Background checks are important for any company that wants to ensure they’re hiring only top candidates. But although 40 percent of resumes contain untruthful information, a new study finds fewer employers have been using background checks during the hiring process. 
A study by the Society for Human Resource Management (SHRM) found that more than one half of respondents–53 percent–said they don’t use credit background checks when hiring. This is contrasted with 40 percent of organizations not conducting credit checks in 2010, and 39 percent in 2004.
Credit checks are reports that include identifying personal information such as your address, previous addresses, and social security number. They also include your finances, such as credit card debt, student loan debt, mortgages, car payment, defaulted loans, late payments, and more.
In a second survey released last week, SHRM found the percentage of employers that don’t conduct criminal background checks has increased as well, from seven percent in 2010 to 14 percent this year.
This shift may be attributed to the fact that employers are finding much of this information to be unimportant when compared with a candidate’s skills and experience.
“Human resources professionals are looking more closely at the job-relatedness of these practices,” said Mark Schmit, vice president of research at SHRM. “As a result, fewer employers are using background checks, and checks are often done for specific jobs or to comply with the law.”
Still, there are various reasons an employer may decide to take these precautions. These types of checks are used to reduce legal liability for:
1. negligent hiring (according to 52 percent of respondents)
2. ensuring a safe work environment for employees (49 percent)
3. theft prevention (45 percent)
4. reducing liability for negligent hiring (22 percent)
Although these types of checks can be intimidating, employers aren’t likely to completely throw out a candidate based on them. Previous work experience, a good fit for the job and company culture, and specific skills are still the most important factors that influence hiring decisions. In addition, 80 percent of employers report having hired a job candidate whose credit report contained unfavorable financial information.
You can read more about SHRM’s findings here and here.
How often does your organization conduct background and credit checks? Have you ever neglected to hire a candidate based on your findings? Share your stories in a comment below!
