Hiring a new employee is a big decision—one that can impact company culture, productivity, and most importantly, workplace safety. Yet, despite the clear benefits of conducting pre-employment background checks, many businesses still choose to skip this crucial step.

While the reasons for avoiding background screening may seem practical on the surface, they often open the door to significant risks, including negligent hiring lawsuits, financial loss, and reputational damage. Below, we explore the top five reasons companies avoid background screening—and the liabilities they unknowingly take on.

  1. Cost Concerns

For many businesses, particularly startups and small companies, the cost of conducting background checks may seem like an unnecessary expense. Some assume that hiring quickly and trusting their instincts will be enough to avoid problematic hires.

🚨 Liability Risk: The reality is that the cost of a bad hire far outweighs the cost of a background check. An employee with a history of fraud, theft, or workplace violence can lead to lawsuits, internal losses, and reputational harm. In fact, the U.S. Department of Labor estimates that the cost of a bad hire can reach up to 30% of that employee’s annual salary.

  1. Lack of Awareness or Understanding

Some companies simply don’t know what’s at stake when they skip background screening. They may be unaware of the types of criminal or civil records that could be relevant to their industry or fail to understand compliance obligations for positions requiring clearances (e.g., child care, healthcare, or financial services).

🚨 Liability Risk: Ignoring background screening can result in hiring someone who is legally unqualified for the role or, worse, someone with a criminal history that puts employees, customers, or the public at risk. For example, hiring an individual with a history of financial fraud for a banking position without a background check could lead to internal theft or regulatory fines.

  1. Speed Over Security

When companies need to fill positions quickly, they may view background checks as an unnecessary delay in the hiring process. Some believe that running a criminal history check or verifying employment and education history will slow down onboarding.

🚨 Liability Risk: Skipping background checks for the sake of speed can lead to rushed hiring decisions, increasing turnover and decreasing workplace safety. Negligent hiring lawsuits are common when an employer fails to vet an employee who later causes harm on the job. A single incident can result in significant financial and legal consequences.

  1. Privacy & Legal Concerns

Some employers worry about violating laws such as the Fair Credit Reporting Act (FCRA) or anti-discrimination laws if they conduct background checks improperly. The fear of mishandling sensitive information or facing litigation may discourage them from screening candidates at all.

🚨 Liability Risk: Not screening at all is a bigger risk than screening properly. Employers who hire without due diligence will likely be held liable if and when an employee engages in illegal or harmful behavior. Additionally, skipping background checks does not shield a company from compliance obligations—it simply increases their vulnerability to hiring someone who should not be in the role.

  1. Trust in the Candidate

Many small businesses and family-owned companies rely on referrals, word-of-mouth hiring, or gut instinct when making hiring decisions. They assume that because they know someone personally or received a glowing recommendation, a background check isn’t necessary.

🚨 Liability Risk: Trust alone is not a hiring strategy. Even well-meaning candidates may have overlooked or forgotten past issues that could impact their employment and put their employer at risk, as well. Background checks provide an extra layer of protection to ensure that the company is making an informed decision, rather than taking an unnecessary risk.

The Bottom Line: The Cost of Skipping Background Checks

Failing to conduct pre-employment background screening leaves businesses vulnerable to:
✅ Negligent hiring lawsuits – If an employee causes harm, the employer can be held responsible. Can your company handle a multimillion dollar lawsuit?
✅ Financial losses – Internal theft, fraud, or embezzlement can be devastating.
✅ Compliance violations – Some industries have strict screening requirements that businesses must follow.
✅ Workplace safety risks – A history of violence, sexual offenses or misconduct may not be evident without a background check.

At ProVerify, we specialize in helping businesses of all sizes implement compliant, efficient and budget-friendly background screening processes that don’t slow down hiring but do provide peace of mind. If your company isn’t currently conducting background checks, now is the time to rethink your strategy before a bad hire costs you more than just money.

💡 Ready to protect your business? Contact us today to learn how background screening can be a cost-effective safeguard for your organization.  For your FREE quote – email: jkerrigan@applicationverification.com or 412-877-8937.