The Importance of Background Checks while Hiring New Employees

What are Background Checks?

In recent years, corporates have been conducting background checks on potential recruits. Before we launch into a discussion about the importance of these background checks, we will first explain what is meant by background check. To put it simply, the process of verifying the credentials of new and potential recruits before they are hired constitutes the process of background checks. Further, background checks are also used to not only to verify whether a particular employee has indeed graduated from a particular college or worked in a particular company, but also to refer to the references that the employee has provided to get an idea about his or her trustworthiness and personality.

In other words, background checks are used to determine the integrity and employability of a particular employee by verifying the credentials supplied by him or her and checking them against the actual records. This practice has become common all over the world as many candidates are found to have been fudging their credentials leading to their detection later on during the career and resulting in embarrassment and inconvenience to the companies. It can also lead to scandals when employees have been found to faked their education and experience details.

Background Checks around the World

Apart from this, background checks were also the norm in the United States and in Europe where centralized databases exist that store the records of all registered employees of the workforce. For instance, the social security number is used to identify an employee in the database that has all details of his or her education, experience, credit history, details of any brush with law enforcement, and any other pertinent or relevant details. This has helped the companies in the US and in Europe to detect fake profiles of employees and to understand whether potential recruits have been truthful in their declarations before the companies. On the other hand, in Asia (especially in China and India), these background checks were hitherto restricted only in special cases where the companies on suspicion of a particular employee wanted to find out about him or her. However, in recent years, many multinationals have found it prudent to run background checks on all potential recruits as the incidence of employees faking their credentials has become common. Apart from this, the fact that many employees in these countries often change jobs means that there is a need to know the reason for these shifts as the possibility of dubious exits is very real.

The process of Background Checks

The next aspect about running background checks is that corporates usually outsource this process to dedicated service providers that have access to the databases and work force to handle requests for background checks. Of course, many multinationals like Fidelity do this process in house, as the number of employees on their rolls is manageable as far as running background checks is concerned. Many domestic companies still perform cursory checks because they do not have the resources or the time to conduct extensive background checks. This is the reason why large Chinese and Indian companies often have many employees on their rolls that are not what they claim they are. Without getting into the ethical debate, our suggestion is that all companies should conduct background checks as otherwise they would be having a problem on their hands when the past of the employees becomes public in cases of employees with dubious histories.

Concluding Thoughts

For all those students and potential corporate employees, here is a piece of advice. Be careful when you are posting all kinds of stuff on social media as the process of the background checks often involve parsing through the web and online information provided by the potential recruits. Therefore, the next time you want to rave about that rave party where you had a gala time, be careful about what you post online as that can be found during the background check. Finally, remember to be ethical and straightforward about what you declare on your resumes and application forms as otherwise you might get into trouble with your dream companies.

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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.