Benefits of Employment Background Screening

Why do employers conduct background checks? Is it simply to verify a job candidate’s qualifications, or are there additional benefits? The 2012 HireRight Employment Screening Benchmarking Report reveals the top four benefits employers realize by conducting background screening and how it adds value to their organization.

1. Improved quality of hire
Sixty-seven percent of survey respondents said that the quality of their hires improved due to background screening. Background checks help uncover false information on resumes, where 70 percent of respondents have reported finding an inaccuracy. In addition, respondents are finding misrepresentations more than once, where 74 percent of respondents cited that they find misrepresented information up to 10 percent of the time. In another recent study, the Society for Human Resources Management (SHRM) found that job seekers who had committed negative acts in the past were the most likely to have falsified resumes.

If an applicant misrepresents their employment history, education, certifications, criminal history or employment eligibility, not only could it result in a poor hire, it could also potentially result in financial, legal and regulatory risks for the hiring organization. A background screening program can help uncover false or misrepresented information early on and prevent future risks and elevated hiring costs. 

2. Reduced negligent hiring risks
Twenty-nine percent of survey respondents said that background screening helped to mitigate negligent hiring risks. Negligent hiring claims may arise, for example, when a worker causes harm to a co-worker or third party within the scope of their job and the victim claims that the worker had a record of or propensity for causing this type of harm that the employer should have discovered if it had conducted its “due diligence”. If this allegation is proven, then the employer may be liable for negligent hiring damages. 

A negligent hiring lawsuit can result in steep costs and reputation damage. According to SHRM, the average settlement of a negligent hiring suit is close to $1 million, although some cases have resulted in settlements in the tens of millions of dollars. With 24 percent of Benchmarking Report survey respondents citing cost containment as one of their biggest business challenges, background screening can help to protect against detrimental negligent hiring claims.

3. Enhanced regulatory compliance
In the Benchmarking Report, respondents named regulatory compliance as the second most important business challenge and 44 percent of respondents found that background screening helped to improve regulatory compliance. A background screening provider with in-house compliance expertise, as well as intelligent built-in compliance tools, can help an organization to satisfy industry standards and state and federal requirements, which can vary from state-to-state and by job position, creating added complexity for employers. Without an effective employment screening program, an organization could face costly fines, loss of privileges or legal damages.

During each step of the employment screening process, from background checks to completing an electronic Form I-9 employment eligibility verification, a background screening provider can help you implement a compliant screening program for your organization.

4. Improved workplace safety
Forty-two percent of survey respondents found value in background screening because it helped them to increase workplace safety and security.  Additionally, 16 percent of employers found screening reduced employee theft, 14 percent found it reduced workplace accidents and 11 percent said it reduced workplace violence.

The U.S. Chamber of Commerce, in conjunction with the American Management Association, estimates that 30 percent of all business failures are a result of employee theft and that three quarters of all employees steal at least once. An FBI study highlighted that nearly 355,000 businesses will experience a workplace violence episode in any given year. Employers can conduct background screening to increase hire quality and better protect property and workers against damaging workplace accidents, violence and theft.