Background Check Blunders Small Businesses Make

The HireRight Small Business Spotlight, the industry’s only report on the background check practices of small businesses, indicates that employment screening is becoming more and more critical for small businesses, as they may fall victim to some common, but potentially significant screening mistakes.

The Report highlights the critical value that screening provides as 64% of respondents said screening has exposed a person who lied on a resume or application and 54% reported that screening uncovered issues that would not have been found otherwise. The report explores small business background check processes based on an extensive survey of small business owners, executives, and managers.

“For small businesses, a bad hire represents a greater proportional cost for the organization than that of large enterprises, since every key employee has a huge impact on the business and its customers. Even a single bad hire can stunt a small organization’s future growth,” says Rachel Trindade, vice president of marketing at HireRight.

“Our Small Business Spotlight identifies some of the best practices for screening and important trends in background checks that small business owners should consider to improve their hiring quality.”

According to survey respondents, the top benefit of background screening is improved quality of hires (53%), as effective screening helps employers ensure the most qualified candidates are hired for key positions.

Other benefits respondents noted include a safer and more secure workplace (49%) and better regulatory compliance (36%), which is critical in a complex environment where state, federal, and industry regulations are constantly being created, modified, and clarified.

Common Background Check Mistakes 

Despite the benefits of screening that respondents reported, several data points from the Spotlight indicated some significant risks many small businesses may be taking in their screening processes.

• Not verifying previous employment and education. Only 58% of respondents check previous employment/references, and even fewer (32%) perform education verifications. By not verifying credentials and experience, small business owners may not be hiring the most qualified candidates for key positions.

• Not drug testing. According to the survey, 68% of respondents conduct drug and/or alcohol testing on all employees, leaving 32% who do not. Drug use in the workplace can lead to increased risk of accidents, absenteeism, and reduced productivity.

• Using social media for screening. While the majority of small business respondents do not use social media for screening, about one-third (33%) indicated they do use social media sites as part of their screening process. This can be an issue for companies because information accessed on some sites can be biased, inaccurate, or potentially even discriminatory, and can lead to problematic hiring decisions.

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