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Would you trust a doctor with fake diplomas or an accountant with a track record of fraud? What about a delivery driver with a suspended license? These scenarios aren’t made up to scare you, they’re real cases that illustrate why background checks are important in business.
For early-stage startups, the first few hires set the tone for your company’s culture and a setback from a bad choice could get in the way of scaling operations, ruin your reputation, or, worse, kill your company.
In this blog post we’ll cover:
- Background checks 101
- Why checks are important
- How to choose a screening vendor for your startup
- How Certn’s online process can help
Background Checks 101
This is a good place to start.
A background check is a formal investigation into someone’s history. If that sounds scary, maybe it’ll help to know that they’re a common part of the hiring process in North America. According to the Society for Human Resources Management (SHRM), over 90% of employers run background checks. In hiring, these checks are often used to verify a candidate’s qualifications, employment history, and criminal background.
Depending on the laws in your area, background checks are also used by landlords and government agencies. Landlords might screen potential tenants to assess their rental history, financial stability, and criminal record. Whereas government agencies and military organizations run checks before issuing security clearances.
Why Are Background Checks Important
In discussing why background checks are important in business, safety and security often comes up. It’s true: screening can help you identify individuals with a history of violence, fraud, theft, or other criminal activities that may post job-relevant risks. This is important when hiring for roles that involve financial responsibilities or access to company property.
Though, there are even more reasons why startups should implement background checks, even at the early stage.
Cybersecurity
Certain positions may involve access to sensitive information, trade secrets, or confidential data. Background checks are important in business because they can help ensure that people with a trustworthy background are placed in roles where security and confidentiality are paramount. According to IBM’s The Cost of a Data Breach Report 2023, breaches cost companies US $4.45M on average – an all-time high in all IBM’s 18 years of reporting on global statistics. Though relatively rare at 6% of all breaches, attacks by malicious insiders cost the most at US $4.9M, which is 9.6% higher than the global average cost of USD 4.45 million per data breach.
SOC 2 Compliance
Released in 2010 by the Association of International Certified Professional Accountants, Service Organization Controls (SOC) 2 is an internationally recognized auditing procedure that verifies that rigorous security controls and privacy standards are in place to protect sensitive information. A lot of enterprise clients only do business with partners and vendors that are SOC 2 certified, so for that reason alone it’s valuable. In our case, for our company to remain SOC 2 compliant, all our partners must be compliant too, and vice versa.
Demonstrating this kind of commitment to information security has benefits for any company because mishandled data can leave you vulnerable to cyber attacks and data breaches as discussed above. Beyond protecting your business from attacks and leaks, SOC can be a profit driver by distinguishing your brand as trustworthy and enhancing your reputation. If you’re trying to disrupt a highly regulated industry you may benefit from SOC certification because it gives investors and partners extra assurance. While background checks themselves aren’t explicitly required by the SOC 2 framework, they’re an essential component and they play a significant role in meeting the Trust and Security criteria.
Protect Brand Reputation
Many industries have established best practices and standards that recommend or require some kind of screening as part of the hiring process. Adhering to these standards is an obvious way to protect your company’s credibility and avoid legal repercussions or regulatory fines, but there are other ways that checks can help protect brand reputation.
Strengthen Investor Relations
Without a long-standing reputation or name recognition, startups can use checks as a way to demonstrate their commitment to responsible business practices and in turn enhance trust and credibility. Investors often look beyond financial metrics when evaluating startups – they assess your team's competence, integrity, and ability to manage risk. Therefore, background screening offers a tangible way for startups to set themselves apart and help build trust with customers, investors, and other stakeholders.
Manage Your Company Image
Startups are vulnerable to negative publicity and a single scandal involving an employee’s criminal past or unethical conduct could irreparably damage your brand’s reputation. The good news is that checks can help identify potential red flags before they become issues. As we covered in this blog post on why background checks are essential, background checks are important in business because they help you avoid association with individuals who could potentially harm your company's image.
It’s important to mention that while important, any employee screening must be conducted in a fair and non-discriminatory manner. This means following legal guidelines, being transparent with candidates, and obtaining checks at appropriate times in the hiring process. Don't worry, your background screening vendor can help with this.
How to Choose a Background Screening Vendor
As we’ve hopefully convinced you, checks are important because they provide you with extra information to help make more informed hiring decisions and reduce the risk of bringing on people who aren’t a good fit for your role.
There are many exciting vendors in the market to choose from, and on the surface screening may seem similar because they offer the same basic services, but your vendor should work for you. Below we’ve compiled a list of the top 10 questions to ask to determine who’s the best fit for your startup.
This list covers the basics but also considers turnaround times, pay-as-you-go flexibility, international services, cybersecurity standards, and integrations. This is where the best background screening vendor will stand out from the rest of the service providers out there.
Questions to Ask Your Background Screening Vendor
- How quickly can I get results? Your hiring decisions will likely be tied to the completion of background checks, so asking about turnaround times is important. Automation and other online features can help speed things up.
- Do you offer real-time tracking?
- What are the terms? Am I committing to a contract or is it pay-as-you-go?
- What kind of customer support is available? Is there help for me and my candidates?
- Which jurisdictions are you authorized and accredited in? This is important if you plan to scale your business internationally and/or tap into a global talent pool.
- Related to this, you should ask whether domestic and international background checks are available on the same platform – no one likes multiple logins.
- How do you stay compliant with national and international standards and how do you stay up to date with the latest industry regulations? This will make your legal team happy. Enough said.
- How do you communicate with your clients and notify them of any changes?
- Are there mobile capabilities for clients and candidates?
- Do you integrate with our HR tech stack? This is a big one. In order to help companies deliver the best candidate experience, Certn integrates with many popular hiring platforms. Combined with our industry-leading turnaround times, Certn’s checks support faster, more informed hiring decisions.
Industry-Leading Background Checks
So, this is why background checks are important in business. Adding checks to your hiring process is a strategic decision that benefits both your company's success and the well-being of your employees, customers, and clients. By running them before onboarding any new employees to your startup, you can mitigate risks and liability, stay compliant, and protect client and customer interests. If you go one step further and use Certn’s online background checks, you may even find efficiencies by streamlining your hiring process.
The experience matters. Building trust through background screening is important, but it doesn’t have to be hard. We know that 70% of applicants won’t apply if it takes too long and we apply this thinking to our checks – you and your candidates deserve a faster and easier experience.
In order to help companies deliver the best candidate experience, the Certn background check process is online. Plus, with features like SMS text invites, you can get candidates to complete their checks faster and decrease turnaround times by up to 35%. We also integrate with leading ATS platforms so you can seamlessly add the check step into your hiring workflow. It’s how we help you protect your business without slowing you down. A win-win.
Why wait? Talk to one of our screening experts to start using the world’s easiest background checks today.
Written by: Andrew McLeod, CEO and Co-Founder, Certn
Certn offers better and faster experiences for everyone. Certn is revolutionizing background screening with the easiest-to-use online platform, 24/7 customer support, and fast and compliant results from global databases. Why wait? Trusted by 20,000+ teams, Certn helps businesses hire faster and manage risk — all while delivering user experiences that help them stand out.
