4 Small Business Background Checking Best Practices

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Background screening used to be a manual and time-consuming process conducted primarily by larger organizations. However, with the advent of affordable, user-friendly and compliance-driven on-demand screening solutions, more and more small businesses are able to effectively leverage background screening to mitigate hiring risks and improve quality of hire.

To better understand how and why small businesses are conducting background screening, HireRight surveyed more than 600 small businesses across all major industries. The resulting 2011 Small Business Spotlight reveals four essential best practices for small businesses to help mitigate risk and improve quality of hire:

1. Put it In Writing
A written background screening policy is the backbone of a successful screening program. According to the Small Business Spotlight, 29 percent of small business employers plan to create an employment screening policy in 2012 and another 19 percent plan to draft a policy that specifically addresses drug, alcohol and health screening.

Background checking policies can help protect your organization in the event of a discrimination claim or regulatory audits. The policy should also set clear background screening procedures for human resources personnel.

In the policy, your organization may describe the employee background checks that might be conducted for various positions and how the screening results will be evaluated to make hiring decisions. To help mitigate the risk of potential discrimination claims, a best practice is to specify which roles or job titles may need additional background checks.

For example, a position that involves financial responsibilities may warrant a credit check, while an administrative role may not require it. To help ensure compliance, always have an attorney review your background screening policy.

Types of background checks for small business

Source: 2011 HireRight Small Business Spotlight

2. Help Reduce Risk with Criminal Background Checks
According to the 2011 Small Business Spotlight Report, 88 percent of small businesses require criminal background checks as part of the background screening process. However, depending on the types of criminal background checks conducted, employers may still be exposed to risk.

While organizations that check a national criminal database will have access to a wide range of criminal record history, the data is not considered comprehensive and may not be up-to-date due to time lags between when offenses occur at the county or state level, and when they are reported to the national database.

To help ensure more comprehensive coverage of criminal records, organizations may consider conducting criminal background checks at the courthouses of the applicant’s counties of residence, work and education and surrounding areas, in addition to national background checks.

It is also recommended that organizations use both pre-employment background checks and ongoing criminal record checks for both regular workers and contingent workers.

3. Verify the Most Commonly Falsified Information
It’s not uncommon to find applications that contain an outright lie about experience, education and ability to perform essential work functions. Without verifying an applicant’s employment and education history, motor vehicle records and even credit history, organizations may be blind to crucial red flags or misinformation that could dramatically impact a hiring decision.

Checking employment and education history can help ensure that applicants really do meet your job requirements. For positions that involve driving or equipment operation, motor vehicle checks may help improve workplace safety and reduce liability risks.

4. Reassess Regularly
According to the Small Business Spotlight, in 2012, 44 percent of small business respondents plan to review their employee screening standards and another 15 percent plan to evaluate their non-employee screening standards. This means that more than half of small businesses are not regularly assessing their employee screening standards and that more than three quarters are not reviewing their contingent worker screening standards.

With ever-changing industry, state and federal regulations, organizations that do not re-evaluate their screening practices could face greater exposure to compliance and legal risks.

It is a best practice for small businesses to self-audit their background screening policy and program no less than annually. Organizations should also monitor changes in industry regulations and worker eligibility legislation that may affect their hiring process.

By reviewing these four best background checking practices, small businesses can help mitigate risks and improve the overall quality of hire.

Free Report: Small Business Spotlight
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Learn the employment background checking best practices of other small businesses by downloading:

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HireRight is a leading provider of on-demand employment background checks, drug and health screening, and electronic Form I-9 and E-Verify solutions that help employers automate, manage and control background screening and related programs.

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