring FCRA compliance.
- Doesn’t give a complete picture & can cause unfair bias.
- Working with the wrong background check company can cause issues with reporting.
What are the Best Background Check Companies?
Here’s our list of the top 10 best background screening companies.
GoodHire provides a convenient online portal for employers to conduct pre-employment screening. It’s well known for its easy-to-use interface and excellent customer service.
The California-based firm offers three preset search packages, which range in price from $29.99 to $79.99 per search. Its most advanced search includes social security number trance, national criminal database search, national sex offender registry search, domestic watch list search, county criminal court search, and education and employment verification.
Businesses can add on extra services as well. Those include professional license verification, employment credit report checks, drug screenings, healthcare sanction checks, and motor vehicle record searches.
Checkr launched in 2014 and is one of the leading background check sites for the tech industry, but it services other sectors as well. Some of its notable clients include Uber, Lyft, Instacart, Grubhub, and DoorDash. Contact the company for a pricing quote.
It’s an excellent service for large-scale hiring volume because of its powerful API. The company is FCRA-compliant and PBSA-certified.
Checkr conducts criminal history searches, employment and education verifications; motor vehicle records searches, drug screenings, and civil checks. It provides a convenient user interface with automation and is mobile-friendly.
AccurateNow offers reasonably priced background checks with no monthly minimums and a “pay-as-you-go” pricing model. The background check site caters to small businesses and offers pre-employment screening services for nearly every industry.
It uses a three-tier price model that ranges from $29.95 to $74.95 per report. The premium plan includes address history and social security trace, national criminal check, current county criminal search, national sex offender list search, global watch search, one education verification, and one employment verification. You can add on services for additional fees.
HireRight has been in business for over five decades and launched the first online background checks in 1997. The global company offers more than 150 background check services in over 200 countries. Using Hire Right Global grants free access to the mobile app Applicant Center, which guides candidates through the screening process.
It’s an excellent option for enterprise-level companies. Small businesses are directed to its sister site, Backgroundchecks.com.
It provides identity checks, employment verification, education, professional licenses, drug screenings, and more. Users can choose industry-specific packages, such as transportation, and select add-ons. Contact the company for pricing information.
Trusted Employees is an FCRA-compliant background check services company based in Minnesota. It’s been in operation for over two decades.
The company offers customizable scoring models and intuitive color-coding tools to speed up employee screening. It also offers risk assessment reporting with comprehensive employee background checks. Plans start at $29.95 per background check.
Sterling provides various employment screenings, such as criminal checks, education and employment verification, drug screenings, medical license monitoring, motor vehicle checks, and more. It’s PBSA-accredited and FCRA-compliant.
The company performs global background check services in 195 countries. It offers industry-specific solutions, including healthcare, nonprofit organizations, and gig worker businesses. It also offers integrations with many popular HR solutions to help improve workflow efficiency.
Sterling states its proprietary criminal record search technology improves the turnaround time for these screenings to one business day in most cases. Pricing for small and mid-sized businesses (SMBs) ranges from $29.95 to $79.95 per screening. Enterprise-level companies should contact Sterling for price quotes.
IntelliCorp is an online background check company offering services in over 100 countries. It provides the same criminal background check and employment verification services most companies on this list perform. One area where it stands out is that it also offers screening packages for volunteers and rental tenants.
Customers praise how easy it is to use the service and its quick results for background check reports. The company is FCRA-compliant and accredited by the PBSA. You’ll have to contact them for price quotes.
Verified Credentials is an FCRA-compliant and PBSA-accredited online background check company. It’s based in Minnesota and has been in business since 1984.
The company offers criminal records checks; verifications for education, employment history, and professional certifications; identity verification; healthcare-specific screenings; drug testing; credit checks, bankruptcy records, motor vehicle checks, and international background checks. Companies can order one screening at a time or bulk order screenings.
It also provides background checks for personal needs, so employees can see what employers can access when running a background check. Verified Credentials offers speed and accuracy with a turnaround time of three days. Its basic background check starts at $32.
ShareAble is a background check service offered by the major credit bureau TransUnion. As such, it’s FCRA-compliant and a good option for pre-employment screening for jobs in accounting and financial services.
It provides essential screening checks like criminal background checks, employment, education verification, and credit reports. However, it lacks some of the add-on services like driver records and drug screening.
ShareAble has three tiers of background checks: Basic for $25, Plus for $40, and Pro for $60. Its background checks are “pay-per-use,” so you don’t have to meet a monthly minimum.
Background Report offers a convenient self-service model that lets you complete the entire process online. It aims to be inclusive, so your job candidates also receive a copy of the report.
Its basic package is $21.95. It offers social security number verification, social security death index check, nationwide criminal convictions, sex offender records, and OAFC/Patriot Act terrorist watchlist. Its premium service starts at $31.95 and offers address history, alias names, phone number history, eviction records, bankruptcy records, lien records, and judgment records, in addition to the services included in the basic package.
Frequently Asked Questions
Here are the most common questions about the best background check service options.
What are the different types of Background Checks?
Here are the most commonly used background check services in pre-employment screening.
Criminal History: One of the most basic checks is reviewing a job candidate’s criminal history, if there is one. Some positions legally require a criminal background review. Even when not required, it’s often worth conducting to increase workplace safety.
Employment History: Employers want to ensure an applicant’s listed employment history is true and accurate. Not only do you want to confirm the applicant worked at the places they list, but you want to check the dates are correct and that the employee didn’t leave off any previous employers. For example, an employee might have worked for a competitor. Some employment history checks will also indicate if the employee was terminated due to unethical or inappropriate behavior.
