SmartRecruiters Blog

Best Practices For Building An Effective, Compliant Background Check Policy

This is a guest post from our friends at GoodHire.

For many HR professionals, just getting a background check completed is enough. But the actual best practices around getting them are usually at the bottom of a professional’s priorities.

Ignoring best practices though, is an increasingly risky proposition. For one, it opens your company to legal risks, as violations of the federal Fair Credit Reporting Act have become a trigger for lawsuits. Furthermore, background checks are often the last step in the hiring process, taking place just before onboarding starts. The last thing any employer wants is for mistakes in the background check process to delay a new hire or jeopardize the relationship in its early stages.

To stay safe, keep these best practices in mind as you implement or update an employment-screening policy in your company.

Make It Company-Wide

Create and apply background check policies across the whole company, even for executive management. Even high-level executives have fluffed up their career details that could damage a company’s reputation.

On average, supervisors spend 17% of their time managing poorly performing employees. In the same survey, 95% of employers said that a poor hiring decision affects the morale of the whole team. Ensuring that the people you hire have the correct qualifications saves time and effort, while preserving company morale.

Company-wide policies can (and should) be role specific. For example, when hiring someone who will handle money, an employment credit report, a criminal record check, and an education check are all appropriate. However, a credit check isn’t necessary for an employee who won’t deal with money or financial information.

Be Consistent

Pre-employment background screening must be consistent. Most negligence lawsuits stem from inconsistency in applying HR policies. Inconsistent enforcement opens the door to discrimination charges, and background screening is no exception.

Set up guidelines for the type of screenings your company will conduct for different employee levels, and keep this process consistent across all candidates within those levels. Two candidates applying for the same position should undergo the same background checks. Screening all potential candidates according to your established policy within each level can help ensure you’re treating all candidates fairly and applying policies consistently.

Make Sure Your Screening Is Compliant

The final, and perhaps most critical, aspect to incorporate into your background screening policy is compliance with federal, state, and local laws. When hiring a new employee, all background checks conducted must be compliant with federal Fair Credit Reporting Act (FCRA) guidelines. The FCRA requires that employers get candidate’s’ consent before running background checks and mandates a specific set of steps employers must follow if the background check returns information that will affect the hiring decision.

GoodHire’s compliance team reviews its processes to make sure they comply with the FCRA and provides with information and resources to help employers and hiring managers understand the regulations that apply in their states.

Take a look at your background-screening procedures. Are they company-wide, consistent, and compliant? If so, you’re on the right track.

SmartRecruiters’ customers can administer GoodHire screens and review results seamlessly through SmartRecruiter’s Talent Acquisition Platform.

Kim Moutsos