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Pre-Employment Background Checks: Small Businesses Need It

4 Mins read

Background checks are important to make sure that a potential candidate, being hired at an employment position, possesses all the educational and professional qualifications he/she has claimed in his resume during the interview process.

Employment background check or pre-employment screening also helps ensure that the candidate has a clean background without any prior record of criminal or unlawful activity.

Pre-employment background checks (including criminal background check and professional background check in some cases) is a standard process while you go through the recruitment process, specially in large size companies but should it also be followed by the small businesses?

This is what we are going to discuss in this article – Why do small businesses do background checks?

Why would an employer get a background check done?

An employer, when hiring a candidate wants to make sure that the candidate actually possesses all the necessary educational qualification, professional qualification, work experience and skills to carry out the responsibility he will be assigned at work, if hired. The employment background checkor pre-employment screening is the process that checks the legitimacy of the different educational and work related claims made by the candidates.

Due to unemployment and cut throat competition in the job market, candidates try to inflate their education, skills and work experience related claims, to get an edge over other candidates. This unfair practice not only hurts the chances of other eligible candidates but may also create work related issues if the candidate gets through the interview process with falsified claims.

To make sure that all the claims made by a candidate for his/her identity, educational qualification, work experience from past employments, skills and references are true, employers need to perform a thorough pre-employment screening.

Employment background check or pre-employment screening generally includesidentity check, criminal background check, educational / past employment check, professional background check and credit background check (in case of some finance / banking related employment).

What do businesses look for in a background check?

The process of background check should start as soon as you finalize a candidate to avoid post hiring surprises. Generally, hiring formalities and employment background check formalities go in parallel.

Finalized candidates are first asked to provide their identification documents, educational certificates, past employment related papers (such as experience letter, relieving letter, salary slip, etc.). The candidates also have to fill information in online of offline forms. This information is provided to a third party small business background check service provider, which independently conducts background checks.

Businesses try to look for the following in a background check:

Fake identity related claims: A candidate may be trying to get job using a fake identity and associated credentials, work experience and references. Employment background checks uncover the attempts of this kind of employment fraud.

Attempts of fake documents: Given the extreme competition candidates face during the recruitment and interview process, some candidates may choose to falsify their candidature with fake documents. A pre-employment screening can reveal such attempts by verifying the legitimacy and validity of the documents produced by a candidate.

Criminal history: Hiring a candidate with criminal history may not be allowed by your local/national law, depending on the type of the employment. Criminal background check for employment can reveal any such recorded criminal history events with law enforcement agencies. Generally, candidates have to go through a fingerprint background verification for criminal background check.

Bad credit history: Some banking and financial employment positions avoid hiring candidates with bad credit history. As a custodian of financial assets / instruments, a banking / finance employee is expected to be good at managing his/her own personal finance. Credit history checks can reveal poor credit history of a candidate.

What causes a red flag on a background check?

These days, background checks are generally outsourced to a third party agency specialized in the field of employment background checks. Passing your small business background check to a specialized agency not only helps you maintain background check compliance but also ensure efficiency and timely onboarding.

If any red flag found during the pre-employment screening, small businesses can have the screening agency to manage the further procedure such as pre-adverse action notice and so on. There is no standard definition of what should be considered a “red flag”, it depends on business type and the employment position. For example, for a banking or finance company, bad credit history can be a red flag, but for a transport company hiring a driver, it will not be.

However, following are the common red flags while performing the background checks.

Criminal records

In some job types, criminal background checkcan be a mandatory process to follow and if any instance of arrest or prosecution comes up during the criminal background check, it is a clear red flag. How a small business owner deals with the situation is entirely up to him/her. In some industry types, hiring a candidate with criminal history is prohibited by regulations. In other job types, the business owner may choose to consider the applicant’s candidature if the crime is not serious.

Claims cannot be verified

It is not uncommon to inflate claims about work experience, educational qualification and skills. Not all, but some candidates may choose this way to outdo the competition. This unfair practice, however, is a clear red flag as it can hurt your business objectives.

Professional actions

Many job types such as teacher, broker, healthcare, etc. require candidates to possess a valid professional licence. This professional licence is revoked if a candidate is not able to uphold professional responsibilities. If a candidate has faced disciplinary action, misconduct, disbarment or sanction in the past, it is a clear red flag. A professional background check can uncover such unfavourable professional actions.


Though some small businesses may deem the process of background check unnecessary due to the complexities and overhead it involves, hiring a wrong candidate can cause you a lot more troubles. In some scenarios, not performing small business background checks can lead to loss or business / revenue, missed deadlines, productivity related issues and even violence at the workplace. Superficially, small business background check may seem like an unnecessary process, however, it is bound to benefit your business in long run.

After working at Bayometric for nearly a decade, Tanvir has a good understanding of what it takes to ensure the security of a business. He likes to cover newsworthy events related to public safety, mass surveillance, cloud communication, cyber security, and BYOD. His articles give insights into the latest trends in the biometrics and identity management industry.

Background check stock image by Andrey_Popov/Shutterstock

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