Background Check

The Benefits of Background Checks for Individuals and Businesses

As more people compete for jobs and contracts in an ever increasingly tight market, there is a temptation to embellish credentials or even make false statements on resumes. Surveys conducted by Accu-Screen, Inc., ADP, and The Society of Human Resource Managers in 2012 found the 53 percent of people lied on job applications or on job applications. Even more worrisome is that the same survey found that 70 percent of recent college graduates admitted that they would lie on their resume if it meant that they would get a job []. While it is short-sighted for the person to lie on their resume because in most cases the falsehood is discovered and they will be fired, this deception can also be costly for a business.


A Falsehood on a Resume Costly for Both an Executive and a Company

In 2002, it was discovered that a CFO of a major software firm had lied about his academic credentials. He claimed that he received his MBA from Stanford and that he received his undergraduate accounting from Arizona State University. As a result, he was forced to resign from the company. Despite his resignation, the credit rating of the company was dropped and the stock of the company dropped by 20 percent. If the company had completed a thorough background check prior to employing this executive, the business and the stockholders would not have incurred this loss [].


Businesses and Background Checks

Businesses who conduct background checks find that this due diligence provides a significant return on their investment. As in the example, a company can lose a significant amount of good will and consumer trust, which will affect their bottom line. Another example of a company that took a hit to their reputation was Yahoo! when it was discovered that Scott Thompson, their CEO, had lied on his resume about his educational background. Both of these situations could have been avoided if the companies had performed background checks to verify the academic credentials before hiring them.

In addition to verifying information that a job applicant had documented on his or her resume, background checks can also provide an employer with a criminal background check. A recent 2012 industry survey found that businesses in the United States lost $50 billion due to employee theft [.]. Moreover, with the growing popularity of online retailing, more companies keep sensitive customer information, such as credit card information, in company databases. If an employee compromises these databases and steals this information, companies not only incur the ire of their existing customers, but also lose potential sales from new customers who do not want to trust the company. Moreover, the company is likely to have to pay for identity theft prevention services and credit monitoring for their customers. The risk of employee theft and security breaches can be significantly decreased by performing a criminal background check.

Businesses can use backgrounds checks to find information about other companies. For example, if they are considering forming a partnership or buying another company, a background check can determine if the company has a history of code infractions, lawsuits, or regulatory violations. Additionally, background checks are useful when performing assets discovery and verifying property values. The results of background checks provide the foundation for making sound and informed business decisions.


Background Checks for Consumers

Individuals are also discovering the benefits of background checks. As more employers start performing background checks for potential hires, it is essential to verify that the information in your background check is correct. Just as consumers sometimes have errors in their credit reports, there can be misinformation in public records. Often these errors occur because of similarities in names, data entry mistakes, or Social Security numbers that are close in sequence. It is much easier to correct these errors before beginning a job search than trying to explain mistaken information to a Human Resource representative, given that the opportunity is even offered.

As more and more families have both parents working, it is common that people hire childcare help or sitters for elderly parents. The media is full of stories of nannies and eldercare workers who have abused or neglected their charges. People can protect their loved ones by performing a background check on potential caretakers. These checks will help determine if the person has had any complaints or criminal charges brought against them. Additionally, a comprehensive check of sex offender registries can be requested as part of the background check.

Consumers can also check the credentials and licensing status of physicians, attorneys, and other professionals. These background checks allow people to verify that a professional has standing to practice in their state as well as any history of sanctions levied by professional boards. This ensures that individuals are receiving competent care and services.


Background Checks for Non-Profits

Many non-profit organizations provide services to the most vulnerable members of society. Children, the elderly, and the disabled are easily exploited by unscrupulous individuals. Additionally, non-profits also have extremely limited funds and have a great deal of difficulty trying to recover from theft. Moreover, donors often look to other organizations to support when a non-profit has problems with abuse, neglect, or exploitation of clients by volunteers, or a history of theft.

A non-profit organization can protect their clients and organization by contracting to have background checks of their volunteers. This will provide them with information about any criminal history, domestic violence or child/elder abuse history, as well as a check of sex offender registry information.


Privacy Concerns and Background Checks

While the majority of information contained in background checks is derived from searches of public records, it is considered best practice to inform the person that their background is going to be checked. The notification should be provided in writing and the individual should sign a document giving permission and waiver of liability in the event unfavorable information is discovered. Often when unscrupulous people find out that they are subject to a background check, they will withdraw their application. Just informing a person that they are undergoing a background check can deter dishonest or unethical people from trying to join your organization or providing services to your family.

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