SmartRecruiters Blog

3 Powerful Reasons Why You Should Run a Background Check on Your Candidates

Every employer knows the costs of a bad hire. The impacts are accounted for in time, money and morale. The financial costs in particular are severe: recent estimates from the Association of Certified Fraud Examiners’ Report to the Nation indicate that a typical organization loses 5% of its revenues each year to occupational fraud, with more than 20% of the cases suffering over $1 million in losses. As a result, a bad hire can be crippling for businesses large and small.

In the US, background checking has proven to be an enormous benefit to employers in mitigating this risk. A report published by HR Management Magazine documents the ROI of dollars spent on background checking as 937%. According to the US Small Business Administration, for every dollar an employer invests in employment screening, the return on investment ranges from $5-16, resulting from improved productivity, reduced absenteeism, lower turnover – and decreased employer liability. The economics of background checking are simply too striking for employers to ignore.

Here are three powerful reasons why you should run a background check on all your candidates:

1. Hire legal workers

Hiring someone without the right to work in the US could get you fined up to $10,000 per employee. According to a 2013 report by the Department of Homeland Security, the estimated size of the illegal immigrant population living in the US was 11.4 million. Unauthorized immigrants account for about 5% of the US workforce, with the highest concentrations being found in California, New York and New Jersey.

Running a “Right to Work” check takes just a few hours and gives you the peace of mind to hire with confidence.

2. Hire safe workers

Ensuring the safety of workers is a key responsibility for all employers. According to the National Employment Law Project, over 65 million individuals in the United States have a criminal record and almost 1 million of those are registered Sex Offenders. For certain roles, such as those which involve contact with children or the elderly, criminal background checks are a legal requirement, but it is recommended that all employers carry out a basic level of criminal check on their employees. Employers in the delivery, transport or car-sharing space are also advised to carry out “Driving Record Checks” to ensure that their drivers are safe and qualified to drive.

3. Hire honest workers

In the 2014 Global Fraud Study, survey participants estimated that the typical organization loses 5% of revenues each year to fraud. The median loss caused by the frauds in the study was $145,000 and 22% of the cases involved losses of at least $1 million. Whilst the impact is severe for all businesses, it is the smallest organizations which tend to suffer disproportionately large losses due to occupational fraud. Many organizations spend a lot of time and money to recover the costs of fraud but are often unable to do so completely. At the time of the survey, 58% of the victim organizations had not recovered any of their losses due to fraud, and only 14% had made a full recovery.

It may not be possible to predict the future, but it is possible to be informed of the past. Many cases of occupational fraud are linked to other crimes such as identity theft. By running a simple SSN Trace and “Document Image Check”, you can be sure that your future employees are indeed who they say they are and thereby less likely to pose risk to your business.

Ready to make background checks an essential part of your hiring?

To prevent these risks, there’s a clear need to put systems in place to prevent employee malfeasance and minimize the costs of bad hires. In the past, recruiters had to carry out background checks manually and manage several processes in order to do so. Today, there is an easier way: you can deploy background checks in seconds. Onfido, the leading background check provider integrates seamlessly with modern ATSs like SmartRecruiters, and allows you to run faster background check, in just one click.

Onfido’s integration with SmartRecruiters empowers you to incorporate background checks directly into your hiring workflow and see the results right from the candidate profile page inside SmartRecruiters.

To start requesting SSN, Document, National Criminal or other background checks, head to Onfido’s page in the SmartRecruiters Marketplace today.



This article was written by Husayn KassaiCEO and co-founder of Onfido. Onfido delivers next-generation background checks, helping the world’s most innovative businesses verify anyone, anywhere. Built on intelligent technology and supported by specialists, Onfido is a faster, simpler and more cost-effective way for businesses to carry out identity verification and adverse history searches on their applicants. Onfido works with over 600 clients globally, including Morgan McKinley, RelayRides and Handy.

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Husayn Kassai