Today, an estimated 90% of major employers in the country utilize employee background checks to ensure that their employees are being honest on their applications and that they’re a good fit for the business. These pre-employment screenings can look for fraudulent claims on an application, criminal history, financial history, and much more.

It’s important to take a closer look at just why it’s critical to utilize employee background checks, and what it really comes down to in most cases is cost. By thoroughly scrutinizing the background of the people you may hire, you’ll be able to ensure that you don’t cost your company money by making hiring mistakes. Here’s a look at some of the ways this is true.

Theft and Fraud – The biggest costs come from theft and fraud. Crimes like embezzlement can lead to hundreds of thousands of dollars, and employees do indeed commit these acts from time to time. While there’s no way to be 100% sure, it’s worth running a background check to reduce the chances of becoming a victim of fraud or theft.

Lawsuits – Sexual harassment, bullying, and inappropriate actions with clients or customers can all lead to lawsuits against the company – not just against the employee who perpetrated the actions. As a result, it’s important that you ensure you hire those you can trust to be responsible members of your team.

Noncompliance – Falling astray of regulatory compliance can lead to heavy fines and other penalties. As a result, it’s important that you make certain your employees don’t have a history of noncompliance and other regulatory issues.

Rehire – Once you finally terminate the problem employee, they still end up costing you money. The process of rehiring and retraining a new employee costs several thousand dollars over time, and as a result it’s important to hire the right person the first time – doing so lets you avoid the costly rehire procedure.

Once they’re on your team, proper management and information will help keep your employees on the right side of all the points above. But just hiring the right people is the first step you need to take, and it’s an important one. If you’re in charge of any business, it’s well worth taking the time to run a good background check before you hire any prospective employee. It can help you save money and reduce overall costs in numerous ways.

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