Using AI in Background Checks: The Pros and Cons

Hiring the ideal person for every vacancy in your business is the first step toward growth. Ultimately, success depends on your team as much as on the product or service you provide. Developing that team requires a thorough effort—including steps that protect your business, its employees, and others. Screening individuals for red flags is a common practice. Increasingly, though, there is an interest in how to apply new technologies, such as AI, for background checks.

The meteoric rise of AI technology in business, triggered by the release of new and more powerful models, has inspired many questions. Almost every industry is asking questions about utilizing AI, and human resources and hiring managers are no exception. Background checks are critical to protecting the business and demonstrating due diligence in hiring. However, they can also take time and be quite complex.

Can artificial intelligence be a game-changer for hiring teams? Could AI lead to improved compliance and better-quality hires? These are questions many companies continue to investigate. However, there are just as many causes for concern as for potential celebration. To understand the benefits and potential costs of using AI for screening, we must first consider what drives the interest of business users.

What Interests Companies About AI Technology in Background Checks?

Regardless of the industry, many pain points are common in hiring. These issues are a source of constant concern. Some AI tools entering the hiring workflow today promise to address these concerns. What are the issues driving AI adoption at some organizations?

Hiring is expensive and time-consuming. As a company’s scale of operations increases, so too do these expenses. In a larger business, dozens or hundreds of people might simultaneously go through the hiring pipeline. That demands considerable involvement from human resources. Bottlenecks and slowdowns develop, which further increase costs.

Meanwhile, time to hire remains a critical metric for the applicant and hiring manager. Filling vacant positions sooner is necessary to maintain core operations. Companies must hire more quickly, but sacrificing due diligence isn’t an option. This conflict creates competing needs that can further complicate hiring.

Compliance is not easy, either. Laws and regulations around employment background checks and their usage continue to evolve nationwide. What works one year might not be entirely legal the next. The abundance of candidate data scattered across different platforms and strict compliance needs create challenges for staff in managing costs and workload.

With that in mind, AI has the potential to be a game-changer. Companies continue to look for ways to gain an edge wherever possible. The need to adapt means examining AI from all angles is vital. Let’s consider the pros and cons of using AI for background checks.

What AI Brings to the Table for Hiring Managers

A screening process powered by AI can deliver several advantages. With artificial intelligence on board, several aspects of the process could be streamlined or simplified. What are the primary benefits of AI?

• You can leverage a system that learns and attunes to a company’s preferences over time. While businesses don’t (yet) use AI to make final decisions, an AI model could better zero in on the specific red flags relevant to a company. For example, a job in banking might need to flag applicants with financial crimes.
• AI can boost the cost-effectiveness of hiring processes. AI tools and automation mean you can devote fewer human resources to burdensome tasks. Such tasks could include determining which screening products to order, placing those orders, collecting results, and analyzing them.
• AI could help you access data more quickly. By determining what screening solutions to use, you could reduce the time it takes to get results for decision-making. AI can’t circumvent delays at the courts, but it can speed up work elsewhere.
• AI may play a substantial role in companies that prioritize social media screening where legally permissible. An AI model can more rapidly scan someone’s online presence and flag potentially objectionable behavior or language in public posts.
• AI can detail complex background check reports and their key ideas. A model could help standardize and simplify the language used for charging and conviction in different states. It could also highlight vital red flags most likely relevant to a decision.

These potential benefits could remake hiring processes. However, there are concerns.

The Drawbacks of Using AI in Hiring

Despite the hype, it’s important to keep expectations anchored in reality. AI tools aren’t magic nor a silver bullet that resolves every situation. Set your expectations with a clear view of the drawbacks of using AI in hiring. Some of the obstacles include:

• Regulations surrounding AI in hiring are still in flux. Rule-making is ongoing at agencies such as the Federal Trade Commission (FTC) and the Equal Employment Opportunity Commission (EEOC). Areas such as New York have already enacted detailed laws governing the responsibilities of companies that use AI in hiring.
• Complying with these regulations could be costly—likewise, a company may need to change its procedures if new rules emerge.
• Today’s AI models are often a black box to outside users. There’s poor visibility into how these tools work and little control over their functioning. Companies must place a great deal of trust in their AI vendors.
• AI tools remain imperfect, especially today’s popular large language models (LLMs). LLMs used in background check analysis might still produce hallucinations or falsehoods. It is indispensable to keep humans in the loop to critically monitor and judge AI output. Companies can’t install AI and trust it unquestioningly, only to create new oversight demands.
• Access to AI and the necessary API keys can be expensive, especially when hiring at larger scales. That expense could offset savings gained in other areas.
• A total reliance on AI to keep the company compliant with background check regulations could lead to mistakes or problems that fall through the cracks. A realistic application is essential.

Finally, there are also ethical concerns involved with the use of AI in hiring.

Biases can occur in the training data used to build hiring AI tools. Biases inherent to the developers might also inadvertently pass into the model based on training decisions. Similarly, using AI for social media screening and related processes might introduce inadvertent biases against certain groups. These concerns are rooted in fears about unfairness and potential discrimination in AI-powered processes.

Correcting these biases takes time and requires a proactive effort to identify them. There are also concerns about AI's impact on privacy, primarily when used to scan the web for information about an applicant.

What about securely handling all the personal information in background checks and job applications? With an ambiguous and slow-moving regulatory environment, companies face a risky landscape surrounding AI background checks.

Building a Fair and Accurate Process That Remains Efficient

There’s always a need to improve the hiring process. The promise that AI can support cost-effective scaling is appealing, especially for growing SMBs. Making the correct choice demands carefully weighing the trade-offs between a fully human-led process and one supported by AI.

AI could help you improve compliance and reduce associated costs and risks. It could also ensure that you meet the requirements for obtaining informed consent from applicants. A suitable model could make understanding and interpreting background checks easier. An astute policy that keeps humans at the top of the decision-making hierarchy can harness AI's potential to make real improvements.

AI may not be suitable for small companies with irregular hiring needs. A more personal approach may still be preferable. However, for growing SMBs and enterprise-level companies, the benefits may soon outweigh the risks. The decision ultimately rests with each business, and there’s no telling how the technology might evolve in the immediate future.

The Future of Background Screening for Employment

Is AI suitable for your company’s hiring procedure? Every company may soon need to answer that question. Though it’s hard to say precisely what the future will hold, AI technology continues to advance rapidly. As regulators struggle to keep pace with these innovations, employers must preserve the fundamental principles of hiring fairness.

As AI hiring tools continue to develop and mature, HR Managers should monitor these changes. Continuously evaluate how you will respond. If your company already uses AI in some capacity, develop rigorous controls and procedures. Supplement human insight—don’t supplant it. When partnering with AI providers, have clear agreements related to security, privacy, and anti-bias efforts.

Adopt AI responsibly when it makes sense for the scale and scope of your hiring operations. Adapt as necessary to align with shifting compliance requirements. Remain proactive and involved in hiring and rely on us for thorough background checks, including instant criminal searches.