Background Checks: Why They are Essential for Small Businesses

Background checks

Background checks have become a very common part of the hiring process for many companies. While it may be tempting to think that only large enterprise-level companies benefit from conducting background checks, that simply isn’t the case.

Small businesses must protect their interests, time, and financial resources like large organizations. Job applicants may be likelier to lie or omit information when seeking employment with small businesses, assuming that these companies lack the resources to verify one’s identity with as much rigor as a larger organization. Unfortunately, without doing your due diligence, this could result in hiring an unqualified candidate or one who could make the work environment unsafe.

There are multiple reasons why background checks are essential for small businesses, such as:

  1. To maintain a safe and secure work environment. Background checks often look into one’s criminal history, in addition to other aspects of their life. Knowing whether the candidate has ever been convicted of a violent crime can reduce the odds that you will hire someone who would threaten the safety and well-being of your other team members, partners, and customers. Additionally, knowing this information about your candidates can reduce your risk. For instance, if you hire someone without looking into their background and they become violent in the workplace, your customers or employees could bring legal action against you for negligence. Essentially, you are putting your business at risk if you aren’t doing everything you can to keep your team safe – including conducting background checks for potential employees.
  2. To prevent theft. While every business owner wants to believe that their employees would never steal from them, the reality is that it happens every day. Over one-fifth (22%) of small business owners have experienced employee theft. And while a background check won’t guarantee that no theft occurs at your company, it can dramatically reduce the likelihood of this occurring.
  3. To keep your business reputation intact. Any small business owner will agree that your company’s reputation is valuable. Word-of-mouth referrals are vital in a local setting. Unfortunately, one employee’s missteps – intentional or unintentional – can damage your company’s reputation irreparable. Background checks can ensure that you are only hiring individuals with the right background, education, licensure, and experience, which is one of the best ways to protect your company’s reputation.
  4. To identify ideal candidates. When hiring a new employee, you are committing to investing in their training so that they can help you achieve your business goals. However, any business owner that has hired employees in the past knows that sometimes during the hiring process, you might feel like something is ‘off’ with the candidate. Even if you can’t identify why you feel that way, our intuition often alerts us to threats. For example, candidates who aren’t who they claim to be or have something to hide may balk at the idea of undergoing a background check. Conversely, most legitimate applicants will consent to this evaluation in the hopes that it means they are one step closer to being hired. Conducting these checks is a great way to explore your hesitancies about a specific candidate. In general, they also verify that you are making smart hiring decisions using all of the data legally available to you.  
  5. To reduce turnover. Hiring and training new employees can be a huge business expense. In 2019, the average cost of training a new employee was $1,286, although this cost can be far higher, depending on the industry and position. In addition to the financial costs, it also takes time and other resources, which is why many companies try to reduce their turnover rate as much as possible. Background checks are a great way to break the cycle of expensive firing and rehiring, saving you tons of money in the long run. When you conduct background checks upfront, you increase the likelihood of getting a qualified candidate who can handle the position’s duties.
  6. Increase the confidence of investors and customers. Consistently hiring strong team members is one of the best ways to make your mark in your industry. A strong team can sometimes help you get recognized as an industry leader. But even if you fall short of that goal, having a reliable and knowledgeable team is one of the best ways to assure your investors and customers that your business is thriving. 

These are just a few primary benefits that small business owners can expect when doing background checks as part of the hiring process. To learn more about how background checks can benefit your small business, contact USA Fact today.

USA Fact Global Screening Services provides comprehensive background and criminal checks for employers that comply with federal and local laws. By helping you eliminate high-risk applicants through tailored solutions, USAFact enables you to create a safe and productive work environment and a foundation for future success.