6 Reasons Why Even Startups Run Background Checks

6 Reasons Why Even Startups Run Background Checks

According to a survey cited by the Non-Employment Law Project (NELP), 90 percent of companies these days are running criminal background checks on their prospective employees. That’s up roughly 10 percent from a decade ago, and nearly 40 percent from 20 years ago. And yes, that 90 percent figure applies to companies of all shapes and all sizes—from two- or three-person operations to the largest corporations in the United States.

In other words, you aren’t going to dodge a criminal background check simply by applying for jobs only at startups. Here are six reasons why even small, not-yet-established startups companies will check your background before hiring you.

1. They are looking to grow and succeed

These days, when you think of startups, your mind probably flashes first to the tech sector (e.g. Silicon Valley), where every entrepreneurial venture is looking to become the next Facebook or Apple. However, even startups outside of the tech sphere were probably launched with ambitions of grandeur. Said another way, while applying to work at a startup might mean applying to work at a small company, that company is not looking to stay small. On the contrary, just about any startup you apply for is looking to become a major established company, and that means that they are going to observe similar policies to major established companies when it comes to screening and interviewing new applicants.

2. The pressure to “get it right” is even higher

All companies run background checks on their applicants, in part, to “get it right.” Obviously, unknowingly hiring a violent criminal or sex offender, and then becoming the defendant in a negligent hiring case, is something that employers need to avoid. However, they are also looking to hire someone who is simply the right “fit” for the job, because hiring processes are expensive and time-consuming, and hiring the right person is the only cost-effective outcome. With startups, pressure to hire the right person is even higher, first because negligent hiring lawsuits can bankrupt a startup or ruin their public image (if not both), and second because cash-strapped startups can’t afford to hire the wrong person anyway.

3. Qualification demands are often more specific

Startups are often described as rewarding but incredibly demanding places to work. Those demands extend to the job descriptions. Since startups aren’t going to hire a lot of people, they need to make sure each hire covers as many places as possible. As a result, the jobs in these companies will often have very specific or lengthy skill and qualification requirements, and you can bet that startups are going to check your educational and employment history to make sure you have the qualifications and skills you say you do.

4. They need to protect themselves

Background checks protect companies—especially vulnerable startup companies—in several ways. The aforementioned dodging of negligent hiring suits (and related issues) is probably the biggest protection that background checks provide to a startup, but they can also protect the company’s own assets. Startups are often the targets of embezzlement and fraud from within, simply because there are fewer people overseeing payroll, checks, and vendor lists, making it easier for an insider to get away with stealing money from the company. Running thorough background checks and reference checks helps startups to protect themselves from these types of bottom feeders, and is one of the reasons you should expect a background check before being hired with a developing entrepreneurial firm.

5. Their investors may require it

Most entrepreneurs don’t build successful startups by themselves. On the contrary, building a startup usually involves a lot of networking and fundraising, so even if the entrepreneur leading a startup isn’t exactly experienced in the finer points of business, there’s a good chance their investor is. If an investor is funneling their money into a startup company, then they are going to make sure the company is following safe and smart policies for everything—from product design and manufacturing to hiring. In other words, startups will become more likely to run background checks as they grow, not only because the need to do so is more pressing, but also simply because investors are expecting or demanding those checks be run.

6. They need to trust you

Startup work environments are often very small and tight-knit, with the key members spending a lot of time together working on products, services, expansion strategies, etc. There’s a familial or friend group atmosphere with a lot of startups, and that’s something that only happens when people are comfortable with one another. In order to become comfortable with their new hires, startup teams first need to be able to trust those people, and clean background checks will lay the foundation for that trust. Criminal checks, credit checks, reference checks, employment and educational verification checks: startups will run these types of screenings largely as a means of finding out whether or not you are someone they want to invite into the family.

Of course, all startup companies are a little bit different, and the background checks you could be subjected to as you search for employment with one of these growing entrepreneurial ventures can run quite the range. Overall, though, you just need to be ready for your background to be examined in detail if you want to work with a startup company. As mentioned previously, the stakes are going to be high for every hire these companies make, so they aren’t going to offer you a job until they are sure you are someone they can trust with the image, integrity, and ultimately, future of their firm.

About the Author: Michael Klazema has been developing products for pre-employment screening and improving online customer experiences in the background screening industry since 2009. He is the lead author and editor for Backgroundchecks.com. He lives in Dallas, TX with his family and enjoys the rich culinary histories of various old and new world countries.

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