More than one-fourth of small/medium business owners and managers perform credit or financial background checks on job applicants, according to a new survey conducted by the National Financial Educators Council (NFEC), a provider of financial educational resources.
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NFEC polled 501 small/medium business owners and managers across the United States, asking, “Has your company conducted a credit or financial background check as a condition of hiring or giving a promotion?” A sizable number of respondents, 25.9 percent, answered “yes.”
The survey audience is defined as small/medium business owners and managers each of whom self-reported to own or manage a business with fewer than 100 employees. All participants are U.S. residents who passed validation tests confirming their owner/management roles.
Survey results suggest that employers and hiring manager not only look for the right combination of knowledge, skills, education, experience, and cultural fit; they also delve more deeply into candidates’ backgrounds – including their financial histories.
Regionally, there are differences. Approximately one-third of survey respondents in the Midwest, 33.65 percent, say they conduct background checks, while in the West, only 17.81 percent of respondents say they do.
Candidate Perspective
The data in the new survey align with the results of an April 2016 financial survey conducted by NFEC, in which respondents were asked, “Has an employer or potential employer ever conducted a credit or financial background check as a condition of hiring you or giving you a promotion?” Among 1,100 respondents, 26.3 percent answered “yes.”
“People experiencing financial challenges face a harder time trying to participate in the workforce. With the forthcoming mass elimination of jobs and workers displaced by technology, it’s a critical time for people to improve their ability to get hired. With a quarter of employers checking financial backgrounds, we need to do better across the board so our nation’s citizens can secure income sources. Elementary, high school, and collegiate school systems have goals that include the career success of students – yet the majority of schools fail those students by not teaching financial education courses,” says Vince Shorb, CEO of the NFEC.
Prior NFEC surveys have explored the rates at which people were turned down for a job or promotion based on their financial situations.
In a survey conducted earlier this year, 2,403 respondents from six different age ranges (at least 400 from each age group) answered the question, “Have you ever been turned down for a job or promotion as a result of your credit or financial background?” Among all respondents, 4.08 percent answered “yes.”
In a survey conducted last year, 1,165 adults aged 35 to 54 were asked the same question, and 5.2 percent indicated they had been turned down for a job due to their financial profiles.