By Rhonda Campbell

It’s hard to manage a successful business, generating millions of dollars a year, if you don’t have employees. Hire the right employees and your business can grow substantially, taking you from a kitchen office to your own upscale storefront. The right employees can infuse your business with innovative ideas and engage customers, improving your branding efforts. Hire the wrong employees and your business can suffer significant damage, injury that could possibly cause you to have to close your business.

Popularity and Benefits of Conducting Employee Background Checks

Employee background checks have become increasingly popular for good reason. Businesses of all sizes are taking the time and effort to check out the background of prospective employees before they hire them. After all, once you hire employees, depending on how they perform, it can be tough to terminate them for cause. You can also run into other employment law headaches and roadblocks that can find you wishing you had taken the time to run a background check on a few troublesome employees before you brought them onboard.

You took the time to research the industry and market your business operates in, including performing quantitative and qualitative measurements on trends and projections, before you put hard-earned capital into your company. You also filed local and federal tax forms, license documents and created and submitted business plans to accountable lenders (e.g. banks, angel investment firms). Why put your hard work at jeopardy by running the risk of hiring the wrong employees?

Five Major Reasons to Conduct Employee Background Investigations

Following are five major reasons you should conduct employee background investigations:

• Decrease the likelihood that employees will steal company property, including money. If you conduct background investigations through the three major credit bureaus (TransUnion, Equinox and Experian) you can uncover poor credit histories on prospective hires. As with other background checks, be sure to comply with local, state and federal privacy rights and employment laws. Notify prospective hires that you are conducting the checks. Also get the written consent of prospective hires before you run the checks.
• Improve employee morale. Workers that have anger management and other poor social and communication skills can cause increased acts of violence at your workplace. Should employees get injured during altercations you could be held liable for covering the costs of treatments associated with the injuries.
• Strengthen company image. Let one employee commit a crime on company property and your business could get splashed across the news for all the wrong reasons. Criminal background checks can help you lower the chances of hiring people who have committed crimes in the past and who have not rehabilitated.
• Avoid costly lawsuits. Depending on the nature of employee infractions (e.g. sexual harassment, child abuse) you could be held liable for wrongs committed by employees and made to pay costly legal and court related expenses.
• Steer clear of employee relations issues. Workers with a history of problems can create employee relations issue that cost you manpower hours, decreased employee engagement and low employee morale.

Whether you use in-house human resource professionals or external agencies to conduct the checks you must follow certain local and federal laws. Check with your state’s labor department to find out specific laws in your jurisdiction. If you have a human resource or legal department, managers of those departments should be well versed in employment law, allowing them to offer you guidance around specific employee background check issues that arise at your company.

Rhonda Campbell, an East Coast journalist, is the owner of Off The Shelf radio and publisher of Long Walk Up and Love Pour Over Me.