Calculating Backgrounds Check Cost
Background checks are an integral part of the hiring process. They allow you to decide if a hire’s background will fit in with your company culture and whether or not you’re willing to take a risk to work with them. It can help you see if they’re lying about their educational background, if they have a criminal history and even what positions they’ve held in the past. In short, a background check gives you assurance.
As a small business owner, you probably know all the benefits a background check can offer you, but you may worry about the cost. This article tells you exactly how much a background check will cost you, why pricing is important, how we calculate pricing and what issues can affect pricing.
What is the Cost of a Background Check?
Background checks usually hover in the range of $10-$500+. Quite a large difference! We wish we could give you a flat answer, but there’s no flat fee for determining everything a company may want to know about a potential hire. If you are looking solely for a criminal history—which many companies are—you’re probably going to only need to spend up to $50. If you need a more in-depth background examination, along with a drug test, you can expect to spend much more.
Why is Background Check Pricing Important?
We understand that there is a lot of competition in the background check world. Recruiters constantly need to sort through talent and pay for background checks associated with them. One or two checks may not be that bad, but what happens when you need 20+ per year? Costs add up quickly—especially if you’re just starting out as a small business owner. You want to pay a fair rate while also ensuring you get exceptional service. Because background check companies are not always transparent with what they’re doing, it can feel like you’re throwing money at someone for little results. This article explains to you why background checks are important and what value they hold for you as a business owner. After reading this piece, you will fully understand why a background check costs so much and can use that information to navigate offers from various companies to ensure you get a great rate. Just like other industries, knowledge is power when it comes to background check vendors, and this article will help you decide exactly what you need to spend.
Calculating Background Check Pricing
To get an accurate price, you really need to understand what you’re looking for. Background check providers calculate their price points by figuring out exactly what they need to complete their check. Their costs will usually go up based on a variety of factors, including:
A lot of people don’t realize how many people have the same name in the country. So, let’s say the potential employee’s name is john Smith. In the United States, there are probably 100,000+ John Smiths in the United States. If your company is hiring a John Smith who lied about their age, credentials, etc., the background check vendor has to dig twice as hard. On the flipside, a low hit rate can make the process significantly easier, therefore lowering your costs. The more someone has to sort through hit, the pricier the service becomes.
In addition to high hit rates, the background check you are asking for may require a lot of labor. Are you looking for employment verification, a drug test, county criminal check, sex offender check, federal criminal check, motor vehicle record, education verification and credit report? The labor required for all of these checks will make your charges significantly higher than they would be for a simple country background check. Each check costs money and labor, and many of these services add on an additional $10-20 to the final price.
Depth of search
Some people only want to know about employee backgrounds for the past 5 years. Others want a lifetime check. Not only do the number of components you want in your background check influence price, but the length of time you want to go back as well.
Number of Checks
If you only get a couple background checks a year, you’re not likely to get an amazing discount. However, if you require checks every month and spend at least a certain amount with a company in any given year (most have a threshold of $5,000), you are likely to get your background checks heavily reduced.
Most Frequent Background Check Pricing Issues
When you begin looking for a background check vendor, you’ll begin to discover that not all of them are upfront about what they are offering; however, it’s not that they’re trying to hide anything from you. In actuality, they believe that you’ll “know the lingo,” and what you receive may not be what you were expecting. Some things you might come across when looking at your background check options include:
National Criminal File Only Searches
We love the NCF. It’s an excellent stepping stone when looking for information on people. However, it’s not going to give you the most thorough results either. Although the NCF may claim to have everything, vendors are very slow at actually updating the list. This leads to huge gaping holes for some people, meaning that the new hire you adore may not be someone you would or should have hired. Adding a county search to the NCF search can allow background check providers to get the most information possible while clients see what their new hires have actually done in the past. When you order a background check, ask to see their sources to ensure you are getting all the valid information you need.
Employment verification is a relatively new check, and it’s one with an assortment of different definitions. One check for one company may constitute a single phone call while another will call, email and fax when possible. This leads to very different results when a company says they have been “unable to verify” an employment record. When you are talking about this with your provider, ask them exactly how they attempted to verify employment. If it’s the former situation, you may need to verify employment yourself.
More people than you’d think have used various names over the years. This can lead to a crime being committed by someone and the event never coming up on their background check. Obviously, most people aren’t going to tell you about their aliases either. Unfortunately, a lot of background check companies will only check one name. A skilled, thorough check will examine all names, both current and found aliases. You will need to talk to the provider to see exactly what they searched for (a good place to start are maiden names for females).
We wish we could perform a background check for free, but at the end of the day, we pay quite a bit for access fees each year. These fees allow us to search for everything we may want on a person, but they cost a pretty penny for the privilege as well. We also have set-up fees which allow us to run a background check for you by verifying that you’re authorized to run and make decisions off checks.
Are background checks necessary?
We get this question a lot, and we want to know if you consider reduced risks and safety necessary when hiring? Of course, you do! Background checks help you:
Find ideal candidates
There’s nothing worse than finding out that new hire you absolutely adore lied about their experience, educational history and/or criminal record. We see this happen far too often. When unqualified candidates are hired, companies need to take the time to either onboard someone else or teach the new employee what they need to know.
Know what you’re getting into
Sometimes you may be willing to overlook a scruff with the law. After all, we are very different people at 20 than we are at 55. However, you do deserve to know who you are hiring so you can make a decision on whether you believe the risk of hiring someone is worth it.
Reduce your liability
Each year, workplace violence costs the United States an estimated $120 billion. That’s a lot of lost hours and profits. Many companies also find themselves in a legal limbo. By knowing the history of someone you’re looking to hire, you can reduce your liability.
Running a background check is integral to the hiring process, and the cost is likely much lower than you would think. Although a variety of factors can impact how much one spends on a background check, ensuring you get the right hire for the job is likely a priority for you. That’s where we come in. Axiom is dedicated to providing clients with the highest quality background checks without making you jump through hoops like the other guys. If you would like to learn more about how Axiom can help you with a quality background check, click here.