Why Background Check is Important in the Philippines: 5 Reasons

Last Updated on March 31, 2023

Working with people in the Philippines (or any other country, for that matter) has pros and cons.

While they help your organization achieve its goals, the same could be said regarding their adverse effect.

Hiring the WRONG people in your company can be its downfall.

Your goal is to work with people who share your values and goals and help your company succeed. And you can only do this with the help of a background check.

This post discusses why you should conduct background checks in your organization if you haven’t yet. Let’s begin!

Legal Compliance

Companies must comply with legal requirements to conduct background screening in the Philippines.

The first is The Data Privacy Act of 2012 (DPA). It ensures the privacy and security of personal information collected by companies from their employees. An example includes information gathered during the hiring process.

The second is the Anti-Discrimination Act of 2019. This prohibits employers from discriminating against applicants based on age, race, gender, religion, and other factors. This falls in line with the Decent Work Agenda by the the Equal Employment Opportunity Commission (EEOC).

The last is the Fair Credit Reporting Act (FCRA). It enables companies to ethically collect financial information of potential hires and partners. From here, employers determine whether to work with them or not.

Conducting background checks to observe these laws helps companies demonstrate legal compliance and protect their employees’ rights.

Failure to comply with these laws can result in significant penalties and legal consequences. Companies can face fines, civil liability, and even imprisonment for non-compliance.

Employment Screening

Employment screening is an essential part of the hiring and interview process. It enables you to verify employment qualifications with their past employment history.

Pre-employment screenings can also include educational background, motor vehicle records, and criminal background checks.

The records you must check depend on your company’s values in the employment screening process.

Ultimately, the background screening program you develop ensures that the candidates are a good fit for the position they’re applying for.

Here are reasons why pre-employment background checks are essential:

• Improving the quality of hires – To conduct background checks correctly, you must thoroughly review their job application and call their personal references and previous employers. This reduces negligent hiring, which usually results in a high turnover risk.

• Reducing the risk of workplace violence – Employment screening helps to identify candidates with a history of violence or criminal behavior. Hiring applicants with clean records helps create a safe working environment for all employees.

• Protecting company assets – Employment screening helps identify candidates with a history of theft or fraud. You want to work with honest people who will neither steal from your company nor put it in harm’s way.

Related: How long does a background check take?

Tenant Screening

If you are a property owner or have a business that involves renting out property, you must screen your tenants first.

Similar to pre-employment screening, this process involves checking the background of potential tenants to ensure they are eligible to inhabit the property.

If you have a good tenant screening program in place, you can achieve the following:

• Safe community – The goal is to lease their properties to safe and responsible individuals. A background check should help you determine potential tenants with a criminal history that they can remove from their shortlist of potential tenants.

• Financial stability – You must check the credit history of prospective tenants to see if they can pay their bills on time. Having outstanding debts from previous rent or even utility bills is a red flag.

• Reduce property damage – Your tenant screening should help you identify tenants with a history of damaging rental properties. You can then avoid renting their properties to such individuals.

Vendor and Supplier Screening

Conducting background checks on vendors and suppliers is equally vital as conducting checks on job applicants.

It ensures businesses are partnering with reliable and trustworthy vendors and suppliers and not exposing themselves to unnecessary risks.

When conducting vendor and supplier screening, consider its scope based on the level of risk and the type of vendor or supplier.

For example, a vendor that provides IT services may require a more comprehensive background check than one that offers office supplies.

The former has access to more sensitive information about your business, so choose a supplier you can trust wholeheartedly.

Next, develop a consistent screening process for all vendors and suppliers to ensure fairness and avoid discrimination. Consider factors like customer reviews, price, and others into the equation as well.

Finally, document the screening process results and keep them on file for future reference.

Here is what a supplier screening process following the steps above can do for your business:

• Protects your reputation – Partnering with vendors or suppliers with a poor reputation can damage your brand image and reputation. Conducting background checks can help you avoid partnering with vendors or suppliers with a history of fraud or unethical behavior.

• Minimizes risks – Partnering with vendors or suppliers with a history of legal issues or financial instability can put your business at risk. Conducting background checks can help you identify any red flags and minimize risks.

• Compliance – Conducting background checks on vendors and suppliers can help you comply with legal and regulatory requirements. Some industries, such as healthcare and finance, have strict vendor and supplier screening regulations.

Financial Transactions

Background checks are essential in financial transactions or monetary exchanges. The last thing everybody wants is to be scammed out of their hard-earned money.

So, if you’re working for financial institutions like banks, set up a background check program to prevent fraud and embezzlement. Not addressing both can lead to significant financial losses for the institution and its clients.

This requires you to screen employees with access to sensitive financial information and handle large sums of money in your company.

The same goes for prospective clients applying for loans or credit cards.

Lending institutions must verify the applicant’s identity and creditworthiness to assess the default risk.

An applicant with a delinquent or fraudulent history is good cause for you to either reject their application or offer less favorable terms.

Finally, background checks are crucial to help you engage in financial transactions with trustworthy companies or individuals.

A background screening service helps you avoid dealing with unreliable entities that can cause financial losses and damage your company’s reputation.

Conclusion

As you can see, your company needs background-checking services, even if you’re not hiring from the Philippines.

This applies not only for job-related purposes but also for screening potential clients and business partners.

A thorough background check prevents potential legal issues, financial losses, and company reputation damage.

Additionally, background checks can help companies comply with legal requirements and regulations for hiring and employment in the Philippines.

From here, you can assign background screeners in your company to double-check prospective candidates and cross-reference partners.

Or you can hire a background check company like The Spy Experts to do the heavy lifting for you.

Our years of background checking experience enable you to find top-notch employees, upstanding clients, and trustworthy business partners. We screen each one like a fine-tooth comb and explain why you should or shouldn’t work with them.