Are Background Checks Hurting You?

As HR professionals, you wear many hats and your role is constantly changing and evolving to meet the needs of your organization. Piggybacking this responsibility is the expectation that you maintain balanced levels of professionalism and equal opportunity.

I’d like to discuss something a little different today brought to my attention thanks to this great ERE article – its primary focus is to make employers more aware of how to use the authority associated with pre-employment credit checks responsibly.

Credit checks have the potential to make or break a candidate when it comes time to hire

According to a recent SHRM survey, 47 percent of all companies use credit checks to evaluate a candidate’s eligibility for hire in at least one or all open positions. Demos survey indicated that 1 in 10 job applicants were declared unfit after employers reviewed their credit history. This data suggests that credit checks have the potential to make or break a candidate when it comes time to hire – even if he/she may be the perfect fit for the job.

So what does this mean for you as the hirer? For starters, you need to understand enough about a credit report to read it accurately and you better be certain that the report your background check provider is using is current.

Here are a few tips to keep in mind:

Relevance

How relevant is the data to the position? I’ve touched on this before in my Ban the Box post, but whenever you’re making a decision that dictate’s an applicant’s future at your company, please ensure that you’re taking into account all the circumstances surrounding their situation and whether or not those circumstances actually make a difference for the position you’re hiring for. If you don’t understand something on their credit report, then reach out to your background check provider before jumping to conclusions otherwise, you’ll likely miss your opportunity to nab that diamond in the rough employee.

Necessity

I want you to stop and think to yourself whether or not you feel it’s necessary to conduct a credit check to fill this position. I only ask because in my ten years of working with HR folks, I’ve noticed that so much of what they do is based on what the person before them did which was designed by the person prior to them, etc. Times change and trends evolve. If you eliminate credit checks, it has the potential to save you big bucks. Plus, there’s not a whole lot working in its favor since to my knowledge, no study has ever substantiated the link between higher credit equaling better job performance. Also, you have to be careful with discrimination. It’s likely that protected classes and single mothers could have lower credit scores and without proper care on your part, you could get yourself into an uncomfortable position or maybe even a lawsuit someday.

Like I mentioned earlier, the key is to cushion yourself with as much knowledge about the process as is possible. One of the best ways to do this is to select a background check service that will take the time to walk you through the information they provide.

ApplicantPro’s Background Specialists offer these tools affordably so contact us to learn more about how you can protect both yours and your company’s interests today.