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Why Employers Run Background Checks

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There are many great reasons why employers run pre-employment background checks. Background checks empower employers to make smart employment decisions without being limited to just the information that is supplied by the applicant. The adage that an ounce of prevention is worth a pound of cure, could be no more applicable than in the hiring process. The cost of a background check is only a fraction of the financial setbacks associated with bad hires. Below are six ways background checks help employers:

1. Control Internal Theft

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Most business thefts are carried out by insiders. Criminal background checks and past employer verifications help forewarn employers of potential thieves. According to the American Management Association and the US Chamber of Commerce 30% of all business failures are caused by employee theft.

2. Bad Publicity

Your employees are the front line of your company’s brand and reputation. Bad publicity caused by unscrupulous employees can have long and far-reaching effects. Looking into one’s background provides insight into that person’s future performance.

3. Assure Job Competence

Statistics show that nearly half of applicants have “significant” embellishments in their resumes’ work experience and education achievements. Employment and education verifications give employers the full picture.

4. Lower Job Turnover Rate

Troublemakers, especially the violent ones, lead to increased job turnover. A toxic work environment creates an unsafe environment which too often causes the better employees to leave the company.

5. Reduce Negligent Hiring Risks

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Background checks are often the best way to show due diligence in protecting employers from negligent hiring cases. Employers have a “duty of care” to protect staff and the public from persons that they knew, or should have known, pose a risk.

Suppose an applicant is hired who has a history of assault cases but an employer chose not to run a background check. The employee commits a similar crime to the one committed in the past. The employer becomes an easy target for damaging negligence in an employment lawsuit.

6. Avoid Rejected Applicants

Nearly all US companies use background checks as a part of their screening process. Employers who choose not to screen take the increased risk of hiring people that were turned away by more informed employers.

According to a group survey by and PBSA, 96% of employers conduct employment background checks.


Practicing regular background checks by employers ultimately benefit the organization. ClayHR’s integration enables you to conduct background checks for applicants. This gives you a detailed background report of candidates, further streamlining the overall hiring process.

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