A bad hire can cost your business more than just time. It can damage your reputation, disrupt your team, and significantly impact your bottom line. With the average cost to hire a new employee in the U.S. hovering around $4,700 and potentially reaching up to three to four times the annual salary of the position, making smart hiring decisions is just good business.
Enter the employee background check company.
These firms have become a vital part of modern hiring. However, as more businesses utilize these services, you need to understand what they do, how they differ, and what to look for in a partner.
Why Are Background Checks Important?
Ninety-two percent of employers conduct employment background screenings as part of their hiring, according to the Society for Human Resource Management (SHRM). The reason is simple: thorough background checks help you mitigate risk, confirm qualifications, and reduce the chances of hiring someone who might pose a threat.
The need is even more important now, where remote work has made face-to-face vetting less common, and resume misrepresentation runs rampant. Verifying a candidate’s history, whether it’s employment, education, or criminal record, is essential.
What Does an Employee Background Check Company Offer?
Employee background check companies typically offer a wide range of services designed to uncover relevant information about job candidates. These services may include:
- Identity verification: Confirming that the applicant is who they say they are
- Employment and education history: Validating claims made on resumes and applications
- Employee criminal background check: Screening for misdemeanor or felony convictions at the county, state, and federal levels
- Credit reports: With consent, employers can assess an applicant’s financial responsibility, which may be relevant for certain roles
- Civil court records: Including bankruptcies, evictions, or lawsuits
- Motor vehicle records: Especially useful for roles that involve driving
How Employee Background Check Companies Help Mitigate Hiring Risk
Hiring someone without conducting a thorough background check can lead to serious consequences. A well-executed background check can help you:
- Avoid negligent-hiring lawsuits
- Ensure a safe work environment
- Protect company assets and data
- Reduce turnover by making better-informed decisions
Choosing the Right Background Check Company
With so many options, picking among employee background check companies doesn’t have to be hard. Here’s what to look for:
Compliance with the Fair Credit Reporting Act (FCRA)
A reputable company must follow FCRA guidelines, which include getting written consent from candidates and providing them with a copy of the report if adverse action is taken. Both you and the company you choose have a legal obligation to comply with FCRA.
Data Security Standards
Ensure the company has robust security measures in place to protect sensitive candidate data.
Accuracy and Turnaround Time
Fast results are great, but not if they come at the cost of accuracy. Ask about their average turnaround times and error rates.
Transparency in Reporting
Clear, easy-to-understand reports make decision-making faster and more effective.
Customer Support
Responsive and knowledgeable support can be a lifesaver when you’re trying to move quickly. Make sure you can get help if and when you need it.
Range of Services
Look for a company that provides a broad range of services that fit your needs. You should also have access to top-tier providers. For example, for credit checks, you want to be able to choose from the top credit reporting bureaus: Equifax, Experian, and TransUnion. The best solution is a company that partners with all three, so you can check what you need through one company without having to go to different vendors.
Legal Considerations
Before running a credit or criminal background check on an individual, you must get prior written consent. Failing to do so can result in steep fines and potential litigation.
Also, be mindful of local and state laws, which may have additional requirements beyond federal regulations. For example, ban-the-box laws in some jurisdictions limit when and how you can inquire about a candidate’s criminal history.
Relying on non-compliant services or skipping proper procedures, such as failing to notify a candidate of a negative decision based on their background report, can expose your business to unnecessary risk.
Get Employee Background Checks
Employee background check companies have become an indispensable part of the hiring toolkit. A trusted screening partner can streamline your hiring process, improve candidate quality, and help you sleep better at night knowing your due diligence is done.
Looking for a reliable background check partner? Schedule a free consultation with Command Credit to explore compliant, data-driven solutions tailored to your business.