Why is Background Verification Important for Growing Businesses?

Introduction

For a startup or a growing business where the core team dons multiple hats, hiring the right candidate can affect a company's growth to a great extent. Startups and growing companies are often cash-crunched and cannot afford to invest in candidates with discrepancies. Hiring a candidate solely based on their resume can sometimes backfire and cause a fortune to the business.

 Table of Contents

1. Background verification – a growing trend
2. Importance of Background Verification for Growing Companies
   • Safeguards company assets
   • Prevents risk of negligent hiring
   • Enhances quality of hiring
   • Provides safety and security
3. To Sum It Up

1. Background verification – a growing trend

   A recent survey by the Professional Background Screening Association (PBSA) and HR.com showed 94% of employers conducted at least one type of background screening, while 73% had a documented policy for background screening procedures. The documented policy includes criminal records, employment history, education background, certifications and social media check.  

   In a growing economy of new startup businesses, background verification has become an imperative process to weed out misleading candidates. Moreover, to keep fraud away, more businesses are opting for background verification companies to screen their candidates pre-employment.
    

2. Importance of Background Verification for Growing Companies  

   Here are some key reasons that account for the Importance of Background Verification and explain why background verification is essential for businesses:

   • Safeguards company assets

     A thorough background check of employees will ensure safety of companies’ reputation. A company is made of and known by its people. Employees with bad reputation can affect a company's reputation and reliability. Background verification can help avoid hiring such candidates.

     Take the example of Tata Motors, “We consider this as an investment as background checks help in safeguarding organizational assets, promoting safety at the workplace, reducing turnover owing to right hiring, safeguarding company reputation, avoiding legal action and inspiring confidence in customers and shareholders,” said Gajendra Chandel, chief human resource officer.

   • Prevents risk of negligent hiring

     Negligent hiring can cause great harm to business, employees and clients. Candidates tend to lie in their resumes - wrong information of work experience, forged documents, hide criminal history, identity theft. A candidate may fit an employer’s skills requirements but could have questionable records. Only background checks can reveal this information; ensure a safe work environment and prevent incidents that may affect a company's credibility.

   • Enhances quality of hiring

     Another fact that attributes to the importance of Background Verification is how thorough background checks can provide information about candidates’ past employment and performance. This can ensure hiring honest and trustworthy candidates. Background verification especially matters when hiring for senior management roles. Several factors are to be considered when hiring for a senior management position - leadership qualities, strong emotional intelligence, qualitative and quantitative performance of the past and more. Background checks help make informed decisions.

     E.g., a partner at the venture capital firm, Lightbox Ventures said, “The impact of senior management hires is massive in a company’s evolution. You need to have a thorough understanding of that person’s integrity and values. The more companies align on that right from the beginning, the better it is for all concerned.”

   • Provides safety and security

     Honest employees who gel well with the company's culture are valuable assets. However, hiring for certain industries may require more vetting than the others. Think transportation, finance, day-care, healthcare, and education, where employees are in direct contact with customers. Employees who may have access to sensitive customer information can be a threat to their safety.

     Let’s look at how some growing startups tackle this challenge. Food delivery company Zomato, rejects about 25% applications due to various reasons such as unavailability of proper documents, failure in background check clearance, and lack of right intent to work as a delivery partner.

     While startups are a booming landscape of new employment opportunities, inclusive of contract basis hiring. Contract basis or temporary hires can pose additional security concerns; hence it becomes essential to get them screened before getting them onboard for a project. An employee with discrepancies can instantly turn from being a valuable asset to a liability, risking the company’s credibility.

3. To Sum It Up

   The importance of Background Verification cannot be overlooked for startups and growing businesses. Background checks give a complete picture of candidates. It also helps companies build and maintain credibility with their clients. Opting for a background verification company will help filter out the worst, retain the best - key for a harmonious work environment and steady business growth.