New survey says more employers doing fewer credit checks

New survey says more employers doing fewer credit checks

A recent Society for Human Resource Management survey found that more than half of respondents to a recent Society for Human Resource Management survey said they don’t use credit checks in the hiring process. That’s an increase from 2010, when 40 percent of organizations reported not using credit background checks. In 2004, 39 percent said they did not use such background checks when hiring.

The survey also found:

  • Most employers focused on credit histories of two to seven years. Only 6 percent of organizations said that all years of credit history were equally important, a decrease from 17 percent in 2010.
  • Of the 34 percent of employers that conducted credit checks on selected job candidates, 87 percent did so for positions with financial responsibilities and 42 percent used them for senior executive positions.
  • More organizations saying that complying with state law requirements was among the primary reasons criminal records checks were done, up from 20 percent in 2010 to 28 percent today.
  • Fifty-eight percent of organizations allowed job candidates to explain the results of their criminal checks before the decision to hire was made.

The findings suggest employers are becoming more selective on the background check processes they use and are tailoring the vetting process to more acutely select the kind of background information most useful for each individual job description. This comes on the heels of the Equal Employment Opportunity Commission’s new guidelines on criminal background checks.

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