New Labor Survey: 1 Out of 4 Companies Perform Personal Finance and/or Credit Background Checks on Employment Applicants
LOS ANGELES -- People who seek to support their families and contribute to the betterment of our country probably need to have their finances in order. In a new National Financial Educators Council survey of small/medium business owners and managers, more than a quarter said they perform credit or financial background checks on applicants.
In a recent survey, the 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?" The results indicated that 25.9 percent answered "Yes."
For complete results of all age groups and analysis visit: https://www.financialeducatorscouncil.org/financial-background-check-surveys/.
The survey audience panel was 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 panel members were US residents who passed validation tests confirming their owner/management roles. The survey was conducted between August 15 and 17, 2017.
Based on these survey results, it is clear that employers and hiring committees not only look for the right combination of knowledge, skills, education, experience, and cultural fit; they're also delving more deeply into candidates' backgrounds – including their financial histories.
The data in the most recent survey align with the results of an April 2016 financial literacy survey conducted by the 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?" Of the 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.
Regionally, business owners and managers in the Midwest had the highest average of 33.65 percent answering 'yes' that they conducted background checks while people in the West had 17.81 percent of respondents agreeing.
Prior NFEC surveys explored the rates at which people were turned down for a job or promotion based on their financial situations. In February 2017, 2,403 respondents from 6 different age ranges (at least 400 from each age group) answered this question: "Have you ever been turned down for a job or promotion as a result of your credit or financial background?" and 4.08 percent answered "Yes." In April 2016, 1,165 adults aged 35 to 54 were asked the same question; 5.2 percent stated that they had been turned down for a job due to their financial profiles. This finding is similar to the 5.1 percent average of 35-54-year-olds in February 2017.
To address this aspect of landing a job, public schools and colleges still only offer limited financial literacy programs. The Fair Credit Reporting Act stipulates that employers must obtain prior applicant consent for a credit check.
The National Financial Educators Council conducts research to examine the associations between financial attitudes and behaviors and financial capability. Hosting think tanks, conducting research, and serving as advocate for the financial education community represent components of the NFEC's research on employee financial wellness and general financial education.
SOURCE National Financial Educators Council