Why Careless Background Checks Will Cost You

Photo courtesy of Amtec.us
Photo courtesy of Amtec.us

Unfortunately, it’s not rare to hear horror stories involving bad hires, but what about horror stories involving bad background checks? Here’s what can happen when the background check you run on an employee returns the wrong results. That’s what happened with The Vanguard Group, an investment firm in Pennsylvania, when a routine background check returned the information that one of their brokers had plead guilty to loan and credit card fraud. He was fired on the spot.

The problem? The background check had tagged the wrong James. R. Gorman. The innocent Gorman had an entirely different SSN, birthdate, and address, but by the time he had challenged the error successfully, it was too late. He felt his career had been impacted. So he sued, costing the investment firm an undisclosed amount in reparations.

Vanguard was a large, established organization. This type of error should have been impossible, one my might think. So how do you avoid this same mistake? First, remember that the margin of error in background checks is as sensitive as a misplaced digit, but by following the correct steps, you can avoid costly mistakes.

These mistakes include:

  • Relying primarily on the Internet as a source. Remember that information on the Internet is easily manipulated.
  • Making decisions based on social networking sites.
  • Leaning too heavily on a subject’s personal references (often called character references).
  • Relying on previous employers’ due diligence. (Assuming they’ve done background checks and found the subject eligible.)

While these methods can inform certain aspects of your candidate’s personality and online persona, it will not provide you with concrete data about their eligibility. In fact, it can even introduce liability in the form of perceived discrimination if you let the information garnered on social media sites involving political or sexual orientation, even marital status, influence your decision. It’s best to invest in a thorough screening process that cross-checks its findings, especially in the case of negative results. By doing so you can rest assured that you’re making the best hiring decisions possible for the future success and longevity of your company.

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