Why Should Startups Conduct Background Checks?

The startup industry is particularly vulnerable. To protect your investment, you must first evaluate a probable application. The one who is hired will be the startup industry brand extension. When you are not present, they will manage and secure your assets, communicate with your clients, and preserve your image. It is important that your payroll staff is certified and qualified. Your startup will be compromised if you skip these processes.

As per a recent survey by a background screening solutions provider, Eighty-Seven per cent of anomalies were discovered at the senior management level. Many of the candidates were between the ages of 22 and 30, indicating that they had previously worked in a startup environment.

If an employee working in the company has a history of financial fraud or fake credentials, would it be safe to give them access to company information or power? If the company Human Resources hires someone who is addicted to drugs or has a criminal record, what will be the consequences? These firms put themselves in jeopardy if they do not do a thorough background check on their personnel. Even today, these problems persist, and numerous cases of employee fraud demonstrate that no company is immune.

Senior management does informal reference checks to determine where the possible hire stands on issues such as integrity, accepting responsibility, and overall attitude.

Because startups have fewer workers verifying payroll, cheques, and vendor lists, it’s easier for an insider to steal money.

According to AuthBridge’s CEO, given our country’s current academic system and job situations, as well as other socio-economic factors, the incentives pushing candidates to falsify their credentials may not be beyond employers’ control.

On the other hand, smaller businesses should pay heed to this information and make background checks a requirement in their employment process. A candidate who misrepresents their identity, education, experience, or other qualifications is untrustworthy and should not be permitted to represent any organization in any capacity.

Employees are increasingly utilizing falsified mark sheets, certifications, and job letters. According to AuthBridge, one out of every six employees lies on their Curriculum Vitae.

Opinions of successful startups and companies-

Before diving into the why part, let us look at the opinions of some experts on background checks.

Human Resource Head at Aksh Optifibre Ltd.

We find it very hard to pick one candidate from a pool of many, which is why we do multiple rounds of interviews to understand more about the candidate on a professional and personal level. We ask all candidates the same questions throughout the interview to measure their mental abilities and awareness of the workplace culture.

The CEO of Ascent HR

When any fresher is employed for the first time through flexible recruiting, the emphasis is given more on identification verification rather than background checks, which are more crucial for lateral employees. However, huge corporations prefer background checks for new hires, which is a waste of time and money if the results are poor. The emerging trend is to use BGV exclusively for laterals with some expertise and limit Aadhaar Verification for identity.

Senior Vice President, Global Innovation & MD India Operations

The process of choosing is not particularly unique. Candidates must go through seven rounds of testing in which we look for a variety of traits. In my perspective, the seven stages of the interview process separate anyone whom we consider is not a real candidate. What matters is that the individuals we hire are committed, goal-oriented, and have the appropriate attitude.

According to the CEO of CARS24

Finding the right individual for the right job is one of our primary areas of focus. Our human resources and talent acquisition teams give particular attention to every application received by CARS24, in addition to a well-defined and thorough employment process. To verify the candidates’ work experience, we conduct extensive background checks (both before and after hiring). Referrals are also welcome in order to limit the possibility of any recruitment discrepancies.

As per the CEO of MeritTrac Services

Grades, employment dates, job titles, and technical skills can all be discrepancies on resumes. As a result, unqualified or less qualified people may be considered for job openings. Today, digital technology can be used to identify some differences by consulting external digital sources such as ITRACES and social media.

Why should these startups conduct background checks?

According to a recent study, a significant number of businesses do background checks on potential employees. With the rise in business risks, companies are increasingly doing background checks to acquire qualified staff. Simply put, no one can avoid undergoing a background check by only applying for positions at startups. Here are some of the main reasons why even small and new businesses should conduct background checks before hiring someone on a permanent basis.

They want to grow and succeed

People often associate startups with the IT industry, where every new firm aspires to be the next Facebook or Google. Even startups outside of the IT and tech industries will have similar goals. When applying for a job at a startup, one may believe they are looking for a smaller company, however, this is not always the case. Every company aspires to be a force to be reckoned with and to do so, they require a team of qualified individuals. As a result, it’s critical for businesses to conduct background checks on all future workers and hire the right people.

They must select the right candidate

Most businesses conduct background checks on their employees to ensure that they have chosen the correct person. Startups want to avoid unknowingly hiring someone who steals or is involved in violent crimes as a result of careless hiring. Startups are continually searching for the perfect person for the job. Because hiring processes are both costly and time-consuming, the only cost-effective solution is to hire a qualified employee. When it comes to startups, the temptation to select the proper person is much greater, because negligent hiring litigation can cost a fortune and harm their public image.

Qualification requirements are frequently more specific

Because startups cannot afford to hire a huge number of workers, each candidate must be able to multitask and perform many tasks. As a result, the employees at these companies usually have a long list of skills and qualifications. Recruiters and hiring managers should conduct background checks to ensure that candidates possess the qualifications and skills listed on their resumes.

They need to protect their interests

Comprehensive background checks help protect companies – especially startup organizations, in multiple ways. A thorough background check helps firms avoid negligent hiring lawsuits (and related difficulties), which is perhaps the most important safeguard that background checks provide to a company. In addition, this also helps safeguard a company’s assets.

Startups can be the target of corruption and fraud from in-house employees simply because there are fewer resources overseeing payroll, checks, and vendors list, making it easier for an internal employee to get away with stealing money from the organization. Executing comprehensive background checks and reference checks helps small organizations and startups protect themselves from such unlucky occurrences.


It may be required by those who invest in the company.

Starting a company from the ground up level usually necessitates a great deal of networking and fundraising. Even if the founder of a startup isn’t particularly knowledgeable about the industry, there’s a good possibility that their investor is. Furthermore, when an investor invests in a company, they want to know that the company follows logical and safe practices in all areas, from product creation and manufacturing to employment. Simply put, if a startup business grows, it will be more likely to conduct extensive background checks as investors demand it.

Trust is essential

In most cases, startups are small, close-knit communities. The majority of the essential people spend a lot of time working together on projects, services, and expansion strategies, among other things. Startups must trust their new hires to immediately grow comfortable with them, and clear background verification can help them establish the groundwork for that trust. From school verification to criminal background checks to reference checks to credit checks to employment verification, companies should do various types of background checks to determine whether or not a candidate is someone they want to accept into the work-family.


Wrapping Up

To summarize, each startup is unique, and the background verification process for these fledgling enterprises may range significantly. As previously indicated, the stakes for each hire these organizations make are incredibly high, thus they must not provide a job until they are completely convinced that the applicant is someone they can trust with their company’s image, integrity, and, most crucially, its destiny.

Employee background checks are not subject to strict requirements in India. As a result, it is the obligation of job background verification firms like Repute to handle information and data checks with care and caution. With the proper individuals on board, Repute can be a valued partner in helping your startup grow.


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