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Vendor Background Screening and Protecting Your Brand

Date Published: March 19, 2019 | Last Updated: September 15, 2023 | By Accurate Background


Large organizations work with vendors to improve their day to day operations and increase productivity, but how much is actually known about the contingent workers and staff being placed onsite? Although a contingent worker is not a direct employee, these individuals are a direct representation of your brand.

To mitigate risk and protect your brand, it is vital to have a good handle on who is representing your business. Putting a background check vendor management program in place can help organizations manage and implement safe hiring processes when working with vendors.

Why is a background check vendor management program important?

  • Reduces liability by making sure a background check is completed on each person who represents your organization, including contractors and sub-contractors
  • Ensures that the same quality of background check is performed on your vendors and contractors as being done on your own employees
  • Creates consistent processes to ensure compliance with federal laws such as the Fair Credit Reporting Act (FCRA) as well as other state and local laws

What’s to fear with co-employment?

Companies that oversee a vendor management program may fear that they are more susceptible to ownership over any events that happen related to candidates that work for their vendors. However, there has been a shift from the overarching co-employment concerns to looking at the overall risk to the company brand and customer safety. It may be more concerning for employers to not oversee a vendor management program than to fear taking on the responsibility of another company’s background checks.  At the end of the day, the vendor’s employees are representing your brand and it is always good practice to know exactly who is doing business on your company’s behalf.

What is the risk of not conducting vendor background screenings?

In today’s business landscape, customer experience and company trust are some of the largest assets to a brand’s success. If trust and experience fail, it can lead to a dramatic loss in business from customers who no longer believe they are safe doing business with the organization.

Let’s look at how a contracted company or vendor can impact a business if a vendor management background check program is not conducted to the same standards of the contracting company:

A large corporation offering furniture delivery services uses a vendor to hire drivers to deliver the furniture to their customer’s homes, that individual delivering furniture would ultimately be representing the large corporation. If the corporation does not mandate a background check on the individual performing a service on their behalf, they really don’t know the quality of background check, if any, was conducted. If the delivery person has a criminal history record that includes theft, and they steal something from the resident, the large corporation may have to deal with the repercussions.

An efficient vendor management program would have made sure the contractor was background checked to the company’s standards to reduce risk of these types of harmful circumstances.

Here are the types of programs we see our clients implementing:

Loose Management: Your company is the sponsor and recommends to your vendors that they use your preferred vendor background check provider.

Mandated Management: You have total control over the vendor screening program. This means that the sponsor company must use the preferred background check provider and the sponsor company has control over reviewing the background checks and making the hiring decision based on their own criteria.

Full Management: Your company commands that vendors use your preferred background check provider. The sponsor does not actively participate in the background check program, but usually provides detailed information on what kind of background check needs to be utilized on the workforce.

Your background check company should be able to facilitate whatever vendor management program you have in place or plan to put in place. They will be able to create standard background check packages for you and your vendors that create consistency and ensure reliability of those representing your brand.

*The information provided above is strictly for educational purposes. It is not intended to be legal advice, either expressed or implied. Accurate Background recommends that you consult with your legal counsel regarding all employment regulations.