When you have just 16 to 50 employees, the types of policies and procedures you adopt can determine what your company’s future growth looks like. At this stage in your company’s development, you need to revamp HR practices like background checks. As a small business, you can’t afford the reputational damage, labor cost, and morale impact that occurs when you hire unethical, poorly performing employees.
The Best Practices for Incorporating Background Checks Into Your Small Business
During a recent Mission to Grow panel discussion on “HR Roadmap for Growth Series: What are HR Priorities for 16-49 Employees,” Chris Cooley, principal at MyHRScreens, discussed what it’s like for small businesses as they reach this stage in their business growth. “We’ve got more revenue, more buzz, and more risk from the employees that you’re hiring.
“It’s really important to do your background checks so that one: You’re protecting your business so that you don’t have employees out there who are doing things they shouldn’t. We don’t want them to go to the client’s location to steal or anything. Two: You’re protecting your employees because you don’t want a violent offender on-site. You don’t want to deal with that. And three: It’s really insurance into making sure that you’re protecting your company from those situations,” says Cooley.
With a background check, you protect your employees, clients, and business from the risk of having violent offenders at your company. By ensuring your small business hires dependable workers, you can also achieve better employee morale and higher retention rates. To ensure the best results, remember to use the following best practices for incorporating background checks into your small business.
Check More Than Just Criminal Records
Today’s background checks can verify more than the employee’s criminal history. They can check an applicant’s job history, educational background, references, financial history, driving records, and employment history. However, it’s important to keep in mind that some states have restrictions on what you can look up in a background check and at what point the check can be performed during the hiring process.
Be Consistent: Background Check Every Employee
Whenever you are inconsistent in your HR processes, it leaves your company liable to potential discrimination lawsuits. If you only background check specific people, someone could later find out and file a lawsuit. The easiest way to ensure you are treating all of your employees fairly is by treating them the same.
You should generally plan on background checking all of your workers. The only exception is if you background check specific employee classes or groups. For example, all of your drivers may have background checks performed on their driving record or criminal record because their job description involves unique responsibilities.
Follow Local and Federal Laws
Under federal law, employees must be treated equally in background checks, regardless of their membership in a protected class. Employees cannot be asked about their genetic or medical history. However, employers are allowed to inquire about criminal histories, public social media accounts, education, credit histories, and employment backgrounds. Before conducting the background check, the employer must obtain the applicant’s written permission and inform them about how the background check will be used.
There are also many federal rules about what happens if the background check is used as grounds for not hiring the applicant. For example, the employer is required to give the individual a copy of the report.
Besides federal laws, you also have to consider the laws in your state and municipality. In states like California and New York, there are Ban the Box laws. These regulations typically prohibit employers from performing background checks until an offer of employment is made. Often, employees will be allowed to contest the background check results.
There are many nuances to background check laws in different parts of the country. To keep your small business compliant, it’s generally a good idea to partner with a professional HR company.
Be Transparent With Candidates
Legally, you’re required to obtain written consent and inform employees that the information will be used for employment decisions. Even if this was not a legal requirement, it is also a good idea. Inform employees about what to expect as early as possible in the process. For instance, you should probably include the background check requirements in the job listing.
Transparency is important for your hiring experience. Besides supporting your brand, being transparent also saves your company and the applicant valuable time. By letting them know about future expectations in advance, you are giving applicants a chance to apply somewhere else if they know they won’t pass a background check.
Work With a Trustworthy Background Check Provider
Ideally, you want to find one reliable background check provider to work with. Using multiple vendors makes the entire process more complex and difficult to navigate.
As you search for the best background check provider, consider the online platform they provide. It’s generally easier to work with a provider who has an automated process, so you can easily submit the applicant’s information and get started immediately on conducting the background check.
Give Applicants an Opportunity to Contest the Report
Under the Fair Credit Reporting Act (FCRA), you are required to give applicants a chance to contest inaccurate information. If you’re making an adverse decision based on the background check, you are legally required to provide “A Summary of Your Rights Under the Fair Credit Reporting Act” as well as a copy of the consumer report your company used to make its decision.
The Advantages of Using Background Checks
As a small business, there are a number of important advantages to using a background check.
Ensure Worker and Customer Safety
One of the most important reasons why you should consider adopting background checks is for the safety benefits. You don’t want to risk the security of your workers or customers by allowing a violent offender to work on your staff.
Improve Turnover
Besides weeding out violent employees, background checks can also be used to avoid low performers and people who don’t have the skills they listed on their resume. Because they help you avoid employees who are likely to leave your company, background checks can improve your turnover rates. Plus, your remaining workers will be more likely to stay if they are in a safe, supportive environment.
Prevent Theft
Through background checks, you can prevent theft at your organization. It confirms the individual’s identity and demonstrates their trustworthiness. More importantly, background checks can spot financial problems, criminal backgrounds, and other indications that an employee may be more likely to steal from the corporation.
Protect the Organization’s Reputation and Brand Image
Ultimately, a background check helps protect your organization’s brand image and reputation. When you hire questionable talent, it opens you up to fraud, reputational damage, employee disengagement, and other issues. To protect your small business, you need to be completely confident that you are hiring the best workers possible.
Incorporate Background Checks Into Your Small Business
Early on, many small businesses start out by hiring family, friends, and people from the founder’s social network. As your small business grows, you have to change your hiring process to ensure your new hires meet a high standard. By integrating background checks into your small business, you can set your company up for success.
To learn more about how background checks can enhance your hiring process, reach out to our team of small business HR and payroll experts today.