Why Contractor Background Verification Is Critical In The Construction Industry

The construction industry is currently under pressure to deal with labor shortage; background checks can reduce hiring efforts and expedite the process. Here’s how.

contractor background

[Originally published Nov 19, 2019 Last Updated August Aug 4, 2022]

According to Timetric’s Construction Intelligence Center (CIC), the construction industry is projected to show tremendous growth in 2020. As a result, the employment rate and wages for this industry is projected to be higher than the overall economy. Naturally, there is constant pressure on businesses to recruit workers and to conduct contractor background verifications quickly. 

A report by the Bureau of Labor Statistics highlighted that there were 7.2 million construction jobs in July 2018. That marked the highest employment level for the sector in a decade, after the recession.

Despite the upward employment trends, the majority of general contractors are concerned over the labor shortage, and more than half of them have reported trouble finding skilled workers.

Since the jobs in the construction industry are time-driven, physically-demanding and regulation-oriented, businesses must hire competent personnel, i.e. skilled workers, with a clean working background, who can withstand the pressure of the job.

Conducting a pre-employment background verification can reduce the efforts of the hiring team at the construction company and help them find the right employees – quickly and fairly. If you haven’t thought about it, here’s why you should.

Why should you conduct a contractor background check?

To safeguard site equipment

The equipment used at most construction sites is expensive, with some of them even holding personal property and valuable proprietary information. The safety of the machinery and data becomes important.

Here, conducting a background check for contractors is like taking precautions. You can promptly assess job applicants on various parameters, including their work experience, references, credit score, and criminal history.

You may not find any red flags post-employment screening, but it will give you the confidence to recruit reliable workers and safeguard your equipment and sensitive data in the process. 

To confirm licenses for construction workers

While there are no clear laws specifying the extent and reach of background checks for the unorganized sectors in India. Unlike the West, where the laws are governed by the Fair Credit Reporting Act (FCRA). 

Contractor Background Check Requirements

As per the RBI, all Indian companies who are ISO 27001 certified are required to conduct background screening on their current and prospective hires.  

In India, there is no defined legislation governing the aspects of background verification. The practices differ across sectors and organizations. A comprehensive contractor background check in the construction industry would include verifying the address, educational qualification, past employment, criminal records, address proof, PAN card, Aadhaar card, voter card, ration card, and driver’s license. 

For the blue-collared and on-demand workforce, these checks are a way to mitigate the financial, safety and reputational risks for the employers. 

Tools such as SpringVerify can help you select candidates authorized to handle all their on-the-site duties.

To maintain the quality of work 

The construction business majorly revolves around making quality infrastructure and physical facilities. Hiring inexperienced workers for the job can put the company’s reputation at stake, and endanger the lives of the general public. 

With standard background checks for contractors, you can put the right people on the job and protect your business from negligent hiring claims.

To keep everyone on-site safe 

Construction and physical labor go hand-in-hand. While the quality of work is necessary to stay in business, it is the safety protocol that enables the construction workers to do their job well.

If you hire someone not too careful about their safety and that of others, you put not only the entire project in jeopardy but also human lives.

Human life in any industry can’t be taken lightly!

Contractor background screening within rights 

Background checks can unearth sensitive information that could raise objections or make many applicants uncomfortable. Therefore, it is important to understand a few things. 

Ensure that the agency conducting the contractor/subcontractor background verification does not end up violating the data protection laws. The absence of solid laws makes it difficult to create best practices for background screening.

At all times, the company conducting a background verification must get written consent from the applicant/employee and be transparent about the reason for the same, which in this case will be an employment decision. This is in lieu with Article 21 of the Constitution of India which protects the privacy of the individual from unlawful intrusion. 

According to the Federal Trade Commission that enforces the FCRA, a company conducting a contractor background verification must get written consent from the applicant/employee and be transparent about the reason for the same, which, in this case, will be employment decisions.

Since labor unions are a huge part of the construction industry, any information a company obtains through employment background verification shouldn’t be used to discriminate against the worker.

Summing up

If you operate a construction business, it is your responsibility towards your employees and clients to recruit staff that safeguards the teams, equipment and the sensitive data present on the site. With our help, improve the speed of your recruitment process and save yourself from the hassle of hiring wrong.

Doing background verification yourself is complicated and time-consuming. Try our employee background verification platform, Springverify – where employee verifications happen seamlessly and with minimal effort required from both the company.


Do I need to run background checks for temporary workers?

Even temporary workers should undergo a background verification before they can join. Hiring anyone without having a proper understanding of where they come from, their experience, and records can prove to have a negative impact.

What do construction companies need to focus on the construction workers’ background check?

A construction background check involves checking the qualifications, past employment, criminal records, address verification, ID checks, ration card, etc. They should focus on building a strong policy on drugs and alcohol and verifying the criminal records of the worker along with a regular governmental check.

Can you require independent contractors to undergo background checks?

Even your independent workers represent your company. Hence, it is better to conduct a background check before they join you.

[Originally published Nov 19, 2019 Last Updated August 4, 2022]

Dhristi Shah

Hi, this is Dhristi, Content Writer and Editor at Springworks India. I am a keen learner and am passionate about everything related to writing.

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