What Should Small Businesses Check On Their Employees?

by Michael Klazema, lead author and editor for Backgroundchecks.com

The question in the title of this article is a common one, but not for the reason you might think. When you hear the question “What type of background checks should my small business run on employees?” you imagine that some invisible barrier exists between “small companies” and “large companies” that impacts which types of background screenings are and are not necessary.

The truth is, however, there is no such barrier. The benefits of running background checks are the same regardless of your business size (namely, that you can trust your employees), as are the consequences similar for failing to run background checks (embezzlement, negligent hiring lawsuits, and more).

Still, many small business owners ask this question, and usually, it’s because they simply don’t know that much about background checks or what they do.

There is a reason for this: small businesses tend to be newer and have much less well-defined policies across the board than large, multi-national corporations do. Quite simply, a small business requires a lot less organization than a big one, so guidelines for things like employee background checks are often a bit looser and more relaxed.

All of this boils down to one truth: you shouldn’t design your background check policies simply based on the size of your business. The number of employees you have on staff has nothing to do with whether you should run state criminal background checks or federal background checks. In all cases, the latter is going to be more thorough, and will stand a better chance of helping you uncover red flags among your employees. And in general, being more thorough with your background checks is better, no matter the size of your business.

The question you should be asking is which types of background checks are the most applicable to your business and what you do. And since small businesses are more likely to have one main industry than large ones, this question is a pivotal one for all smaller businesses to ask when designing background check protocol. Here are a few of the types of background checks you should consider, as well as which types of small companies will want to consider them.

Criminal Checks.

The definitive background check type, criminal background screenings are used by virtually every company that does any background checks. Finding out about someone’s criminal record can uncover anything from violent tendencies to a history of theft, both of which can serve as red flags that apply to most jobs. For instance, you’ll want to think long and hard about hiring a known violent criminal if your business focuses on customer service.

Past Employment Checks.

Here’s another background check type that is important for any job. You’ll learn about applicant job histories from resumes and job interviews, but by doing a past employment check, you can figure out if your prospective employee is lying to you about job titles, employment dates, salaries, circumstances of departure, and more. The specific information almost doesn’t matter: you won’t want to hire someone who lies to your face, and that’s true whether your business is large or small, and whether it’s a publishing company or retail general store.

Professional Licenses.

If there is one type of background check that is common among larger companies and rare among small businesses, it’s probably this one. Hospitals, law firms, and other similar organizations want to make sure their employees are properly and legally licensed before hiring them. For jobs in customer service, secretarial duty, sales, and more, this kind of check simply isn’t necessary. Still, there are smaller businesses that will want to do license verification checks, like independent medical practices.

Driving Record Checks.

Whether or not you will run this type of background screening depends entirely on the job at hand. If you are looking for a worker who is simply going to sit behind a counter and do clerical work then a driving check is irrelevant. However, if your business includes delivery drivers, chauffeurs, or other workers who drive vehicles (or even simply operate heavy machinery) while on the job, you should add driving record checks to the pre-employment screening process. You don’t want to be caught employing a driver with a suspended license, and you don’t want to be held liable if one of your forklift operators, a known drunk driver, hurts someone at work due to alcohol use that a background check could have predicted.

Credit History Checks.

Like driving record checks, credit checks should be run depending on the nature of the job at hand. Many larger companies will simply run credit history checks on everyone, but if your company is smaller and you are looking to save some money, just run credit checks on the workers who will have access to business accounts or money. This way, you protect yourself and your company funds from embezzlers, poor spenders, and other bad money managers.

Civil Background Checks.

Many companies struggle with civil checks regardless of their size, industry, or any other factors, and that’s simply because they are probably the most “confusing” checks out there. Civil checks look for any court cases your employees might have been involved with, including bankruptcies, evictions, lawsuits, and any other court disputes. Often, businesses — particularly small ones with less experience in the background check realm — don’t see the purpose of learning this information if it is not criminally related.

However, it’s important to remember that lawsuits are often highly publicized and can damage the reputation of your employees. By connection, then, such court disputes can tarnish your brand. The bigger and more visible your company is, therefore, the more you’ll want to think about civil checks.

As you can see, there are a great number of different background checks that you can run on your potential employees. You will have to pick which ones are necessary based on your own business. Contrary to the question in the title of this article though, your decision will be based not only on the size of your business, but also based on what your business does.

Michael Klazema has been developing products for pre-employment screening and improving online customer experiences in the background screening industry since 2009. He is the lead author and editor for Backgroundchecks.com.