Educational History: Much like employment history, employers should verify that a job candidate attended and graduated from the schools listed in the résumé or application.
Work Eligibility: Businesses should confirm that an employee’s work status allows them to work for the company.
Social Media Activity: Social media has become essential to how people present themselves to the world. You should know if a candidate has engaged in hate speech, discriminatory language, or other offensive behaviors online, which will disqualify them from employment.
Credit History: Some companies want to see if a candidate has excessive debt. This is of particular interest for positions where an employee has access to corporate funds, handing cash, or sensitive information. High levels of debt could be a significant red flag for those positions.
Driving History: Positions that require an employee to drive as part of the job should verify the employee has a clean driving record. Not only would a poor record make the employee a liability, but it could also drive up your insurance costs.
Medical Screening: Businesses offering jobs that require physical strain, such as warehouse workers, construction, landscaping, etc., want to ensure the candidate doesn’t have health issues that would prevent them from performing the essential tasks of the job.
How do I choose the Best Background Check company for my business?
Here are some essential tips for identifying the best background check site for new hires at your business.
Know Your Screening Needs: Small business owners and HR professionals should ensure the company’s screening services align with the needed information. If you just need a basic background check, look for companies that don’t inflate costs with unnecessary add-ons.
On the other hand, if you’re in a specialized industry, you might need a background check company that offers enhanced services specific to your sector. For example, a medical practice would need a company that runs medical license verification.
Ensure FCRA Compliance: One of the most vital aspects of looking for a background check company is ensuring compliance with FCRA. Non-compliant background check services could open you up to liability issues, and the information provided is less reliable.
Accredited Companies: Besides FCRA compliance, consider companies accredited by the Professional Background Screening Association (PBSA). While PBSA accreditation isn’t legally required, it shows the company complies with industry standards.
It’s also a good idea to look for Better Business Bureau (BBB) accredited companies. These companies are usually more trustworthy and typically provide reliable background checks.
Lookout for Unrealistic Claims: As mentioned, companies that advertise free background checks or instant results are typically not as reliable as accredited companies. As the saying goes, if it seems too good to be true, it usually is.
Should my business include social media Background Checks?
Regarding pre-employment screening, businesses must balance obtaining the needed information with maintaining personal privacy. Some employers, and many job candidates, consider social media checks to be an invasion of privacy.
However, social media platforms are public forums, not private ones. Looking for personal information such as family size, religious beliefs, or sexual orientation is ethically dubious.
But, looking for hate speech, discriminatory practices, drug use, or other behaviors that could compromise a candidate’s job performance or create a toxic or hostile workplace should be noted. So, there’s a fine line between what you should and shouldn’t look at while reviewing social media history. That’s why using a third-party service that will only examine social media activity through those parameters is a good idea.
How long does it take to get Background Check results?
The processing time for background checks has improved significantly due to the digitization of records and online services. Even so, it takes an average of 3 – 7 business days to get a complete and accurate report from a reliable company.
What causes red flags in employee Background Checks?
The primary reason businesses conduct background checks is for verification purposes. You’re essentially just verifying that the information the candidate provided is accurate.
However, there are some red flags you shouldn’t ignore. Here are some potential issues to watch out for:
- Patterns of unemployment: If a candidate has a history of leaving a position every few months, it might indicate that they are unreliable and not committed to long-term employment. While job hopping is more common with younger generations, you still want to see employees putting in at least 1 – 2 years at previous positions. Of course, the pattern would make sense if those positions were temporary or seasonal. But you should confirm that.
- Discrepancies or Inaccuracies: A significant red flag is if a candidate’s listed employment or education history doesn’t align with the report. If they were off by a month or two on employment dates, that’s not an issue. However, not working at a job they claimed to have or not having a degree from their listed college must be investigated further. If a candidate flat out lies on their résumé, then not only are they not qualified, but they’re also dishonest and shouldn’t be offered a position.
- Criminal History: A criminal history is another red flag, especially for violent crimes. While it shouldn’t automatically disqualify a candidate, you must dig deeper to understand what caused the incident and why rehabilitation worked.
- Non-consent for Background Checks: Performing a background check on a job candidate requires the person’s written consent. If a candidate refuses to consent to a background check, there are likely skeletons in that closet.
- Bad References: One previous employer’s negative comments about a candidate could be an isolated outlier. Multiple bad references showcasing a pattern of poor behavior or work performance shouldn’t be ignored.
Best Background Check Companies – Final Thoughts
Hiring new employees is often an exciting time for businesses. You’re usually in the process of expansion when hiring additional staff. You’re most likely bringing in new skill sets that could help you grow and do more as a business. Even if you’re simply replacing an employee that left, the new blood can invigorate the company.
But it would be best if you tempered that excitement with reasonable caution. New employees can temporarily disrupt the workplace ecosystem, so you must ensure the candidate has the requisite skills and will mesh well with your existing team.
Conducting background checks can help you verify the candidate is who they seem to be and will make a positive addition to the workplace. Identifying red flags can save you the time, energy, and costs of onboarding a bad hire.
Our best background check services list should help you verify your new hires. The cost of background checks often pales in comparison to replacing a new hire that doesn’t work out.
Contact us if you have more questions on background checks or need a small business loan to help fuel hiring additional staff. Our loan experts can help answer questions about the best solutions for your business.