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More and more Australian businesses use a complex screening process when hiring new employees, starting with the verification of educational credentials and past employment references and ending with criminal record checks. Should startups follow suit? 

How are startups different?

Let’s start with the basics, how do you define a startup. The endgame is the same – offering a product or a service that people would buy and make money, that’s what business is all about no matter what you call your company.

However, startups go about their business in a different way, they do not enter the market to compete against existing products. They offer something new and unique and create a new market for their products or services. Startups are based on innovation and rapid growth, and this is what also makes them vulnerable.

When you come with a new concept, there’s always the risk that someone might steal it and market it before you, which is why you should be very careful when selecting a team.

How can background checks help a startup?

If your product or service is new to the market it would be very hard to prove that someone stole your idea and ran with it. With an established product, there are licences and tons of documents you can use to prove that someone copied your idea, and even then it might take a while till you win damages in  a court of law. When you’re talking about concepts, it would be ten times harder proving someone stole your bright idea. 

To protect against that the best solution is to order background checks on employees to make sure none of them were involved in criminal activities before. What you should be paying special attention to are fraud, embezzlement and anything related to workplace offences. If some guy stole a bit of money from a previous employer, there’s no guarantee they won’t steal your ideas and business strategy and sell it to the highest bidder.  

How do you explain the need for pre-employment screening?

Some entrepreneurs worry that the idea of background checks might be off-putting to prospective employees. That is certainly a possibility, which is why you should be totally honest about that. Make it clear it’s nothing personal and this is a policy you intend to use with all your employees, so no one needs to feel singled out.

Explain to all job applicants that as a startup you have yet to establish yourself on the market and your success depends on having trustworthy employees.

Also, tell them undergoing a background check won’t be a bother to them in any way. They won’t be asked to go to the police station and waste any time with it since you’re using an online character check agency like the popular ANCC service in Australia that carries out criminal history checks online. All it takes is a couple of minutes to input their information and the results will be delivered by email in two or three business days. When you put it like that, your new employees are way more likely to accept the whole idea.

Even if the criminal records come back clean, don’t forget about checking those past employment references and make sure they were not fired for dishonesty or because they were slacking on the job, which might also impact the activity and success of your startup.