Ultimate Guide to Employee Background Checks

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Zinc Team
June 18, 2020
Updated on:

Background checks refer to the process of investigating and verifying a person's history to determine their suitability for a particular role. They consist of checking records and verifying documents to ensure the candidate has the appropriate credentials and is safe to work in the position they are applying for. The extent and depth of a background check varies globally and you must comply with all legal requirements in the local region. 

Conducting background checks is vital to create a secure and productive work environment. Background checks are particularly vital for regulated industries due to the nature of their operations and the potential risks involved. 

In this guide, we will cover how to establish an effective background-checking policy. We’ll look at the associated costs of conducting background checks in-house vs using a background-checking provider and the different types of employee background checks. We identify best practice strategies when interpreting background check results and how this can help you make informed hiring decisions.

Preparing for Background Checks

Establishing a Background Check Policy

A clear and effective background-checking policy is your secret weapon to ensure your team is built on a solid foundation. To achieve this you must complete the following steps:

Define the scope: Specify which positions or job levels require background checks and tailor checks to specific job requirements. Always include pre-employment and periodic re-screening policies for certain roles.

Identify the relevant checks: Understand what checks need to be conducted, such as criminal history, employment history, educational background, and credit history where applicable. This may fluctuate by industry based on additional regulatory requirements. 

Legal compliance: The are two key compliance requirements that are vital to protect both your company and the candidates:

  • The Equality Act 2010: Ensure your background checking policy does not discriminate against candidates based on protected characteristics like race, gender, religion, or disability.
  • Data Protection: Comply with the General Data Protection Regulation (GDPR) and the Data Protection Act 2018 to safeguard candidates' personal information and obtain their consent for processing background checks.

Remain vigilant about staying informed with relevant laws and regulations to avoid legal pitfalls.

Obtaining Consent and Disclosure

Once your policy is outlined, implement your background-checking policy:

  1. Establish a standardised step-by-step process and ensure your HR team is well-trained on its nuances and the importance of confidentiality.
  2. Communicate the policy clearly to candidates during the application process and provide them with an opportunity to address any potential discrepancies in the report.
  3. Keep the information confidential, limiting access to background check results to only those involved in the hiring decision-making process.
  4. Present the policy in the employee handbook and on your company's intranet for easy access to all employees.
  5. Conduct interactive training sessions to educate employees about the policy and its significance, addressing any queries or concerns they may have.

Remember, a well-crafted background-checking policy is your best ally in building a safer and more reliable workforce. 

Steps to implement your background checking policy

Choosing a Background Check Provider (3rd party v in-house)

Background check providers are specialists in screening candidates, equipped with the latest tools and knowledge to help your team be more efficient. Here’s what to look for in a background-checking solution:

  • Compliance and security: Ensure the provider is GDPR-compliant and adheres to a strict security policy. Look for accreditations such as an iso270001 certification for added credibility.
  • Turnaround time: Using a third party should save you time, select a provider that can deliver fast turnaround times without compromising accuracy.
  • Comprehensive services: Look for an all-in-one solution that offers global checks to meet your business requirements. Look for providers that offer additional services such as custom reports on hiring data, email updates for checking progress or live chat support for candidates.  
  • Reputation and experience: Research the provider's reputation, customer feedback and track record in the industry.

Choosing between a background check provider and conducting background checks in-house involves many considerations that can impact your bottom line. Be sure to evaluate these factors when making the best choice for your company.

Initial Investment

In-house: Calculate the initial investment required to set up an in-house background screening team, including hiring, training, and infrastructure costs.

Provider: Evaluate the setup fee and any additional charges associated with engaging a Background Check Provider.

Ongoing Expenses

In-house: Assess the recurring expenses such as salaries, benefits, and technology maintenance for the in-house team.

Provider: Compare the pricing packages and subscription plans offered by different providers for long-term cost projections.

Opportunity Cost

In-house: Consider the opportunity cost of diverting your HR team's time and resources from core tasks to handle background checks.

Provider: Assess the potential value gained by freeing up your HR team to focus on strategic initiatives.

Accuracy and Efficiency

In-house: Assess the potential cost of errors in the background screening process if the in-house team lacks expertise.

Provider: Evaluate the provider's track record for accuracy and efficiency in delivering reliable results. Find a tool that helps reduce the risk of human error. 

Turnaround Time

In-house: Analyse the potential delays in the screening process due to limited resources or expertise.

Provider: Choose a provider with quick turnaround times globally, reducing time-to-hire and associated costs.

Scalability

In-house: Factor in the cost of scaling your in-house team to handle a growing number of background checks as your business expands globally.

