Four Reasons Why Background Checks are Essential for Small Business Success

June 23, 2021
Checkr Editor

2020 was a record-setting year with 1,548 employment-law class and collective action rulings. While these cases cover a wide spectrum of workplace-related litigation from discrimination to equal pay, it’s clear that rigorous compliance with hiring rules and regulations is of the upmost importance. A bad hire can cost businesses time, money, and productivity, so why are so many small businesses skipping one of the most effective preventative measures? 

Small business owners already have a lot to think about when it comes to hiring. You have to find a culture-fit with the right skills under a limited time and budget. With these concerns in mind, it’s tempting to forego the expense and hassle of a background check in favor of informal screens. However, internet searches and social media checks are no substitute for the ‘real deal’ and can lead to a lot of hassle down the line. 

Let’s consider why, in the world of small business, background checks have a bad reputation. In the past, background checks were a manual, time-consuming process. They could be outsourced—but that can be expensive and slow. 

As a small business, you have a deep connection to your customers and employees, and their safety is a top priority. Thanks to new tech-powered solutions, it’s much easier for small businesses to manage background checks in a way that’s both responsible and time/cost-effective. It’s imperative small businesses integrate background checks into their hiring processes. Here’s why: 

1. Decrease turnover

As a small business, you have to consider the outsized impact every employee has on the success of your operation. Even if you are anxious to get a role filled quickly, you should never skip the appropriate background checks. You need reliable and competent team members, and signing the wrong person ends up costing more down the line. Replacing an unfit hire can cost upwards of 30% of the employee’s first year of salary and take at least six weeks

2. Mitigate risk

Conducting a background check is a smart step that helps mitigate risk for your business in several ways. They help ensure (as much as you can) that the candidate is the right fit for your business and the role, from confirming identity and experience to screening for relevant criminal records. Businesses who neglect these steps can face a range of consequences from damage to reputation all the way to legal action. 

3. Demonstrate care

Building off the idea of risk mitigation, we have to remember what’s at the heart of the phrase—it’s safety! Risk mitigation is about creating a safe environment for all stakeholders from employees to customers. When you take the time to run the appropriate background checks, you show your community that you care about their experience and well-being.

4. Save where it counts

It’s important to be smart when it comes to cost-cutting measures. In our experience, responsibility pays in the long run—quite literally! Many insurance providers reward due diligence with lower premiums. This saving is recurring with no risk, unlike the one-time, highly-risky saving of skipping out on a background check. 

Key takeaway for small businesses implementing background checks

The number one takeaway of this article is that background checks are a long-term investment in the success of your organization. You’ve built your small business with grit and dedication, and you don’t want a poor hire to derail that hard work. It’s an outdated idea that efficiency or savings can be gained from skipping a proper screen.

With an AI-powered background check solution like Checkr, you can streamline the process and see savings and improvements to your bottom line. At the end of the day, hiring is too important to do halfway. A quote from the late-great UCLA basketball coach, John Wooden comes to mind, “If you don’t have time to do it right, when will you have time to do it over?”

If you are a small business interested in discussing a background check solution for your company—talk to sales today.

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