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3 Factors That Determine the Cost of a Background Check

Hiring someone who has misrepresented their credentials, background, or criminal history can be disastrous for your organization.

At best, your new hire might lack the necessary skills to do the job, which can drag down your productivity and force you to expend excessive time and resources on training. At worst, the new hire can expose your organization to severe legal, financial, and reputational risk – especially in highly regulated fields such as health care and finance.

Unsurprisingly, then, 96% of employers mitigate these risks by running some form of pre-employment background check.

Background checks verify key details about a job candidate’s past experience and activities. A background check may examine a candidate’s educational history, their certifications or licenses, their criminal record, and other information that may be essential to their suitability for the job.

While there are enormous benefits to conducting background checks, some hiring managers may question the cost.

Why do background checks cost what they do? And why is there so much variation in the cost of a background check among different providers – and sometimes within the offerings of a single provider?

Cost is always a significant consideration in hiring. Hiring managers must balance the cost of background checks with the value the right new hires can bring to their organization.

In this article, we’ll explore the typical factors background check services use to determine pricing. This will help you decide which elements of a background check are essential, and where you might be able to reduce costs without exposing your company to undue risk.

Starting Small: The Cost of a Basic Background Check

Basic background checks are often inexpensive. Background checks that look at only one criterion or source of data tend to cost the least.

For example, many criminal background checks cost $50 or less because they focus only on criminal records. These costs can be reduced even further by targeting only one set of criminal records, such as state court convictions.

Identity verification services are also inexpensive in most instances, as the information required to verify identity is often widely available. 

The more information required in a background check, the more you can expect to pay.

A background check that encompasses a candidate’s educational history, work history, credentials or licenses, and criminal records – along with a drug test – is likely to be more expensive than a basic single-factor search. However, such a background check also provides far more information than a simple criminal check.

For certain positions, checking licensing, education, and other details may be as essential as checking criminal history. 

Why Do Background Check Prices Vary?

You may have noticed that different background check providers give different quotes or estimates for their services. Pricing can vary even within a particular provider’s practice. 

The typical background check provider sets their costs using three factors:

  1. The types of searches performed
  2. The depth of the searches
  3. What those searches turn up

Cost Factor #1: Type of Search

Different types of background searches require more or less effort, resources, staff, and so on. For example, a search limited to county criminal conviction records will cost less than a search that includes county, state, and federal criminal conviction records. 

Cost Factor #2: Search Depth

Consider again the criminal background check example described above.

A hiring manager may ask for a search limited to county criminal records only but should this search include only the county in which the candidate currently lives, or should it include every county in which the candidate has lived for the past several years?

Even when only one search type is chosen, its depth will affect the amount of labor and analysis required, and thus, the cost of the search. 

Cost Factor #3: Information Reported

Finally, the information that is revealed – or not – during a background check may also affect the cost of the overall process.

For example, suppose that during a county criminal background check, information appears that indicates the candidate may have been convicted of a crime in county court within the past year. 

The inquiry doesn’t stop there. Instead, the next step is to verify that the criminal conviction record does in fact belong to the candidate and not to another person with the same first and last name. Or, the inquiry may focus on whether the conviction is connected to a deferred sentencing or to another scenario that provides the candidate a chance to earn a clean record.

Similarly, a check of a health care provider’s license may uncover adverse events like a suspension. This would also call for verification of the terms of the adverse event and the candidate’s standing with regard to those terms. 

Verifying this information is crucial to a clear and accurate understanding of a candidate’s background, criminal or otherwise. 

Managing Costs While Obtaining the Information You Need

The financial cost is only one of the costs to weigh when deciding whether to order a background check.

Two other costs must also be considered:

  • The time required to verify certain details internally
  • The potential costs of not performing the background check 

Background checks can touch on a wide range of details about any given candidate. Without access to the necessary data sets, gathering that information can be time-consuming.

Often, it is far more cost-effective to trust the background check process to a company that specializes in performing thorough, compliant background checks. This will free up your human resources staff and hiring managers to focus on other work, such as getting to know each candidate individually.

When you need to balance the cost and value of your pre-employment background checks, a background check service provider like Chane Solutions can help.

We specialize in providing the information human resources teams need in a timely manner, so that you can make informed, confident decisions about your next hire – without breaking the bank.


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