Let’s set the scene: You’re searching for a great new employee to fill a currently vacant position. The person who gets the job will play an important role on the team. You’ve been combing through resumes, lots and lots of resumes. You’ve even got a few applicants that seem like real contenders. You call each person in for an interview. Each applicant has different talents and gifts in unique ways. What do you do?

You want to make the right call for your team and your company. You know that hiring the wrong person could be a disaster. It sounds like your next step could be running a background check on the applicants to see if any clues about their lives sway you to make a decision one way or another. About two-thirds of all organizations run background checks on all job candidates. So you’re in good company thinking you need more information. But watch out, you can’t use all of the information you can find in background checks to make the decision. Let’s get you up to speed on what you need to know about running background checks.

Why run a background check?

Hiring isn’t cheap, and it takes a lot of time. You have to write job descriptions, advertise the open position, field applications, review resumes. And that’s all on top of your day-to-day work. Making the wrong decision about who to hire can hurt your company. It not only affects finances related to salary and benefits, but hiring the wrong person could potentially lead to lawsuits, harassment issues, and a poor reputation with customers.

A background check can help you see if the applicant made any fraudulent claims during the interview process. By checking the information they volunteer against the information reported by various agencies, you can get a baseline understanding of how honest and forthright job applicants are.

In addition, some job types require you to run background checks. If the candidate is going to work with kids, the elderly, or people with disabilities, you must run a background check. Some companies also require the check if they need a certain level of security clearance. You’ll want to be sure your applicants are professional and can be discreet about confidential matters.

What information do you need to know?

There are all sorts of background checks you can run. The ones you should use depend on what you need to know about your potential employee.

One thing to be sure of, though, is that you are fair when it comes to running background checks. All applicants for the same job should have the same reports run. According to the FTC it is

“…illegal to background check based on an applicant’s race, national origin, color, sex, religion, disability, genetic information (including family medical history), or age (40 or older)”.

Background checks can provide you with information about

  • Education
  • Past employment
  • Criminal history
  • Medical records
  • Credit history
  • Military service
  • Workers’ compensation reports
  • Driving records
  • Court records
  • Property ownership
  • State/professional licensing
  • Character references
  • Drug screening

A few notes on what you need to know about the above reports

  • School records cannot be released without the applicant’s consent.
  • You should be careful when looking at criminal records. Consider when the crime was committed. If you have any concerns about this report, speak with the applicant to get clarification.
  • You are only allowed to use medical records as a reason to deny a job if they show something that is limiting to the activities of the job. Otherwise, the American with Disabilities Act makes it illegal to discriminate based on mental or physical impairment.
  • If you don’t hire someone based on information in their credit report, you must notify them why you’re running the report and advise them that they may challenge the report.
  • Full military service records require applicant consent. However you can sometimes have name, rank, salary, duty, awards, and status in a background check.
  • Workers Comp public records can be released. Like medical records, though, you can use the information to choose not to hire only if the injury would interfere with the job.
  • Character references are a background checks that include interviews with “neighbors, friends, or associates” about your “character, general reputation, personal characteristics, or mode of living”. That is a “investigative consumer report” according to the Fair Reporting Credit Act. This can include your past employers.

Tips to get started

After reading all this, are you beginning to get the feeling that you shouldn’t go at it alone? We highly recommended that you get help from your company’s human resources specialists and legal department when it’s time to conduct a background check. If you’re a small business owner and you are the HR and legal department, consider using a licensed background check firm. These companies specialize in running background checks and can advise you of all the legal ramifications of doing so. Some may even help you analyze and understand the reports that come back.

5 elements summing up what to keep in mind during the background check process:

  1. Keep it fair. All applicants should recieve the same reports run.
  2. Obtain a legal release from applicants to run certain checks.
  3. Inform applicants of their rights.
  4. Provide copies of reports to applicants if you used any information against them.
  5. Communicate with the applicant. Remember that things you find may be irrelevant, wrong, or taken out of context.

It’s important to find the right candidate for the job. And in many cases running background checks give you a full picture of an applicant’s pattern of behavior—something that’s impossible to glean from a few interviews. When you gather the information legally and use it fairly, you ensure that you don’t make avoidable hiring mistakes.

Lisa Andersen
Lisa Andersen Content Editor
Part of Planday’s content team in Copenhagen, Lisa is into yoga and loves good writing. Her experience includes working with communication and PR for international grassroots organizations in Argentina and Bolivia.