The toughest part of launching many entrepreneurial ventures is attracting and hiring top talent to fill key positions. Background checks play an essential role in the process and can significantly affect your ability to get your business off the ground quickly and efficiently.
Before you dive in and start searching for applicants’ names online, it’s prudent to make sure you understand the need for thorough background checks — and the best ways to conduct them. Here are five key pieces of information to know prior to implementing pre-employment background screenings.
1. Background Checks Can Help Preserve Your Capital
In the tech bubble of the ’90s, “burn rate” often was viewed as a badge of honor in entrepreneurial circles. Today, however, most investors expect judicious use of their money.
Hiring, training and onboarding employees will constitute a significant portion of your startup costs, and you don’t want to go through the process more than is necessary. Surprises down the line — such as learning that a key hire falsified his/her resume — can cost you and your investors.
By working with an experienced background screening firm as part of your hiring process, you greatly reduce the risk of bad hires that can deplete your cash reserves rapidly.
2. You’ll Need Applicants’ Consent
Before you conduct any type of background checks, you should have applicants complete and sign release forms. Asking applicants to consent in writing prior to background screenings is an important step for limiting your legal liability.
On the consent form, spell out what information you will check and how you will collect the data. By disclosing your process, you give applicants the opportunity to opt out if they do not want you to uncover certain information.
Requiring consent also helps ensure that you are not subjected to privacy violation claims in the future. You can choose not to hire an applicant based on unwillingness to provide consent for a background screening.
3. You Must Treat Everyone Equally
Treating applicants differently during the application process can open you up to a lawsuit for discrimination. Equal treatment does not mean that you must treat every position within your company the same, however.
The Equal Employment Opportunity Commission notes that employers may not check backgrounds of applicants based on prohibited categories: disabilities, religion, race, national origin, age, color or genetic information. For example, asking only people under or over a certain age about criminal records could be considered discriminatory.
An experienced background screening firm can assist you with properly implementing non-discriminatory hiring practices.
4. Verifying Education Is Critical
If you’re just starting a business, it may come as a surprise that some applicants will fabricate information on their resumes. In fact, many job applicants stretch the truth, especially when it comes to educational credentials. Many employers simply don’t check, leading applicants to roll the dice in hopes that you also won’t do your homework.
You may be tempted to skip a thorough check if an applicant hails from a Fortune 500 company or has a reputation as a star programmer. It’s important to understand that even individuals at the top of their professions may lie on their resumes, and you don’t want to be surprised later.
5. Repeated Bad Behavior Signals Elevated Risk
You may choose to overlook some negative information that arises during the hiring process, especially if the applicant has highly sought skills. Certainly, you might consider looking past one-off indiscretions.
What should get your attention are patterns of bad behavior, such as repeated charges of driving under the influence. When you notice a pattern, you may conclude that the applicant has a problem that potentially could expose your company to legal liability.
Smart Hiring for Entrepreneurs
Of all the challenges you’ve encountered — and have yet to encounter — as an entrepreneur, hiring may be among the toughest. Searching for candidates, interviewing, and training employees can significantly impact your capital reserves and drain your valuable time. By conducting thorough background checks of your applicants, you help minimize risks to your company.