Ways a Credit Check for Employment Can Increase the Revenue of Your Business: Part 1

When employees and employers feel safe, morale and productivity tend to be higher. And no matter which way you look at it, all of these aspects are correlated with your bottom line.

While doing employment screening like criminal records checks may seem like an obvious component of an application — especially if the position requires handling sensitive information — there are many other types of background checks that can help keep your organization safe and running smoothly.

Running an employer credit check  as a standard part of the hiring process can provide valuable insights into the character and capabilities of employees. This involves looking into a person’s debt history, their situations with loans and mortgages, their payment history, and whether or not they have ever had tax liens. The process is not about exploring “how much” they owe — it is really more about getting a sense of their financial behavior and habits.

Compliance and Transparency

One of the most basic reasons to do a credit check is as a means of showing transparency and understanding whether you can trust a potential employee. The more transparent a person is about their background, the less likely they are to engage in unlawful activity on the job.

When you do a credit check, you are also checking to see if the person is willing to own up to mistakes. For instance, they may have made a mistake that caused a blip in their credit record — but did they admit it on the application? This might be a good indicator as to whether, for instance, they would be willing to admit to an inventory accounting error.

You can protect and grow your bottom line simply by ensuring that employees are willing to comply from the start.

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Fraud

According to the Association of Certified Fraud Examiners, the global loss of revenue due to fraud is some $3.7 trillion — this is not a number to be taken lightly! When hiring people that are responsible for large assets and the like, it’s important to take a look at their personal background for inconsistencies that can act as red flags.

Methods of Securing Financing

Credit checks investigate financing and debt patterns. If a person shows a clear understanding of how to secure and manage credit for themselves, especially in large amounts, it’s a good sign that they will also be competent managing the financial aspects of your business.

Financial Criminal Offences

If someone is being pursued by the IRS, you may be aggressively pursued by them for information about the employee. Wage garnishments and other collections-related IRS actions can cost employers time and money that they could otherwise be using to grow their bottom line.

Besides that, legal situations that an employee may currently be facing can take up time and resources if they involve constant phone time or missed work. If there is a financially related court case going on, a credit check is one way of finding out.

If someone has a history of financial upset, this could be an indicator of a bigger problem that there were other illegal things going on. It’s important to look at a credit record to investigate whether or not a person may even have the potential to steal or commit fraud.

MORE: How to Use Your Applicant Tracking System to Re-Activate Past Candidates

Emma Epps

Emma Epps
Emma Epps is one of the marketing managers at Trusted Employees, and helps provide businesses, non-profits, and volunteer organizations with pre-employment screening services.

Emma Epps
Emma Epps is one of the marketing managers at Trusted Employees, and helps provide businesses, non-profits, and volunteer organizations with pre-employment screening services.

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