Guide to Background Checks for HR and Recruitment Agencies

Many companies choose to hire HR companies and recruitment agencies to streamline their hiring processes and ensure they attract top talent. While HR companies manage a broad range of employee-related services, recruitment agencies specifically focus on sourcing and placing candidates. Despite their distinct functions, both play crucial roles in recruitment and hiring, making it essential for them to conduct thorough background checks on applicants to ensure a reliable and qualified workforce.

The Importance of Background Checks for HR & Recruitment Agencies

Background checks provide an essential service in the HR and recruitment industry by helping them identify potential employees who may pose a threat to the organisation's safety, security, and success.

In the recruitment process, background checks help HR companies make safer decisions about who to hire or offer interim employment contracts or internships to. Background screening helps recruiters refine their pool of candidates, ensuring they present only the most qualified applicants to companies. Overall, they help HR and recruitment agencies get an idea of the candidate’s past, which helps them to make informed decisions.

For instance, candidates with patterns of criminality and substance abuse issues, may compromise customer safety; those with huge financial troubles may later commit gross misconduct such as theft or fraud.  It is for these reasons that companies - through their HR team or recruiters - conduct criminal records checks, health and drug screening, and credit history checks. 

Types of Background Checks Used by HR Companies 

Background screening is a process conducted by HR departments - both internal and outsourced - that systematically verifies a candidate's relevant professional and personal details. It involves several checks, which can be performed in various ways, depending on the organisation’s location, needs, and preferences.

Below are some of the most common background checks HR companies conduct:

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Here are more details about these checks:

Right to Work Checks 

It’s mandatory for employers to confirm that a candidate is legally permitted to work in a particular country. Failure to do so can be punishable by law. Hence, HR companies have to verify documentation such as visas, work permits, and citizenship status. 

The process depends on where the business is located. In the UK, there are 3 ways to conduct it: Manually (physically checking the documents), online through a share code, and through an Identity Service Provider (IDSP), such as Veremark. 

Learn more about Veremark’s Right to Work Checks here. 

Employment History Checks 

It’s important for HR companies to verify the candidate’s past job roles, responsibilities, and durations of employment to ascertain whether they are suited for the position. 

Because the process of contacting past employers may be labour-intensive and slow, many companies simplify the process through partnering with a background screening platform. 

Employment Reference Checks 

Employment Reference checks are conducted by HR professionals or the hiring manager, who ask for references from past employers or supervisors. This helps them find out about their work history and the job title they held. Asking the right reference check questions can also give insights into the candidate's performance review.

(Character) Reference Check

Reference checks are requested of third party referees, who are asked to provide feedback on the softer-skills of the candidate. These checks can help to provide perspective about their character or personality that may not have been evident during an interview process. 

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Educational Verification 

Employers might want to verify if someone has gone through college or university, and confirm that they did secure a recognised qualification, to ensure they meet the requirements set by the company. This is done by contacting universities / schools and requesting copies of transcripts, diplomas , or degrees.

In some countries, education verification is not a requirement. However, in Singapore, the Ministry of Manpower requires employers to verify a foreign candidate’s education qualifications through accredited service providers, like Veremark. 

Criminal Background Checks

A criminal background check might be done to make sure someone has no criminal records, the person is not now wanted by any law enforcement agencies on a warrant, and that the person has not been convicted of a criminal offence in the past 10 years. 

A criminal background check can also help employers identify whether an individual has had any incidents in the past that could harm the company. A criminal background check is typically done by contacting a local law enforcement agency and requesting a check of public records on behalf of an employer.

Learn more about Criminal History Checks for Employment here. 

Professional Qualifications Checks

Professional Qualifications Checks are conducted to verify the certifications and licences claimed by the candidate. Ensuring these qualifications are legitimate helps validate a candidate’s expertise and suitability for the role.

In many countries, verifying a candidate’s licence can be done online and instantly, provided you have their consent and certain details (date of birth, licence number, etc.) In the Philippines, typing in the licence number and full name of the individual can determine whether they are in fact, a registered professional. 

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Credit History Checks 

A credit history check assesses a candidate’s financial reliability, especially important for roles involving financial responsibilities or access to sensitive information. 

How an HR company conducts this check depends on the process in the country where they operate. In some countries, candidates themselves request the document from the credit bureau, then submit it to the employer. In others, employers can make the request online as long as they obtain the individual’s written consent. 

Learn more about Credit History Checks for Employment here. 

Do Recruitment Agencies Conduct the Same Background Checks as HR Companies? 

A lot of companies hire recruitment agencies to streamline their hiring process considering these firms often have access to large talent pools. In order to source the best candidates to their client companies, recruitment agencies also conduct background checks on the applicants.  

Are they different from those conducted by HR companies? 

In most cases, recruitment agencies have a predetermined set of checks they conduct on candidates, including criminal history, education and employment verification, as well as professional qualifications check. Of course, depending on the terms the company may request to add other types of checks. 

Also, where an HR’s checks are more focused on the goals and criteria set by the company, a recruitment agency’s background checks are often more standardised based on the industry or role. 

