Are Background Checks for Small Businesses Necessary?

Are Background Checks for Small Businesses Necessary?

Knowing a potential employee's history is essential for employers of any size, but background checks for small businesses are even more important. With so few people on hand, every employee needs to be reliable...especially if they'll be handling finances or sensitive information.

Many small business owners hesitate to run background checks due to the expense but background checks don't need to be expensive. More importantly, the cost of missing something crucial can be devastating in the long run.

Take the example of a recently hired sales manager who took off with $2 million dollars – and who had done so previously at another company. A simple background check could have prevented this heartache.

The potential costs of not running a background check don't stop there. Replacing an employee who doesn't work out can cost 50% or more of the individual's salary, according to the Small Business Administration. And what about lawsuits? Most small businesses don't have the funds to go through long litigation processes due to negligent hiring. Running a background check – and doing so within the confines of the law – can protect you from these unexpected expenses.

Types of Background Checks Small Businesses Should Consider

Firstly, small business owners need to think about the responsibilities their individual employees will have in their roles. Next, it's important to think about which type of background screening makes sense for those responsibilities.

For example, if a business is hiring a delivery driver, it's important to check that person's driving record and criminal record. But, it doesn't make much sense to check an accountant's driving record--it makes more sense to check their credit report.

Of course, every business' needs are unique, so choose the background check that makes the most sense for your business. Small business owners can use the list of background screening options below as a starting point when figuring out which background check makes the most sense for their employees.

• Criminal records
• Driving records
• Credit Report
• Drug test
• Sex offender status
• SSN validation/work eligibility
• Education records
• References

So, Are Background Checks for Small Business Necessary?

Small business background checks are extremely necessary. For a small cost, small businesses can gather more information about applicants' past and make smarter hiring decisions. Avoiding this step doesn't only put your staff at risk, it can also lead to crippling expenses down the road.