Before you hire employees, you screen them carefully.  But when you bring in contractors, you lower your guard. 

Many business owners assume that contractors pose less risk than employees. But outsiders who work temporarily at your organization can still present problems, from stealing proprietary information to mistreating your customers. 

“Anytime you use contractors, they are a human resource and should be handled that way,” said Johnny C. Taylor Jr., co-author of “The Trouble With HR.” “That means you should always do a background check or make sure the agency you work with can vouch that it has done a background check.”

In the late 1990s, Taylor was senior vice president for human resources at a company that owned amusement parks. Through an employment agency, the firm hired a temporary worker who was a convicted child molester. 

When the media learned that the amusement park employed this individual, “parents went berserk,” Taylor recalls. 

His team had relied on the agency’s claim that it conducted background checks.

If you use an employment agency, exercise vigilance. Scan its written agreement so that you understand its role and responsibilities in vetting, selecting and assigning workers to your company. 

“You’re only as good as your temp agency,” Taylor said. “Make sure it does comprehensive background checks. Don’t just take its word.” 

Also, review the contract to determine how much you’ll owe the agency if you subsequently bring aboard the temp as a full-timer. By negotiating these fees upfront, you avoid nasty surprises later. 

Seasonal surges in business may require a quick ramp-up in hiring outsiders. The rush to plug personnel holes can lead to sloppy vetting procedures. 

Many vendors provide a full slate of background screening services. Check whether they conduct international background checks as well as verify contractors’ education and credentials. 

Professional contractors such as accountants, attorneys and training specialists also pose a risk. While business owners may choose these experts based on a referral from a trusted source, it’s prudent to dig deeper. 

Taylor suggests typing the person’s name into a search engine and checking social networking sites. He adds that some states offer free online databases that list criminal records and other information on file with police departments. 

“You may need their Social Security number and birth date to do a thorough background check,” Taylor said. “Also ask, ‘Where have you lived for the last seven years?’ Use the answer to identify states where they’ve lived that you need to check.” 

Even though smaller businesses tend to skimp on such screening, their exposure is greater than that of large employers. 

“There’s only so much damage one person can do to IBM,” Taylor said. “But if you’re a small firm, one person can ruin you in a matter of days.”

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