The Importance of Background Checks When Hiring Employees

By Alan Miklofsky, 10/13/24

In today’s competitive business environment, hiring the right employees can make or break a business—especially for independent retailers and small business owners, where every individual plays a critical role. A well-structured hiring process, including thorough background checks, is not just about protecting the business from immediate risks. It’s also about securing long-term success by ensuring that each team member is reliable, trustworthy, and aligned with the company’s values.

Why Background Checks Matter

1. Safeguard Your Business Reputation
   Employees represent your brand. A bad hire—whether through negligent behavior, dishonesty, or misconduct—can damage customer trust and the reputation you’ve spent years building. A background check provides insight into potential red flags, helping you avoid situations where an employee’s actions could harm your business image.

2. Promote a Safe Work Environment
   Creating a safe environment for both employees and customers should be a top priority. Checking for criminal history, especially for offenses related to violence or theft, ensures the people you hire do not pose a risk. This is particularly important for businesses where employees interact with vulnerable populations or handle financial transactions.

3. Reduce Employee Turnover and Associated Costs
   Hiring the wrong person is expensive. Recruiting, training, and onboarding require time and money. A thorough background screening helps confirm a candidate’s qualifications and fit, reducing the risk of needing to replace them in the near future. This is especially important for independent shoe retailers, where high turnover can disrupt operations and morale.

4. Prevent Internal Theft and Fraud
   Retail businesses, especially those dealing with cash and valuable inventory, are vulnerable to theft and fraud. Background checks can reveal past financial misconduct or criminal behavior, helping owners protect their assets and maintain a sense of security.

5. Ensure Legal Compliance
   In many industries, background checks are not just a good practice—they’re legally required. Employers who hire without conducting proper screenings could face liability if an employee’s actions cause harm. Conducting background checks also demonstrates due diligence, protecting you from negligent hiring claims.

Types of Background Checks to Consider

• Criminal Records: To assess any past criminal behavior and ensure safety.

• Employment Verification: To confirm work history and detect résumé fraud.

• Education Verification: To validate degrees or certifications.

• Credit Checks: For roles with financial responsibilities.

• Reference Checks: To get insights from former employers about the candidate’s work ethic and behavior.

• Drug Testing: In industries or positions where substance use could pose a danger.

Best Practices for Conducting Background Checks

1. Follow Legal Guidelines
   Laws regulating background checks vary by state and industry. The Fair Credit Reporting Act (FCRA) outlines how consumer information can be used in hiring. Make sure your screening process complies with these laws to avoid legal trouble.

2. Obtain Consent from Candidates
   Candidates should always be informed if a background check is part of the hiring process and give written consent. Transparency fosters trust and ensures candidates know what to expect.

3. Assess Findings Fairly
   Not every issue uncovered in a background check should automatically disqualify a candidate. Context matters. For example, an old misdemeanor may not be relevant to the job you’re hiring for. Evaluate findings on a case-by-case basis while considering the role’s specific needs.

4. Protect Applicant Privacy
   Ensure that personal data collected during background checks is kept confidential and used strictly for hiring purposes. Mishandling this information could expose your business to legal risks.

Conclusion

In an era where every hiring decision counts, background checks offer business owners peace of mind, protect assets, and promote a safe work environment. For independent shoe retailers—where the bond with customers and community trust is vital—taking these extra precautions can make all the difference. While background checks are not a substitute for good judgment, they are a powerful tool to ensure your team reflects the values and integrity of your business.

When you take the time to screen candidates thoroughly, you’re not just hiring employees—you’re building a foundation for long-term success.