To provide the best services for their client companies, the background checks recruitment agencies conduct:

• Are often outsourced to third-party service providers, like Veremark. This way, screening is more comprehensive, and therefore, more accurate. 
• Have faster turnaround time, considering they have established protocols; outsourcing checks to a background screening platform also accelerates the process significantly.  

Below, we’ll further discuss the steps involved in background screening done by the HR companies and recruitment agencies. 

Background Checks by HR and Recruitment Agencies: Steps Involved

The background check process conducted by HR and recruitment agencies involves several critical steps to ensure thorough vetting of potential candidates.

Obtaining the candidate’s written consent

Be it an HR consultancy or a hiring agency, the first step in the process is to obtain a written consent from the candidate to conduct various background checks. This is not only a legal requirement but also an ethical practice to ensure transparency.

Conducting the checks 

Once consent is obtained, the assigned personnel conducts the necessary background checks. HR and recruitment agencies may decide to do this in-house, but most choose to outsource to background screening platforms. 

For HR companies, outsourcing to a service provider may be the best option because it’s time-saving, allowing them to focus on other important HR tasks, highly compliant to the laws, which reduces the risk, and scalable, which is cost-efficient. The third party also has access to extensive and reliable databases, making the checks more accurate and comprehensive. 

Recruitment agencies choose to outsource for all the above reasons, too. Furthermore, since they handle large volumes of applicants, it allows them to focus on sourcing and placing candidates. 

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Adjudication

After the checks are completed, the HR team reviews the findings to determine if the candidate meets the company’s standards and policies. This involves assessing any discrepancies or issues that may have risen during the checks and deciding their relevance to the job role. Recruiters also conduct adjudication based on the criteria provided to them by the client company. 

Learn more about the Adjudication Process here.

Deciding on who to hire

Based on the adjudication process, the HR team makes a final decision on whether to proceed with hiring the candidate. They evaluate all the gathered information and consider how well the candidate fits the company’s requirements and culture before extending a job offer. 

For the recruiters, the final step is to forward the details of the top candidates to the employers. 

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Legal and Ethical Considerations

Both HR companies and recruitment agencies must adhere to the laws and regulations in the countries where they and their clients operate to ensure that these checks are conducted lawfully and ethically.

Compliance with Data Protection Laws

Handling personal and sometimes sensitive information requires strict adherence to data protection laws. Some of the laws to check are General Data Protection Regulation (GDPR) in the European Union, Data Privacy Act (DPA) in the Philippines, Personal Data Protection Act (PDPA) in Singapore. 

Legal Restrictions on Criminal Background Checks

Different countries have specific laws governing the extent and type of criminal background checks that can be conducted. For instance, in the UK, employers can request different levels of Disclosure and Barring Service (DBS) checks depending on the role.

Moreover, laws such as "Ban the Box" in various jurisdictions restrict employers from asking about criminal history early in the application process to prevent discrimination against individuals with past convictions.

Ensuring the Checks Are Not Discriminatory 

All candidates should be evaluated fairly and equally. Hence, background checks must not lead to discrimination based on race, gender, age, disability, or other protected characteristics. 

Challenges and Solutions of Conducting Background Checks for HR and Recruitment Agencies

Conducting background checks is a critical part of the hiring process, but it comes with several challenges. HR companies and recruitment agencies often face issues related to time, accuracy, compliance, and cost. 

Below is a table highlighting common challenges and their solutions.

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Specialised screening platforms, such as Veremark,  offer award-winning technology, expert knowledge, and efficient processes that ensure accuracy, compliance, and confidentiality. By outsourcing, HR companies and recruitment agencies can focus on their core functions while ensuring thorough and reliable background checks.

Why do Recruitment Agencies and HR Need to Consider Hiring a Background Checking Service Provider

A background checking service provider can help HR and recruitment agencies make fast hiring decisions. They can perform various types of background checks on hundreds of employees in an efficient and cost effective manner. They usually have automated, secure platforms, which have a user friendly dashboard. You can typically order background checks on their online cloud SaaS platform.

Background checks can be done manually or through an automated system, such as a specialised HR software. The automated system is usually used by background screening companies and is much faster and more accurate than manual checking, because it uses a number of databases to do its search rather than relying on human input alone.

Choosing the Right Background Check Provider

Selecting the right background screening service is crucial for efficient and reliable hiring processes. As much as possible, look for the following: 

• Service Range: Opt for a company that provides a wide range of checks; that way, you can outsource to them all the checks you need.
• Timely Turnaround: The faster the results are delivered, the faster you can decide on who to hire.  
• Accuracy and Detail: As much as possible, find experts that are trusted by huge companies so you can be sure of the accuracy and comprehensiveness of the checks. 
• Customisation: Choose providers offering customisable packages tailored to your specific needs. 

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At Veremark, we pride ourselves on delivering a seamless, automated, and straightforward background screening experience. Our services are designed to reduce hiring risks through reliable candidate verification, tailored for any industry and role. 

We offer global checks, ensuring comprehensive screening options without long-term commitments. Our pay-as-you-go model provides flexibility, while our 24/7 global support ensures you receive assistance whenever and wherever needed. 

With our efficient processes, we help you accelerate your hiring timeline, making it faster and easier to build a trustworthy workforce. Join us and experience the future of background screening.

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