Why Employers Do Credit and Background Checks
By CareerBuilder , Posted Jul 1st 2011 @ 7:00AM
By Beth Braccio Hering, Special to CareerBuilder
If you want to work for the senior homecare organization Visiting Angels in Ann Arbor, Mich., be prepared for a thorough background check. "I wouldn't even consider hiring an employee without one," says owner and director Angil Tarach-Ritchey.
"Employees not only need to be trusted by the employer, they are a reflection of our business," she says. "The check brings peace of mind and less risk for future problems, and I use it as an educational and marketing tool so the elderly, their families and our referral sources know that we value their safety."
Tarach-Ritchey is not alone. A variety of employers are turning to background checks as a way of ensuring applicant suitability. And while certainly not a new phenomenon, it is one that is on the rise.
"The trend toward greater use of background checks could be driven by several factors, including technological advances that make the screening process easier, faster and more economical," says Mary Massad, vice president of talent acquisition and retention strategies for Insperity Recruiting Services in Houston, Texas. "Also, there is greater awareness by employers that candidates may not always be completely honest about their background and employment histories."
According to Massad, a complete background check often includes the following:
- Review of work history. The applicant will typically be asked to provide first and last paystubs to confirm length of employment and salaries at previous jobs.
- Verification of Social Security information. Federal databases will help verify that a candidate is providing accurate information and has a legal right to work in the United States.
- Criminal background check. Local criminal records, as well as those in jurisdictions where the applicant has lived during the past seven years, will reveal information about an applicant's criminal background.
- Confirmation of education. Schools or universities listed on the applicant's résumé will be contacted to verify the applicant's attendance, degree and graduation year.
- Review of driving record. Employers typically obtain motor vehicle records on candidates whenever a job requires driving, such as deliveries or sales calls.
Increasingly, employers also are performing credit checks. According to a survey by the Society for Human Resource Management, 47 percent of companies run credit checks before hiring for select positions, and 13 percent do so for all positions. While searches are most common for applicants who will have financial responsibility (handling cash, banking, accounting, technology), checks are becoming more commonplace for those seeking senior executive positions and for anyone who has access to highly confidential employee information, such as salaries, benefits and medical records.
So what should an applicant do when confronted with an employer who wants to run a check? Don't lie, and know ahead of time what the hirer will find.
"As far as preparing for an employer running a background check, there is very little the applicant can do. He cannot influence the outcome, so our advice is to be totally honest and up front about any criminal past and be able to articulate a reasonable story about either how it happened or what has transpired since that makes the applicant a good risk," says Dan Chaney, director of human resource advisory services at Employers Resource Association, a nonprofit serving small and medium businesses in Ohio, Kentucky and Indiana. As for a credit check, he suggests job seekers obtain a free credit report and be prepared to explain the results if necessary.
Guidance policies from the U.S. Equal Employment Opportunity Commission deter companies from discriminatory practices. Results from a criminal background check must be approached with fairness, taking into account such factors as the nature of the offense, the age of the offense and the relationship of the offense to the job. An SHRM poll reveals that the majority of employers comply with EEOC expectations.
Thus, job seekers subjected to checks should not feel that a company is attempting to dig up embarrassing dirt. Most employers are just trying to run a good business, and verifying a new employee's background can be in the organization's best interest. As Massad notes, "Few businesses boast perfect records on hiring decisions.
"Mistakes, such as blindly trusting candidates to provide honest information on their résumés or during interviews, can have long-term repercussions for employers that may include work disruption, lost revenue, low employee morale, litigation or even damage to a company's reputation. Background checks have become an essential hiring tool that can help protect a company."
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Beth Braccio Hering researches and writes about job search strategy, career management, hiring trends and workplace issues for CareerBuilder. Follow @CareerBuilder on Twitter.
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