The Hidden Cost of a Cheap Background Check

An employer’s needs of a background check can be different based on a variety of factors such as: industry requirements, organizational preference, culture and budget. These factors can lead to choosing a vendor that was willing to offer the lowest price. At that point everyone is happy! HR gets a new vendor, accounting is thrilled to save money and there is optimism that the hiring process will be improved. Once the honeymoon phase is over you may see some of the hidden costs of these cheap background checks.

Understanding how background checks are performed.

Some HR professionals understand the details of a robust background check packages while others are not sure what searches are being performed. Many conversations that we have end with HR saying “I don’t even know what is included with our background check”. Either way, it is good to have an understanding that not all background checks are created equal and that some vendors are cutting corners with background check services in the following ways:

Some limit the amount of phone calls, some aren’t even willing to call.

When it comes to verifying searches such as: county court records, professional references medical tests, etc. there can be significant time gaps between the data source and the background check company. In most instances, the best way to speed up the hiring process and verify the information that is needed is by making a phone call. Some background check companies have in their agreement that they will make a limited number of calls; some aren’t even willing to pick up the phone! These gaps in time can significantly increase background check turnaround times, or worse, mark searches as “unable to verify”.

Database only criminal record searches.

Yes, some background check companies are still just performing a database only criminal record search. These low-cost, and sometimes instant, criminal record searches are not always up-to-date and can be missing critical information. Conversely, these databases can provide outdated information such as offenses that should no longer be reported. Additionally, database searches are indexed by name only.  This increases the odds of reporting criminal information for the wrong person.  Many companies provide results from databases with disclaimers rendering the information useless in hiring situations. These factors can lead to an inexpensive yet inaccurate criminal record background check.

Outsource the verification work… to the applicant.

At this point in the recruiting process the applicant has most likely completed an application, submitted references, attended multiple interviews and performed data entry in order to start the background check process. In particular instances, to order to save money, some background check companies refuse to use readily available verification services to confirm searches such as employment verification. In one example, some applicants are asked to find and send W-2 information for fast-food roles that they held many years ago. This process type increases report turnaround time, risk inaccurate information and give the applicant a bad impression about the employer.

Outsource the verification work… back to HR.

Do you ever find yourself performing what you thought the background check company was paid to do? Some background check companies offer tiered service pricing which forces HR to perform some of the verifications themselves. These kind of activities force HR to take time away from both priorities and goals causing less productivity from the department as a whole.  

So, when looking to make a change for your background screening process, make sure you look past price at the bottom of the quote. It may end up costing your organization much more than that.

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