Why Should Employers Run Credit Checks Before Hiring?
Hiring an employee is an investment. When you decide to make an offer to a candidate, you are putting your company’s money and reputation on the line. It’s important and reasonable, then, to want to know as much as possible about the person you’re hiring. While most companies understand that it’s critical to perform criminal background checks on employees, they may be missing key information if they don’t take advantage of credit check services for employers.
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Let’s look first at an obvious example where a company could be hurt by not checking an employee’s credit history. If the prospective employee will be handling cash transactions, it’s important to know if their credit history contains any red flags such as fraud. Again, this is an obvious and extreme example, but if a company doesn’t use credit check services for employers, they may miss this.
During the hiring process, a key question for hiring managers is “will hire this person to simplify or complicate my life?” The goal, of course, is to hire a go-getter that rises to occasions and makes your work at the company easier. If credit check services for employers reveal, however, that a candidate has a lien against them, this is a warning sign that working with them may be more complicated. It may seem somewhat callous but knowing this during the interview process may save quite a bit of conflict after the fact.
If we move a couple of steps up the corporate ladder and apply these considerations to potential franchisees, the process seems entirely justified. Trusting a person to buy into an established chain and follow brand standards and best practices is a huge leap of faith. Not checking their credit history could be an extremely costly mistake.
Considering a new hire’s creditworthiness is a completely valid, fair and legal standard to uphold.