Provider: Opt for a provider that can easily scale its services to accommodate your evolving hiring needs. One that can complete background checks in Australia just as easily as background checks in France.

To find out the total ROI of conducting background checks for your company, try our free ROI calculator and see the time and monetary value running automated checks could offer. 

Considerations for background checks in house vs third party

Types of Employee Background Checks

Criminal record checks

These checks search for any criminal records or convictions, helping you identify future candidates who may pose a risk to your organisation. Each government body has unique requirements, candidates select where they reside and the checks are run in this country. 

Why do these checks?

To protect the safety and security of your business by identifying any red flags or patterns of misconduct. This helps safeguard the company, its employees, and its clients, ensuring a safe and secure work environment. 

  • Most likely to be used in all industries
  • Zinc turnaround time is 48 hours

Education checks 

Education checks are important for organisations looking to verify the credentials and qualifications of future candidates. The authenticity of certificates or qualifications is verified directly by educational institutions. Recruiters can choose to verify one or multiple qualifications.

Why do these checks?

Ensure the people you hire have the qualifications they claim to have. This will help ensure they succeed in their role and maintain the company's standards of integrity. This is particularly important for positions that require specific education or training.

  • Most likely to be used in the healthcare industry
  • Zinc turnaround time is 8 days

Right to work checks 

Right to work checks confirm the candidate's right-to-work for any country globally. The UK has three right to work check options. First, in-person manual checks for all nationalities, inspecting documents. Second, IDVT through IDSPs for British and Irish citizens. Third, online Home Office service for non-British / Irish citizens via gov.uk. We offer right-to-work routes globally.

Why do these checks?

To verify the candidate's legal authorisation to work in the relevant country. This ensures compliance with immigration and employment laws, mitigates potential legal liabilities, and helps maintain an eligible workforce.

  • Most likely to be used in all industries
  • Zinc turnaround time is 28 minutes

Reference checks 

Candidates submit employment or professional reference checks to verify the candidate's work history and ensure they have the experience they say they have. For more information, take a look at our referencing guide.

Why do these checks?

To gain insight into the candidate's past work performance, behaviour and reliability from previous colleagues. This helps you make informed decisions about the candidate's suitability for the role and organisational culture. 

  • Most likely to be used in all industries
  • Zinc turnaround time is 1.6 days

Address checks 

Address verification is a part of the overall background screening process. It helps ensure the candidate's background is thoroughly checked, reducing the risk of hiring individuals with false identities or undisclosed information.

Why do these checks?

To verify the accuracy of the candidate's contact information and to reveal any discrepancies or inconsistencies that could influence hiring decisions.

  • Most likely to be used in all industries
  • Zinc turnaround time is 23.4 hours

UK credit checks 

This verification process involves connecting with Transunion Credit Bureau to search the candidate's name and address for any CCJ 's (County Court Judgments), IVA's ( Individual Voluntary Arrangements), or bankruptcies.  It helps identify if the individual has any unpaid debts leading to a summons to court.

Why do these checks?

To assess the candidate's financial stability and integrity, and to identify any potential risk for positions involving financial management or access to sensitive information. This further safeguards the company's assets and reputation.

  • Most likely to be used in the finance industry
  • Zinc turnaround time is 4 minutes

Finance checks 

Conducting financial watchlist database checks is a crucial process for organisations, particularly in the finance, banking, and compliance sectors. It is essential to comply with regulations aimed at preventing money laundering, terrorist financing, and other financial crimes.

Why do these checks?

To evaluate their financial history, responsibility, and potential risks associated with roles involving financial management, access to company funds, or handling sensitive financial data. This process helps mitigate potential fraud, embezzlement, or conflicts of interest, ensuring financial security.

  • Most likely to be used in the finance, banking and compliance industries
  • Zinc turnaround time is 5 minutes

Identity checks 

The ID check using facial recognition involves the user submitting their ID document and a live selfie. The system verifies the document's authenticity and matches the selfie with the ID photo to confirm the user's identity.

Why do these checks?

To verify the authenticity of the candidate's personal information, ensuring they are who they claim to be. This establishes a foundation of trust and transparency between the company and potential employees. 

  • Most likely to be used in all industries
  • Zinc turnaround time is 4 minutes

Directorship checks 

Peace of mind for legal compliance, risk mitigation, and conflict of interest identification. Meet regulatory requirements to check that the candidate isn’t a disqualified Director in certain countries or doesn’t have any conflicts of interest.

Why do these checks?

To assess whether the candidate holds any current or previous directorship positions, which could affect their ability to fulfil their new role effectively. This helps ensure transparency, avoid potential legal or ethical issues, and safeguard the company's reputation and business interests.

