Three benefits of effective employee background checking

If done effectively, employee background checking can present tangible benefits for your company.

Lisa Lee, General Manager, Background Checks at Zellis

Aug 25th 2020

In today’s world, every part of your company’s recruitment process matters. It’s not just about making sure you find the right hire, but doing so in a smart, agile and cost-efficient way too – especially in the face of economic uncertainty. All the while you must also remain conscious of ever-changing employment regulations.

In discussions about what makes a good recruitment process, employee background checking is rarely put under the spotlight. It’s frequently miscast as a ‘tick-box’ exercise. The reality is that it’s much more complex and impactful than that. If done effectively, it can present tangible benefits for your company and its recruitment efforts, but if not taken seriously it can cause a range of challenges.

So, what are the top three benefits of employee background checking?

1. Boosting the candidate experience

In the current jobs environment, it’s not uncommon for candidates to juggle multiple applications. In fact, our research showed that almost a quarter (24%) have between six and ten applications at telephone interview stage or further at the same time.

What does this mean? Well, it heavily indicates that the employers which are able to progress applications the fastest and most responsively are likely to stand out from the crowd. We also found that two in five (41%) HR Directors believe “cumbersome internal processes” cause significant delays in making a candidate an offer.

Employee background checking is often one of the longest and most complex phases in the application process, so it’s vital to streamline it as far as possible. It’s also worth considering how you can further boost the candidate experience by ensuring your background check communications are personalised, professional and branded.

While easily overlooked, a quick and painless background checking experience sends positive cultural signals about your organisation, showing that you care about both the experience of your people and the quality of your talent management processes.

2. Improving the quality of hires

At its most fundamental level, background checking helps you to verify candidate information provided throughout the application process. Unfortunately, ‘CV fraud’ remains an issue, as we found that over a third (37%) of candidates have exaggerated information on their CVs. At the same time, it’s easier than ever to fabricate highly convincing qualification certificates.

Conducting thorough education and qualification checks is therefore a must – no company wants to be in the position of hiring someone who is not adequately qualified for the role. It means extra time and money spent on training and development, as well as further recruitment. The Recruitment and Employment Confederation (REC) has estimated that the cost of replacing an employee at mid-manager level is, on average, upwards of three times the employee’s annual salary.

It’s also important not to underestimate the value of employment reference checks, especially when work experience is frequently treated on a par with qualifications when hiring from today’s pool of well-educated candidates. Speaking to former employers helps you to get a stronger sense of an individual’s working style and characteristics, making it easier to assess whether or not that person would be a suitable fit for your organisation.

However, remember that background checks should also be conducted in proportion to the role in question. For example, it would be appropriate and necessary to conduct a credit check on someone applying for a position like Financial Director or its equivalent, but not for someone applying for a position with little involvement in managing company money.

On the other hand, if you’re hiring for a director-level position, you’re strongly advised to carry out a ‘Directorship Search’. This verifies that a candidate has previous directorship experience, and can be also used to identify potential conflicts of interest and other important reasons to disqualify the individual from the role.

A tailored and expert-led approach helps to streamline the process by focusing only on the important checks, while being thorough enough to support high quality hiring.

3. Ensuring regulatory compliance

The legal environment for employment is constantly changing – and background checking is a process which must be undertaken in strict accordance with a plethora of rules. Many organisations won’t have the specific in-house legal expertise to keep track of everything, especially because while specific roles require specific checks, they can also be affected by specific regulations.

There is a common misconception, for example, that right to work checks only apply to employees being hired from abroad. In fact, they must be carried on any and all employees, regardless of ethnicity or nationality. Another important example is that senior managers at organisations in the banking and financial services sector must be approved by the Financial Conduct Authority (FCA) or Prudential Regulation Authority (PRA) before starting in their roles.

You should also be aware of the legal implications of going too far with your background checks. For instance, businesses thinking about adding online media checks to their standard background checks routine might want to think twice if they are actually necessary for every role. A person’s information revealed through online media – such as race, religion, disability, and sexual orientation – can’t be seen to influence a hiring decision, or else a candidate could claim that discrimination has taken place. If it’s deemed necessary to check a person’s social media profiles, remember that under GDPR you must secure consent from the candidate before doing so.

In summary, employee background checking is far from a tick-box exercise, and businesses without a clear and consistent approach to background checking should seek out expertise and best practices. In a candidate-driven, highly regulated environment, your approach has the power to either dramatically improve the quality of your recruitment process – or to derail it completely.

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