NEW YORK (BankingMyWay) – One deal-breaking bugaboo in the job-hunting campaign is the employee background check, in which one late medical bill payment or a driving-while-intoxicated charge can turn a dream job into dust.
Fortunately for job-seekers, background checks are becoming a lower priority for employers.
Data from the Society for Human Resources Management shows a marked decline in employee background checks since 2010.
More than half of all employers responding to an SHRM survey say they no longer use credit-related background checks. That’s compares with 40% in 2010 and 39% in 2004.
Furthermore, 14% of employers no longer run criminal background checks, compared with 7% in 2010.
A big reason for the decline in background checks is that companies are taking a longer look at what “job-relatedness” means when reviewing potential employees and having their human resources managers focus more sharply on experience and skill sets needed to do specific jobs.
“Human resources professionals are looking more closely at the job-relatedness of these practices,” says Mark Schmit, SHRM’s vice president of research. “As a result, fewer employers are using background checks, and checks are often done for specific jobs or to comply with the law.”
Even when they do conduct credit and criminal record checks, employers are more likely these days to hire a job-seeker with negative information on such report. From SHRM:
- 80% of employers reported hiring a job candidate whose credit report contained information that reflected negatively on the candidate’s financial situation.
- 64% of employers allowed job candidates to explain the results of their credit checks before a hiring decision was made.
- Most employers focused on credit histories of two to seven years. Only 6% of organizations said that all years of credit history were equally important, a decrease from 17% in 2010.
- Of the 34% of employers that conducted credit checks on selected job candidates, 87% did so for positions with financial responsibilities and 42% used them for senior executive positions.
Stricter government regulations on the federal and statewide levels are also a factor weighing on employers considering background checks. States such as Illinois have curbed the practice of using credit as a reason to deny an applicant a job, and the federal Equal Employment Opportunity Commission recently issued a 52-page report spelling out what employers can and cannot do in conducting employee background checks.
If employers don’t abide by those rules, they may find themselves facing fines and penalties for discrimination.
But while SHRM numbers show 28% of employers this year (up from 20% in 2010) cite complying with government regulations as a big factor in conducting criminal checks, 58% of companies allow job candidates a “day in court” to explain criminal or credit-related transgressions.