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Background checks can help you avoid hiring someone who has a history of workplace violence, dishonesty, or one who simply isn't who or what they say they are. You don't want to pay for a Harvard MBA sales manager if you're only getting a high school graduate, do you?
Performing a background check also has legal ramifications. If you don't run a background check on employees before hiring them, and they subsequently commit a crime against another employee or customer while on the job, you could be held liable for negligent hiring.