How Should Businesses Conduct Background Checks In the Post-Pandemic World? It's as important as ever to protect the safety of current employees and management.

By Lucas Miller

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

The pandemic has proliferated a new and growing set of risks for organizations. In addition to scrambling for revenue gains amid changing landscapes, businesses must also figure out ways to protect their employees, consumers and assets from fraud, theft and cybercrime.

All of this makes background checks more important than ever, so long as companies do so with compliance. Here are somne of the numerous benefits of employment screening in our post-pandemic world.

Better-informed hiring decisions

Amidst a battered global economy, 10.7 million Americans were left jobless in 2020, representing an unemployment rate of 6.7%, according to Dec. 2020 data from the Bureau of Labor Statistics (BLS). These are precisely the kinds of economic conditions that can exacerbate theft and fraud both from within and outside of a company.

A 2018 study by the Statistic Brain Research Institute found that U.S. employees steal $50 billion annually, and 7% of revenue is lost due to fraud. It also takes on average two years to detect fraud. For retail and online businesses, common losses include inventory shrinkage, diverted payments and stolen equipment.

Related: Hiring Your First Employee

A background check can prevent questionable and potentially risky applicants from joining an organization. According to Workstream, replacing a fired worker costs 150% of their yearly salary.

Background checks allow organizations to source more suitable personnel that fall within a code of ethics. Screening also protects the safety of current employees and management, and that will lead to less turnover if colleagues are competent and pleasant to work with.

There are numerous options in terms of tools and services that can be used to conduct background checks. For instance, municipalities can conduct background checks at scale using services such as Intelligo, which utilizes AI to ensure speed and accuracy.

Companies and organizations on tighter budgets can make use of services such as UnMask, to conduct free searches to confirm the accuracy of information on a person's resume, or claims made during interviews, provided the intention behind the search falls under compliance.

Compliance with Ban-the-Box laws

In the United States, it's not possible to fully investigate someone without following legal procedures. When it comes to hiring, employers are limited by Ban-the-Box laws that restrict HR's ability to inquire into an applicant's criminal past.

Ban-the-Box legislation exists in 14 states and nearly two dozen cities, and these figures are set to change through the course of 2021. What's permissible depends on state and local regulations. Companies typically consult a legal expert to avoid costly fines and penalties.

Regardless, government restrictions don't eliminate the need for screening. Businesses can peer into a credit score and financial profile within certain limitation — so long as a recruiter complies with the Fair Credit Reporting Act (FCRA).

Consumer-reporting agencies can only share information with third parties if there is a permissible purpose. By conducting due diligence on potential hires, organizations can mitigate personnel-related risks. During the pandemic, common scams included fake government or healthcare communications (such as spam or telemarketing calls), phishing websites or emails, scam job offers and phony investments.

Incident prevention

In addition to looking into someone's criminal history, a background check can involve a credit score, past employment and litigation for the purpose of assessing someone's reliability as a potential employee. The point is, prevention is more effective than criminal pursuit after the fact, when some assets can no longer be recuperated.

While there are different rules that govern people screening, the process actually improves compliance. In the 2020 Global Benchmarking Report, HR professionals said regulatory compliance is their second most important business challenge. Moreover, 44% said that background screening helped improve regulatory compliance.

Related: How Can HR Professionals Be Helpful In Growing Your Company?

It helps to put candidates in the right role, given that many resumes contain inconsistencies and false claims. The verification of education, training, certifications and other credentials ensure that a company will make smarter hiring decisions.

Finally, a business can reduce negligent hiring claims that arise if a harmed employee asserts that an employer failed to conduct hiring due diligence. If a court sides with the victim, an organization would be liable for damages.

In the post-pandemic world, companies must remain vigilant in protecting their people and assets, and one of the best ways to do so is with the backing of background checks.

Lucas Miller

Entrepreneur Leadership Network® Contributor

Founder of Echelon Copy LLC

Lucas Miller is the founder and CEO of Echelon Copy LLC, a media relations agency based in Provo, Utah that helps brands improve visibility, enhance reputation and generate leads through authentic storytelling.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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