Mitigate Risks to Your Small Business with Background Checks

Sara Korolevich
February 13, 2023
5 min read

More businesses use background checks than ever before, and the number is growing. If you currently don’t use background checks, you may be missing out on the benefits background checks can offer.****

Some small businesses avoid using background checks during the hiring process, even if they understand their importance. This may be because of uncertainty around which types of background checks are necessary, worry about hiring delays, concerns about costs, confusion about compliance rules, or previous unfavorable background check experiences.

Although these concerns are valid, they may keep small businesses from reaping the benefits of background checks. With the right screening partner, background checks can be easy, fast, safe, and reliable, and they can also help you protect your small business when making hiring decisions.

By giving you relevant, accurate information, background checks can help mitigate risks to your small business and reputation. When you hire the most qualified candidates, it’s easier to build trust with your employees and customers.

If you’re considering adding background checks to your hiring process, keep reading to learn more about how background checks can help mitigate risk and protect your organization.

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Avoid making hiring decisions based on incomplete information

It can take a long time to find the right person to fill a vacancy, and hiring a job candidate is expensive. Current estimates place the average hiring cost at $4,700. The longer a position goes unfilled, the more expensive the process can become. If a new hire doesn’t last and the process of hiring and training must be repeated, expenses multiply.

Without background checks, you may not discover disqualifying information about a candidate until after the individual is already employed. This can be very costly to an organization, especially if the person is in a position of trust.

Background checks can help prevent or minimize many of these expenses by giving you potentially relevant information about candidates’ history and qualifications before they are hired. Although some employers may worry about background checks causing hiring delays, an advanced background check platform like Checkr can return results quickly. (Checkr’s Basic+ package returns 98% of results within one hour.) Conducting background checks can save you time and money by helping to ensure candidates are qualified for positions before they are hired.

Comply with industry regulations that mandate background checks

Compliance regulations can be complex. Whether your business is large enough to employ a compliance team on staff or not, maintaining compliance with federal, state or industry regulations is your responsibility.

Some industries require background checks to ensure public safety. For example, employers in the healthcare industry may conduct a healthcare sanctions background check to confirm their candidates are in good standing with the appropriate licensing boards and maintain eligibility for state and federal funded programs.

Other industries that may require background checks include education and child care, senior care, government, and financial services. These industries trust their employees to manage assets or care for vulnerable populations and background screening can help to hire qualified candidates while mitigating risk.

Reduce liability in the event of a workplace incident or accident

Managing risk is a concern for many small business owners. Background checks can help reduce the risk of lawsuits stemming from incidents that occur in the workplace. Small business owners who conduct background checks protect their customers, clients, or patients by hiring qualified candidates.

Additionally, background checks may help mitigate the risk of negligent hiring lawsuits in certain circumstances. A negligent hiring lawsuit generally alleges that an employer is responsible for damage caused by an employee to third parties if the employer knew (or should have known) the employee was a potential risk for causing harm to others, or if a reasonable investigation could have discovered the risk of harm. A handful of states have passed laws to mitigate the risk of negligent hiring claims to employers.

When using background checks, the reduced risk can pay off in other ways. For example, if you perform regular motor vehicle record (MVR) checks, you may save money from the reduced likelihood of accidents and the resulting reduced insurance premiums.

Protect your brand and company reputation

As you build your business, you also need to build a team you can trust. Although it takes time to develop trust, background checks can help accelerate the process by quickly verifying a person’s credentials and past history so you can determine if your job candidates are qualified to perform the tasks required by their roles.

When you conduct background checks fairly and consistently, you have more confidence that you’re hiring qualified people who can represent themselves honestly, perform their role capably, and handle your brand, assets, and customers with integrity. When your job candidates are qualified for their roles, it’s less likely that they’ll cause adverse incidents that could damage your business and your brand.

Keep customers coming back, and win more business

Customer trust matters. Organizations with a high level of customer trust outperform their peers by up to 400%. The process of building trust should start early in your customer relationship.

When clients engage with you, your background screening process can help reassure them that your organization is safe,  secure, and trustworthy before they even make a purchase. Businesses that manage clients’ financial resources, drive fragile equipment to new locations, or complete repairs inside clients’ homes demand a high level of trust to complete these transactions. Your background checks can help reassure customers that a potentially vulnerable interaction is safe, helping you build trust. 
Some clients, especially if you’re providing a business-to-business product or service, may require your staff to be screened before they will sign a contract. If you’ve already performed background checks, you can speed up the process and get to work sooner.

Find the right background check for your small business

If you’re a small business owner considering the benefits and drawbacks of background checks for your business, the decision is easy. You need to hire qualified people quickly, and you don’t want to spend unnecessary time and money to do so. If that’s true for your business, Checkr can help.

Checkr’s affordable, customizable background check packages are well-suited for the needs of small businesses. With commitment-free, pay-as-you-go pricing and built-in compliance workflows, Checkr makes it easy for small business owners to get reliable results quickly so you can hire with confidence.

Get a background check today

Disclaimer

The resources provided here are for educational purposes only and do not constitute legal advice. We advise you to consult your own counsel if you have legal questions related to your specific practices and compliance with applicable laws.

About the author

Sara Korolevich serves as checkr.com’s editor and content manager. In this role, she produces educational resources for employers on a broad range of screening topics, including background check compliance and best practices. She also writes about Checkr’s company and product news to keep customers updated and informed.

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