Background Checks

One of the worst mistakes a hiring committee makes is forgoing executive background checks to speed up the hiring process. When a company is going through a period of transition in the search for a new executive, there is often a sense of urgency to find a new candidate and regain the normalcy permanent leadership provides. 

It’s normal to think about skipping the background check, especially if your company runs “lean” and the current team is struggling with the added workload or if the candidate was referred by an employee or board member. No matter the stresses, don’t skip this step. 

Careful checks now, could save you time, money and headaches later. Consider executive background checks more of an investment than an expense. This article covers the basics of when and how to conduct executive background checks.

Risks of No Executive Background Checks 

You may hesitate to spend the immediate costs of conducting executive background checks, especially if you outsource the background report to a specialized company. It’s easy to forget, however, there are costs associated with not conducting this important check. 

Here is a good example. A company was hiring a new executive and found the perfect candidate. They hired a firm to conduct an executive background check and that firm called the prospective executive’s references. One reference said that this candidate’s best skill was interviewing. After six months; they discovered he was unable to complete 75 percent of the requirements of the job.

This reference said that they spent $300,000 in hiring, firing, and replacing this individual. When you compare this amount to the cost of upfront executive background checks, the checks seem like a bargain! 

Beyond the expense of hiring, firing, and replacing, there are costs associated with training. How much is spent on travel or other expenses to build rapport between the executive and clients? 

In addition to plane tickets and other costs, what about the trust equity with the client? How does turnover affect employee and client morale? How about productivity? Don’t risk these costs, tangible and intangible, over a preventable situation. Do the background check. 

Should You Only Conduct Executive Background Checks?

Good hiring practices involve conducting background checks at all levels of employment. You certainly need to conduct executive background checks, but you also need to conduct background checks on all employees. 

Some companies have a strange practice of conducting thorough executive level background checks, but skipping entry and mid-level employees. These companies often wonder why they have a high turnover rate. 

Alternately, some companies highly scrutinize applicants for all positions with the exception of those at the executive level. They do not want to insult an executive with a thorough review of his or her background. This is silly because any valuable candidate has nothing to hide and no problem with executive background checks. If an executive balks at a background check, there could be a reason why.

It is important to conduct background checks for all positions in your company. Review your company’s policy or practices to see if there is a discrepancy or unintentional lapse in these checks. You only improve your workforce by doing your due diligence before hiring. 

If you need assistance with writing legally-compliant applications or documents granting you permission or informing employees or candidates about your background check policy, contact us. We serve many clients’ legal employment needs with our team and our law firm partners. 

Why Should Companies Check References

A reference check needs to be an essential part of the hiring process at all levels of your company. Often companies conduct criminal history checks, social media checks, and drug testing; yet feel uncomfortable about calls to a candidate’s references. 

Never feel uncomfortable about calling a reference! The candidate gave you these references with the expectation of a call. You also are able to see a different side of the candidate by talking to those who better know him or her.

For example, there was a company prepared to hire an executive. This individual provided an outstanding interview and was expected to energize the team and take them to the next level. As part of his executive background checks, the hiring committee contacted three references. 

All three references provided the same information; this individual was coasting into retirement looking for one last lucrative position. Unfortunately, he provided the exact opposite impression to the hiring committee.

This story illustrates the reason to check references with each candidate. Imagine all the headaches these three simple calls prevented for this company!

Falsifying a Resume Happens a Lot

According to a 2017 study, up to 85 percent of employers reported finding false statements on resumes. This increased 19 percent from the 2012 survey. When a candidate provides a falsehood on his or her resume, it is a clear indicator this person engages in unethical behavior. 

If he or she is willing to lie on a simple resume, what would he or she lie about as an employee of your company? Checks find falsehoods on resumes at all levels, so executive background checks are crucial.

It’s often challenging to spot falsehoods, especially if you have a limited amount of time to spend on each resume. It is a good idea to outsource the background checking and references reporting to an experienced firm. The services combined with experience give you peace of mind during your hiring process.

Why Some Companies Don’t Perform Executive Background Checks

First, executive positions are often filled in a different manner than other positions in a company. Most executive candidates are found through networking, and sometimes a person’s reputation takes the place of a proper resume or background check. 

Second, when executives network to find a candidate, it’s common to feel uncomfortable asking for a resume and cooperation with executive background checks. Third, if another executive or a board member referred the candidate, they may imply a background check is unnecessary.

Never feel bad for asking an executive to go through the same hiring process all other employees at your company experience! If this individual seems offended by this process, consider it a red flag that this individual is not the right person for the position. 

In fact, a paper published by the Center for American Progress studied 11 research papers from a 15-year span and determined the average economic cost to companies from employee turnover. 

“Very highly-paid jobs and those at senior or executive levels often have disproportionately high turnover costs.” As a percentage of salary, the survey estimated the costs to replace an executive-level role was up to 213 percent.

So, turnover costs companies big. The necessity to replace an executive is disproportionately high. Therefore, to make the most sound decision in the best interest of your company, the process of executive background checks is a must.

What Your Executive Background Check Includes

Executive background checks include all the checks for any other candidate at your firm. These include:

  • ID check
  • Criminal history check
  • Sex offender check
  • Drug testing 
  • Reference checking

In addition, a thorough executive background check includes a credit check, as with any employees trusted with funds or company credit cards. 

Rely on Barada Associates for Critical Executive Background Checks

In conclusion, while valuable, these checks are time-consuming. Barada Associates has been in the business of reference reporting and employment screening for 40 years! Our experience means we know what to look for and how to read certain “tells” of questionable credentials. 

Our commitment to the industry means we stay on top of trends. So trust the experts in executive background checks. Call Barada Associates today!