At the end of 2024, Harvard Business Review weighed in on why Employers of Record (EORs) are increasingly attractive for businesses that want to hire global remote talent. The gist: recruiting and managing global employees can be "nightmarishly complex."
But the dream of expanding your international business doesn't have to make you wake up in a cold sweat.
Every step of the process, including the background checks that ensure you know who you're bringing onto your team, can be efficiently and compliantly completed when you work with the right partner (like RemoFirst).
Key Takeaways:
- In-depth background checks help ensure you have a complete understanding of the international talent you're recruiting.
- Certain information, like private medical histories, may not be reviewed during a background screen.
- Laws for employee background checks vary from country to country, so it's essential to understand the regulations and applicable laws everywhere you want to employ global talent.
Why Do I Need an International Background Check?
Here's a startling statistic: according to a recent study, seven in 10 employees lie on their resumes. Wow.
True, some embellishments might be small. Maybe a candidate claims spreadsheet wizardry when they've barely used Excel. But other lies can quickly prove more consequential. Your financial team must actually have experience in finance, after all.
Recruiting teams at a distance can make it more challenging to discover these red flags. By completing a background check and screening candidates before hiring a new employee, you're more likely to find problems and prevent issues down the road.
What Type of Information Can a Background Check Provide?
People produce a lot of data. That data tells a story about their life, which can quickly shed light on whether they've told the truth during their interviews. It can even help you determine whether new employees will be a cultural fit for your company.
A successful background check process reviews many data points, including information about:
- Employment history
- Education verification
- Credit history
- Driving records
- Criminal records
- Social media activity
- Club and association memberships
As with any research, relying on a single source of information will likely get you less information than you need. So, look at various sources when checking a candidate's background.
Do so, and you're more likely to gain a well-rounded understanding of who joins your team before they onboard. For example, reviewing social media might provide you with information about a potential employee's interests.
However, these posts can also help you learn about where the candidate worked, and whether you have mutual contacts you can contact for information about their experiences with the candidate.
Of course, there are differences between reading posts on Facebook or LinkedIn and reviewing LexisNexis for criminal records and bankruptcies. That's why it's vital to do both to get a clear picture.
Remember, though, that some information is off-limits. Laws vary by country, and regulations like the Health Insurance Portability and Accountability Act (HIPAA) in the U.S. and the EU's General Data Protection Regulation (GDPR) limit what employers can access when checking a prospective employee's background.
Different Countries, Different Background Check Laws
Tax regulations, entitlements, employee protections, and visa terms vary from country to country. The same applies to the rules governing researching a new hire's background.
It can all seem like a lot of hoops to jump through. So, why not ask each prospective employee what you need to know, like whether they've been convicted of a crime?
Because asking certain questions is illegal.
This is where partnering with local experts can be a huge relief. They'll know, for example, when regulations like Ban the Box laws make it illegal for employers in specific locations to ask about criminal history on job applications.
Have a partner in the U.S.? They can help you navigate and comply with the Fair Credit Reporting Act (FCRA). This federal law regulates how consumer reporting agencies collect, use, and share credit reports performed during credit checks.
Other laws, from Australia's Privacy Act of 1988 to the GDPR, outline similar restrictions on what data can be collected and processed. Since these regulations govern how data is managed across borders, you must comply with them no matter where your company maintains a legal entity.
Best Practices for International Background Checks
Though it may be time-consuming, developing a background check policy as part of your hiring process that standardizes your screening process and how you evaluate the backgrounds of all potential employees helps avoid bias and potential lawsuits. In short, you want to offer everyone a level playing field.
One way to ensure neutrality is by asking job candidates to consent to a background check during the application process. And don't forget to be specific. Let employees know what you're reviewing, whether it's bankruptcy, criminal history, or anything else.
Hiring managers should exercise good judgment when evaluating candidate backgrounds to make informed hiring decisions. Obviously, you don't want to onboard someone with a fraud conviction on their record. However, traffic violations like speeding tickets may not be a deal breaker.
Want more context about what you've found during a background check? Depending on the situation, you can ask the candidate to respond to the information you've discovered. Then, weigh that conversation when deciding whether to extend an offer.
But keep in mind that certain regulations, like the Ban the Box laws mentioned above, may restrict what you can ask during the interview process.
One way to avoid the potential legal issues of performing an international background check is by partnering with an Employer of Record (EOR).
Employ International Talent with RemoFirst
As an EOR, RemoFirst helps companies hire workers, compliantly complete background checks, and manage talent in 180+ countries.
Our background checks review everything from criminal histories to academic achievements to financial reliability. So you can rest assured you know exactly who is joining your team.
Want to hire international contractors rather than expand your in-house team? We cover that, too, and can complete know-your-customer (KYC) checks to verify the identities of those you work with and limit your exposure to illegal activity.
Want to learn more about how RemoFirst can help you build your global team? Schedule a demo today.
