If you have been reading my blogs for any length of time, by now you probably realize how important it is to conduct thorough background checks when hiring employees, working with volunteers, accepting members into a club, or when entering into a long-term business relationship. But what about the cost? Is there an ROI?
I am here to tell you that the cost of conducting a quality background check is low compared to the value it provides, and in some cases, may not cost you anything at all! Bold statement, I know… let me explain.
We all know the chance we take when hiring a new employee. Even when we hold interviews, check references, and test employment candidates, things don’t always go well and we part ways – It happens to everyone, and we accept this as a “part of doing business”. But did you know that the cost of a professionally-conducted background check is typically less than one day salary or wages? It’s true: most background checks cost less than you would pay for that employee for one day’s work!
When you think of background checks in terms of less than one day’s salary, the ROI is clear.
We pay employees tens of thousands of dollars per year (and sometimes more); and even if we just pay them thousands of dollars during the customary ‘probationary 90 days’, the cost of a background check dwarfs in comparison. When hiring, background checks give you many benefits which I have written about in the past – Here are some of the main ones related to costs:
- You will gain insights about an employment candidate you might have never gained otherwise
- You will reduce the risk to your reputation, brand, employees, and customers
- You will eliminate the cost of hiring and training a person you never should have hired
- A background check gives you the best protection from possible legal consequences and costs related, among other things, to negligent hiring and retention liability lawsuits
If you accept applications for memberships, apartment or house rentals, or new franchisees for your franchise company, the cost of conducting proper background checks to you, can be zero! It is very common for the costs of background checks to be paid by the applicants. In other words, by adding the average nominal fee of conducting a background check, relative to the fee you charge for your service, you can pass the cost through.
Clearly, background checks can literally pay for themselves, and very quickly. Make sure you hire a qualified and reliable background screening company that is also a CRA (Consumer Reporting Agency) to run background checks on employees, volunteers, contractors, and anyone who applies to become a member, resident, tenant, or a franchisee owner.
Posted by: Rudy Troisi. President, Reliable Background Screening.