Why background checks are vital for business success
Success of a business rides on several key elements. One such essential element is the practice of conducting a thorough background check either before employment of a candidate or before getting into a contract with another business entity.
Irrespective of the deal size or employment package, you can either employ your own resources or hire a third party to do the background check.
Why is it essential to conduct background check before hiring?
Background check is not only about looking into which college a candidate went to, or if he indeed worked in a said company. This is much more than finding out KYC of a bank customer. A brilliant student might have behavioral issues, an excellent performer may be dishonest and injurious to the company in the long run. No company wants to be left in a soup simply because they hired an unsuitable candidate. Starting from major frauds in companies, to legal tussles and enormous management mistakes – all these are not caused by fresh out of college graduates. People responsible are usually highly talented and placed higher up the ladder. A mere documentation check will never be able to highlight the said issues
How to go about it?
Instead of only looking into the records, one needs to communicate with people who have been associated with the candidate in the past. This may be a previous colleague or boss of the said candidate, or even teachers in school or college. Talk to the reference provided by him, also try to find out someone unrelated in the same company who might be able to give you an unbiased opinion. Feel free to ask questions about his personality and characteristics, like sincerity, integrity, timeliness and enthusiasm. Honesty is one key concern all employers should try to investigate.
Background check of a business entity
Before signing a contract with a company, it is always advisable to do a thorough background check to estimate to what extent the information verbally provided to you is correct. If necessary, spend some time and money to get the company’s balance sheet and evaluate its current business size and liabilities. Any business entity with an up-to-date and growing balance sheet, irrespective of the size, with all taxes cleared is a convincing partner. Not doing a thorough check might lead you to work with people who do not deliver on time, not to mention getting entangled with fraudulent and unreliable business partners.
Connecting with a previous associate or client of the company can also provide you with powerful insights about what to expect. Another authoritative resource is the company’s bank, which is a powerhouse of information about the company’s financial dealings as well as inside management. In case of a new company, past records of finances may not be readily available. In that case it is beneficial to have a valuation of the management and if any of them holds a position in any other company or group company or held in the past.
-- Debasish Dutta, Managing Partner & CEO of Orange Corp, Global
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