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Background Checks Are Key to Avoiding Bad Hires

Latest posts by Daniel Callaghan (see all)

“Acquiring the right talent is the most important key to growth,” said Marc Benioff, the cofounder of Salesforce. “Hiring was – and still is – the most important thing we do.”

These words will ring particularly true for startups. As a business gets off the ground, early employees will help shape and define what it becomes, contributing to key decisions and bringing the company’s culture and ethos to life.

Choosing the wrong person can have wide-ranging consequences, not least to the company’s finances, with the U.S. Department of Labor warning a bad hire can amount to 30% of the employee’s first-year earnings. Then there’s the impact it can have on the rest of the staff, demoralizing workers and damaging team dynamics.

At the more extreme end of the scale, bringing in someone who is untrustworthy or has criminal intentions can hugely damage the reputation of the company.

Fortunately, it’s never been easier for startups growing their teams to access talent. That’s because the pandemic has seen remote hiring – and even international hiring – become the norm. Businesses no longer need to bank on having the right people a commutable distance away; if they’re willing to embrace remote working, they can scour the whole country and even overseas to find the right person.


Hiring Mistakes You Could Be Making

New challenges to hiring

While this brings huge benefits, unfortunately, it has also brought potential risks, too. For starters, not meeting someone in person makes it harder to establish that they really are who they say they are.

If you think the prospect of job candidates pretending to be someone else sounds far-fetched, consider the FBI warning this summer of a rise in cybercriminals using deep fakes and stolen personally identifiable information to apply for remote roles under different identities.

While this level of deception is thankfully uncommon, resumé fraud of one kind or another is not: A 2021 survey by ResumeBuilder found that close to a third (32%) of Americans admitted to lying on theirs. This could include anything from embellishing a job title or exaggerating a responsibility, to inventing qualifications and achievements.

Any startup keen to make sure the people it hires are truly up to the task and able to handle their responsibilities need to be aware of this. And appropriate background checks need to be firmly baked into the hiring process from the get-go.

There are lots of different checks to consider, from standard ID and criminal record checks to credit checks and global sanctions checks for positions that involve handling sensitive financial data.

Considering 1 in 10 people applying for jobs last year had unexplained gaps in their CVs or employment histories, according to Veremark data, these should be priority areas for all types of employers.

Finding the right fit

Of course, while people with the right experience and qualifications are going to be indispensable, any founder will know that it also takes a certain kind of person to thrive at a startup, particularly during its early years.

While the specifics will differ from company to company, the ideal candidate is likely to be someone who can adapt easily and is willing to be flexible. People who can figure out what needs to be done, and learn how to do it, are crucial, as are independent workers who take the initiative and don’t wait to be told what to do.

How to identify such candidates? This is where psychometric testing can prove helpful. These tests can indicate, for example, how a candidate responds to particular situations, their preferred working style, or how they interact with other team members. Combined with other insights from the interview process, they can help paint a more detailed picture of what an individual could bring to a team.

Employers do need to be mindful, however, of not making the interview process too long and arduous, particularly in the current climate. According to the latest figures from the U.S. Bureau of Labor Statistics, there were 11.2 million job openings on the last day of July, while many employers were reporting difficulties filling positions.

Top candidates who feel they are being forced to jump through too many hoops to secure a role may end up accepting a position elsewhere. That’s why employers need to tread a careful line between due diligence and imposition.


Look for These 3 Soft Skills When Hiring to Identify High Potential Candidates

Keeping candidates engaged

Thankfully, running background checks – which was traditionally done in-house by HR teams using email and phone calls – can now be automated, and sped up. Plus, candidates are kept up-to-date on the progress of their screening, keeping them more engaged throughout the process.

This should be a top priority for startups, considering the increase in the trend of employees ghosting’ employers (28% of job seekers admitted to the practice in 2020, up from 18% the previous year, one survey found) – with communication problems found to be one of the biggest drivers of this behavior. Making sure prospective employees are regularly kept up-to-date with developments will make them much more likely to stay invested in the process up to the job offer stage.

Protecting your reputation

One aspect employers tend to overlook when it comes to hiring is a candidate’s social media activity and history. These amounted to less than 1% of all background checks carried out last year, Veremark found.

Yet this can be a vital hiring tool, particularly when it comes to guarding your startup against reputational damage. Only social media accounts that are visible to the public will be searched, and surely if your prospective candidate has posted content that is offensive, inappropriate, or even hateful and dangerous, you would rather be the first to know about it?

These checks can help avoid embarrassing scenarios such as the one involving Google, which was forced to remove its head of diversity in 2021 after an anti-Semitic blog post he had written was unearthed online.

A good complementary check to run alongside social media screening is an adverse media check, which will scan for any negative press coverage about a candidate.

Expanding your team and working with top talent should be one of the most exciting parts of any startup’s journey. Taking extra steps to ensure the people you bring on board are competent, professional and trustworthy means you can focus your energy on growing your business, instead of being distracted with the fallout of bad hires.


Verizon Small Business Digital Ready: A free resource for learning basic business skills, grants, the latest digital technology and more.

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