Survey: Less than Half of Organizations Use Credit Background Checks

The Society for Human Resource Management (SHRM) report, “Background Checking – The Use of Credit Background Checks in Hiring Decisions,” has indicated that over half (53 percent) of polled firms participating in the study choose not to conduct credit background checks on any candidates, a sharp increase from the 40 percent statistic given in 2010 which had risen from just 39 percent in 2004.

Key findings from the July survey include:

• In addition to the 53 percent of organizations not conducting checks on any applicants, a further 34 percent did conduct background checks on select candidates, and 13 percent conducted them on all candidates.

• Of those organizations admitting to conducting checks, 58 percent 58 percent initiate them after a job offer while 33 percent initiate after an interview. Just 2 percent initiate checks before an interview.

• An investigation into why companies conduct credit background checks found that 45 percent do so in order to reduce theft and embezzlement and 22 percent said it was to reduce legal liability for negligent hiring.

• Of these same organizations, 80 percent reported to having hired a candidate despite receiving negative credit information and 64 percent give candidates the opportunity to explain negative results before making a hiring decision.

• Of the organizations conduction checks, 87 percent conduct them on candidates applying for positions involving fiduciary responsibilities, 42 percent on applicants to senior executive positions, and 34 for positions with access to confidential information.