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What are background checks, and why do employers perform them?

The recruitment process presents many challenges for both candidates and employers. Just as a candidate is likely to research their potential employer to see if they're in good standing as a company, employers also may check a candidate's background and credentials. Background checks are a common part of recruitment, and learning about them can help you navigate this part of the process.

What are background checks?

Employee background checks are a way for employers to verify certain aspects of a job candidate's personal and professional situation. It usually involves analyzing a potential employee's criminal, financial, commercial, and employment records. Their general purpose is to verify if the information that the respective candidate has provided is indeed accurate. Before performing a background check, employers are usually required by law to notify the candidates in writing and get written authorization. This doesn't cover all situations, though, as they can still perform some verifications, like calling your former employers to get references.

Here is some common information that employers may check:

  • Work history information, including dates of employment, job titles, and reasons for leaving previous jobs
  • Educational degrees
  • Credit history
  • Driving record and vehicle registration information
  • Drug test records
  • Medical records

Reasons why employers choose to perform background checks

Employers may decide to perform a background check on a job candidate for a variety of reasons. Some common ones include:

It can help prevent fraud

One of the main concerns for a business when hiring a new employee is determining if they have the personality, experience, and skills to perform the role. Unfortunately, some candidates try and scam their way into the workforce through various methods, like falsifying their work history and educational milestones, using false identities, and other similar practices. Verifying the information that candidates provide can protect employers by helping them detect these types of situations before actually offering them a job.

It can help businesses comply with laws and regulations

Businesses in certain fields are required to follow specific practices when hiring new employees. Performing background checks on candidates can ensure that each new employee fully complies with the specific requirements for that profession or industry. This protects employers from fines and penalties while also making them less vulnerable to legal action.

It can help keep the workplace safe

Checking certain aspects of a candidate's background, like their criminal record and employment history, can help avoid situations where a dangerous individual has access to a workplace. This can make the company a safer place to work and assure all existing employees that each new hire is thoroughly vetted before they get a job. It also helps the company protect itself by determining if a candidate has any history of workplace wrongdoing, such as fraud or insider trading.

It can increase the quality of new employees

Even if the discrepancies between a candidate's declared and actual background are minor, they can still affect their individual and collective performance. Performing background checks can help the employer make sure that the candidate actually has the educational and professional background they claim to have. It can also show the potential employer that a candidate has a history of being loyal to their previous employers.

It can protect the company's owners, investors, and customers

Companies that regularly perform background checks on their job candidates are usually less likely to suffer from situations like bad employee performance, theft, and other things that reduce productivity and profitability. This can be a significant competitive advantage over organizations that don't perform background checks, as owners and investors have more faith in the company's staff, and customers are more likely to receive quality goods and services.

It can protect companies from bad publicity

Hiring unfit employees can create a negative reputation that can impact the company's image. This, in turn, can affect the popularity of its goods and services, and it may also discourage potentially qualified candidates from applying for jobs. Researching each candidate's background and credentials can prevent these instances and add value to the company's brand.

It can help protect customer data

Keeping customer information secure is a major aspect that companies have to take into consideration, especially in the modern and highly-digitalized world. Since many employees require access to customer information to do their jobs, not having a staff you can trust can lead to data leaks, which can cause a loss of prestige and potential litigation issues. Thorough background checks can help prevent this type of situation by increasing the chances of having an ethical staff.

"Before performing a background check, employers are usually required by law to notify the candidates in writing and get written authorization. This doesn't cover all situations, though, as they can still perform some verifications, like calling your former employers to get references."

How to handle a background check as an employee

If a potential employer has decided to shortlist you for the role and perform a background check on you, the best thing you can do is ensure that the information you provided to them matches reality. Here are some specific things you can do beforehand:

Check your public records

The first thing you can do when faced with a background check is to make sure that there are no public records that may contradict the information you provided. Start by contacting your local Department of Motor Vehicles and asking for your driving record. Depending on the job you're after and the information that you gave during the interview, it may also make sense to verify your educational milestones, court history, and any other record that's publicly available.

Review your standing with previous employers

One of the most common ways companies check candidate backgrounds is by contacting their former employers and asking about their time with them. When preparing for a background check, it may help to contact the workplaces you listed on your resume and ask them for feedback regarding your time there. Some employers may also provide you with copies of your personnel files. If you think that hiring managers are likely to contact your previous employers, you may want to take this step even before applying to ensure that the workplaces you mention in your resume can truly improve your chances.

Be careful about the public information you willingly put out

Modern background checks may include a potential employer checking your social media presence and activity on other types of internet platforms. If some of the things you've posted don't match the employer's company culture or general preferences regarding their employees' views, this may affect your chances of getting the job. You can avoid this by going through your social media and internet history and making sure most of the things you posted are not available to the general public.

Get a copy of your credit report

Potential employers may also check your credit history and analyze information like current and past loans, outstanding balances, missed or late payments, and foreclosures. Although they don't have access to your actual credit score, they tend to operate similarly to lenders and analyze your long-term credit history. Even if you have nothing to hide or worry about, getting a copy of your credit report before your potential employer does can help you make sure there are no discrepancies or faulty information.

Be honest

Finally, the most important thing you can do to ensure that your background doesn't stand in your way of getting a job is to be completely honest throughout the entire application process. Even if you have aspects of your background that may affect your chances of getting the role, lying and getting caught is usually much worse than openly discussing the issue with the hiring manager.

Background checks can be an important part of the hiring process. Learning why employers choose to perform them and how to prepare for them can improve your chances of getting a job that suits you. Once you've taken these steps to prepare, make sure to upload your resume so you can start applying for jobs.

More tips on getting a job:

Improve your chances of getting an interview by learning how to build a resume with CoLab.

Prepare answers for these seven skills-based interview questions to impress your hiring manager.

Find out what to research about a company before a job interview.