Relationships are essential for every organization’s operations regardless of the agency, non-profit, or business you are running. But such relationships cannot be entered into lightly. When you are getting a key supplier for your company, it is crucial to learn about the new relationship as much as you can. Because getting into a bad relationship may cause grave consequences for your company. It would damage your brand and can even cause the risk of financial penalties, legal action, or both.
Vendor Background Screening
It is normal for companies to work with many vendors that help manage the work processes and complete the company’s projects. In fact, the vendors a company works with are like an extension of the organization, especially when the vendors place their individuals on-site in the workplace. For instance, in a health system, the traveling nurses and volunteers have access to patients and restricted areas in the organization. This means that the organization must know who these vendors are.
Basically, with how involved a vendor can be in a company’s daily operations, it is crucial to ensure that the company knows who they have in their workplace. That is where vendor background screening comes in. With the vendor credentialing background check, the company would not be vulnerable to any poorly scanned third parties. It would become easier to protect visitors, customers, clients, and employees by knowing who is joining the company.
Why is vendor background screening important?
Getting a vendor background screening done for each and every person representing your organization, including the contractors and sub-contractors, can help you reduce your company’s liability. In fact, it is important to make sure that the vendor credentialing background check should be performed in the same way the employees’ background check is done.
The process and assessment must comply with federal laws such as the Fair Credit Reporting Act (FCRA) and other state and local laws. Because at the end of the day, if something wrong happens, the company can be liable for all the damage caused. This means that the company would have to spend a lot on lawsuits, compensation to victims, and penalties to the government.
Risks of Not Screening Your Vendors
Conducting a vendor credentialing background check is not just a precaution but a necessity for every workplace. As a matter of fact, without vendor screening, the company would come across a lot of uncertainties and would also risk the customers/patients involved with the organization. Other than financial loss, the company would also suffer from reputational loss, which in turn, would make them lose clients.
Let us take an example to understand what can happen without a proper vendor background screening program in place. Let’s say there is a hospital that has accepted some volunteers to join and help with making the patients happy and to spread positivity. These volunteers would have all the patient details, and without screening, you would not know what might go wrong.
Now let us say that one of the volunteers isn’t qualified enough to get a blood test and is assigned to do so. And in this case, the person injures the patient, and they file a lawsuit against the hospital for not being experienced enough to handle patients properly. Not only would the hospital lose its reputation, there would be a loss of patients and the hospital would have to spend a lot on paying off penalties and for the lawsuit. It can also lead to the shutting down of the hospital. This makes it very important to get a vendor credentialing background check done.
Regardless of the type of industry, the risk of not conducting a vendor background screening include:
- Reputation loss: In case there is an unscreened contractor or vendor that causes any mishaps in the workplace, you will lose reputation, customers, and even money.
- Lawsuits: When something wrong happens because your company did not conduct a proper vendor credentialing background check, it can lead to costly lawsuits and penalties.
- Compliance Issues: Some rules in the state or federal government does require you to get the background check as per the vendor checklist. Not doing so would mean non-compliance, which would cause you legal issues.
What to Check in Vendor Background Screening?
When you are about to start a new relationship, it is essential to know who you are about to involve in your business. Learn all about the company, their employees and owners, and check their track record. Regardless of the kind of vendor you are starting a new relationship with, you need the peace of mind that the relationship will not cause your business issues, expose it to compliance violations and additional risks.
There are two categories of a vendor background screening, including the vendor workforce screening and the company background checks. Each of these types has its own different screening services for you to meet your needs. They also answer some of the most important questions that you might have in mind about your new vendor. Both types have been explained below:
#1 Company background check
As mentioned before, when you are about to start a new businesss in Hong Kong or anywhere in the world relationship with a vendor, you need to know all about its history that can put your company at risk. The vendor you are about to get into a relationship with can have a past where they were involved in something illegal. They can even be doing business in a different name to hide their past. Whatever it is, you would want to know.
The background check helps companies like yours. This would let you know all about the perspective and existing vendors in your company through targeted due diligence searches, which includes:
- Federal and state debarment matches
- Regulatory violations
- Government sanctions
- Pending judgments and liens
- Social media
- Bankruptcy cases
- Civil litigation
- Criminal convictions
- Corporate record verification
#2 Vendor workforce check
Other than the vendor company, the vendors’ employees are usually the main people in the workplace while working as an extension of your full-time workforce. For instance, the vendors’ employees can be the custodial office staff, patient transportation workers, or contracted food service personnel. Whoever they are, you need to ensure that they go through the complete background check as per the vendor checklist.
Through the vendor background screening, you will be able to control who works for your organization and who does not. It will help you find out if the vendor employees have the legal work authorization and if they have the needed license to work for the company. Some of the things in the vendor background checklist includes:
- Drug testing
- Driver records
- Employment exclusions and debarments
- Employment verifications
- Criminal history
How to Get Started with Vendor Background Check?
The vendor background screening done by the background check companies is very similar to an employee background screening. Here is what you will need to do in the process:
- Prepare your screening goals: You need to create a vendor credentialing background check checklist of goals based on what you are looking for and what you want to avoid. You also need to make a list of all the kinds of vendor workforce searches you need to check for your company and industry. Keep in mind that you might also have to professionally conduct the screening, which complies with the state and federal law based on your company’s industry.
- List down vendors based on categories: Once you begin with the vendor background screening, you will see that your organization works with many vendors compared to what you thought. So, it is always a better idea to make a list and categorize all the vendors. This will help you know the extent of your vendor network and the potential associated risks.
- Get the help of an expert background screening provider: Finally, doing the background check on your own is possible but may not be reliable. Getting a professional to do it is much better as they usually have access to some of the most diverse databases out there. In fact, they will also know the kinds of background screening services you need for the vendor you have. You will get guidance and support at every step.
Trusted Vendor Background Screening Partner
Before starting a relationship with a new vendor, ensure that you are not exposing your organization to risk. Vendor background screening is a potent tool that will let you know about the company and its workplace before they join your company.
Startuprbooks is one of the top background check companies that can help you with the screening and vendor due diligence. We can help you check everything before you start your new relationship with a vendor. Contact us today!