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How Big Does Your Company Need to be to Conduct Background Checks?

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We get this question all the time from potential clients... How big does my company need to be in order to conduct background checks?  Or they will say, "Our company is too small to need employment background checks."

The size of your company doesn't matter when it comes to implementing pre-employment background checks.  The risk factors that any new hire can pose to your organization are significant.  If you are a small business with ten (10) employees a rogue employee that steals from you will put you out of business.  An outsourced accounting consultant that embezzles from you can also put you out of business.


One could argue that the smaller businesses probably have more to lose by not screening potential employees than larger companies.  Also, the compliance and insurance guidelines for many small businesses to offer products or services to the Healthcare, Transportation, IT and Finance industries often require you to conduct background checks in order to be considered.

No matter the size of your company the risks are still the same.  These risks extend to your managers, employees, partners, and your customers.  Here is some TIP for small businesses looking to implement employee background checks.


6 Tips for Small Business Employee Background Checks

According to national human resource associations here are some statistics that you should review.

  • Average negligent hiring lawsuit settlement is 1 Million Dollars
  • Cost of bad hiring decision is 30% of first year’s potential earnings.
  • 79% of employers lost the negligent hiring case in court.
  • 53% (I’ve seen up to 70 in other articles) or applications/resumes contain inaccurate info.
  • 34% contain outright lies.
  • 2 million American workers are victims of workplace violence per year.
  • 2014 saw 403 American workplace homicides

It is important to keep in mind that as an employer you do not need to run the same type of background check on every employee.  As an example when you hire a warehouse worker you might check criminal records and pull a driving record.  If you are hiring a controller you might check criminal records, driving record, verify education, verify prior employment and run a credit check.

An employment background check is the most economic business insurance you can buy.  If you think about it a background check should cost less than $50.00 in most cases.

If you want to have a look at video that we made for small business owners on the 5 Tips and Tricks you need to know when it comes to Employment Background Screening click the link below.