  • Most likely to be used in the finance industry
  • Zinc turnaround time is 20 minutes

Sanctions & watchlist checks 

Checking a candidate for global sanctions involves screening their name against international sanction lists to comply with regulations and prevent associations with sanctioned individuals or entities involved in illegal activities.

Why do these checks?

To mitigate potential regulatory and security risks, ensuring the company is not inadvertently engaging with individuals or entities that have previously been involved with illegal or prohibited activities.

  • Most likely to be used in the security industry
  • Zinc turnaround time is 19 minutes

Adverse media checks 

We compare real-time data, monitoring thousands of news sources, business and trade journals and local, regional and national newspapers. The result is categorised by risk type, including media relating to accusations, arrest, trial and exoneration.

Why do these checks?

This ensures alignment between the company's values and the candidate. It helps you make informed decisions about the candidate's suitability for the role and their potential impact on the organisation.

  • Most likely to be used in the finance industry
  • Zinc turnaround time is 13 minutes

Self-certification checks 

Questions that can be answered by the candidate. We collect the answers but don't verify any of that information. It is used for scenarios like integrity questionnaires, SMCR declarations and I-9 form submissions.

Why do these checks?

It ensures transparency and assesses the candidate's self-reported information before proceeding with more comprehensive background checks, ultimately aiding in making efficient and informed hiring decisions.

  • Most likely to be used in all industries
  • Zinc turnaround time is 2 mins 

Types of background checks offered through Zinc

Interpreting Background Check Results

Handling Sensitive Information

When conducting background checks on candidates, safeguarding their personal information and data is paramount. Here are some best practice strategies to ensure the secure handling of sensitive information.

Safeguard personal data: Only collect information necessary for the background check process, avoiding the unnecessary retention of sensitive data. Limit access to authorised personnel involved in the hiring process.

Securely storing background check reports:  Implement strong encryption protocols and ensure that only authorised personnel can view and handle sensitive information. Securely store reports in password-protected databases or secure cloud storage systems and establish a clear retention period to ensure their disposal when no longer needed.

Preventing data breaches and identity theft: Educate your team on data security best practices and the importance of safeguarding sensitive information. Conduct periodic audits to ensure compliance with data security policies and procedures. Develop a comprehensive incident response plan to swiftly address any potential data breaches.

Addressing Discrepancies and Red Flags

Occasionally, you might come across discrepancies in information during background checks, here are some key tips to handle these situations with transparency, empathy, and fairness.

Discrepancies in employment or education history: Be sure to verify all details before concluding that there is a discrepancy, as errors can occur in databases or during data entry. Reach out to the candidate to discuss the discrepancies and give them an opportunity to clarify any inaccuracies.

Approaching candidates with adverse background check results: Arrange a private meeting or call with the candidate where you can prioritise confidentiality. Clearly present the adverse finding, ensuring they understand the information being discussed.

Providing candidates with an opportunity to explain findings: Encourage open communication, and create a supportive environment where the candidate feels comfortable explaining the circumstances. Pay attention to their perspective and be empathetic to their situation. If necessary, allow them to appeal the findings with additional supporting documentation.

By taking these steps, you'll uphold a professional and respectful approach that strengthens your hiring process and builds trust with candidates. 

Making Informed Hiring Decisions

Balancing Background Check Results with Other Factors

You should always take a holistic approach to evaluation. Consider background check results alongside interview performance and skills assessment to create a comprehensive profile of each candidate. Evaluate the impact and relevance of the findings on the candidate's ability to perform the job and the time elapsed.

Review their past experiences and look for indications of growth, improvement, and rehabilitation. Evaluate whether candidates take responsibility for any adverse background check findings and demonstrate a commitment to personal growth.

You need to ensure a fair and unbiased evaluation process. Make decisions based on factual evidence and establish clear and consistent evaluation criteria for background checks, interviews, and skills assessments to avoid bias. You could also conduct blind reviews to reduce unconscious bias.

Be transparent with candidates about the factors influencing the final decision and always offer constructive feedback after the evaluation process.

Final thoughts

The benefits of conducting employee background checks cannot be overstated. Beyond risk mitigation, background checks empower your business to hire with confidence. They help you make informed hiring decisions and grow a team full of trustworthy, highly qualified professionals. 

Adopting a comprehensive approach to background screenings, proves you demonstrate a commitment to unbiased evaluation, giving every candidate a fair chance to showcase their potential for growth and contribution. 

If you’re looking to hire at scale, consider an all-in-one background-checking provider that can revolutionise your hiring process. Embrace the importance of background checks and enable your business to thrive with a team built on trust and integrity. 

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