Why do employers conduct background screening?

Why do employers conduct background screening?

Employees are the foundation of an organisation and selecting skilled and quality hires are crucial to sustaining a successful business in the long term. In order to ensure only the right candidates are hired, employers conduct background screening as a routine measure to maintain quality standards and there are many benefits in doing so:

1. Hiring individuals with a history of job stability and positive work experiences can lead to lower turnover rates, saving the company time and resources associated with recruiting and training new employees.

2. By verifying the credentials, qualifications, and work history of candidates, employers can make more informed hiring decisions. This helps in selecting individuals who are likely to perform well in the role and contribute positively to the organization.

3. Background screenings can uncover instances of resume fraud or misrepresentation of qualifications. This ensures that candidates are honest about their skills and experiences.

4. In roles where employees have access to sensitive information or valuable assets, background checks are essential for safeguarding against theft, fraud, or misuse of company resources.

Here are some common types of background screening services in Singapore:

1. Identity Check

Employers may verify the identity of candidates by cross-referencing personal information provided on resumes or job applications with official documents such as passports or identity cards.

2. Education Verification

Employers verify the educational credentials of the candidate by checking on the authenticity of degrees, diplomas, certifications, and attendance at academic institutions.

3. Employment Verification

This process involves confirming an applicant's work history, including previous employers, positions held, dates of employment, and reasons for leaving, to ensure accuracy and honesty in the candidate's resume. Employers may also contact references provided by the candidate to obtain insights into the candidate's work performance, skills, and suitability for the role. This helps the employer to gain insights into their work ethic, strengths, and areas for improvement.

4. Criminal Records

These screenings involve searching for any criminal history, including misdemeanours and if a candidate has any criminal convictions or pending charges.

5. Social Media Screening

Employers may review publicly available information on candidates' social media profiles to assess their professionalism, behaviour, and suitability for the role.

6. License and Qualification Checks

For positions requiring specific professional qualifications or licenses, employers may verify the validity of the candidate's certifications or licenses through relevant regulatory bodies or professional associations.

7. Financial Records Verification

Lastly, some employers may conduct credit history checks or bankruptcy checks to assess a candidate's financial stability. Some positions, particularly those involving financial responsibilities, may require a review of the candidate's credit report to assess their financial stability and responsibility.

A credit report shows a comprehensive overview of a person’s past borrowing and credit repayment behaviours and discloses any outstanding debts or signs of financial distress that the person might encountered.

For a detailed understanding of how to interpret your Credit Report, you can refer to a previous article by CBS on Understanding Your Credit Report.
(URL: https://ccs.org.sg/articles/credit-report-220317/)

Prudent money management is essential not only for personal financial health but also for demonstrating financial stability and trustworthiness to prospective employers. Sound money management practices are reflected in your credit report through how you have been using credit and loans. Employers want to avoid a situation of financial embarrassment among their workforce due to over-indebtedness, especially for those working in the government and uniformed sectors. Therefore, it is essential to manage your finances responsibly.

Hiring individuals with problematic backgrounds could damage a company's reputation if their actions reflect poorly on the organisation. Therefore, by doing sufficient background checks, employers can mitigate this risk by ensuring that they only hire candidates with suitable histories and reduce turnover rates. Nevertheless, the relevance of these checks can vary based on the industry and the level of the position being filled. Consequently, some employers may not consider certain checks necessary.

Ultimately, the hiring decision remains at the discretion of the employer.

Lastly, follow and like CBS Facebook and Linkedin page for more useful content and tips to maintain a good credit score or visit the CBS’ website to get a copy of your credit report.

If you are concerned about the financial well-being of your employees and want to address potential over-indebtedness, CCS conducts educational talks on using credit and borrowing responsibility and can conduct a financial health check workshop for staff who may be at risk. Email us at education@ccs.org.sg for a discussion to explore more about our talks and workshops.

Contributed by Credit Bureau Singapore

Published 24 May 2024.