“Background Checking — The Use of Credit Background Checks in Hiring Decisions” indicates that more than half of the responding organizations – 53 percent – do not conduct credit background checks on any of their job candidates, a noticeable increase from 40 percent in 2010 and from 39 percent in 2004. The survey of randomly selected HR professionals from SHRM’s membership is available at: http://www.shrm.org/Research/SurveyFindings/Articles/Pages/CreditBackgroundChecks.aspx. Key findings of the SHRM survey of released in July 2012 include:
- While 53 percent of organizations did not conduct credit background checks on any job applicants, 34 percent did conduct them for select job candidates and 13 percent conducted them on all candidates.
- Of the organizations that did conduct credit background checks, 58 percent initiate a credit background check after a contingent job offer while 33 percent initiate them after a job interview. Only 2 percent initiate credit background checks before a job interview.
- As to why organizations conduct credit background checks, 45 percent conduct credit background checks to reduce/prevent theft and embezzlement while 22 percent said it was to reduce legal liability for negligent hiring.
- Of the organizations that conduct credit background checks, 80 percent reported that they have hired a job candidate with a credit report containing information that reflected negatively on his or her financial situation while 64 percent allow job candidates to explain the results of the credit checks before the decision to hire or not to hire is made.
- Of the organizations that conduct credit background checks, 87 percent conduct credit background checks on job candidates applying for positions with financial responsibilities, 42 percent on candidates applying for senior executive positions, and 34 percent for positions with access to highly confidential employee information.