Background investigations and reference checks are employers' principal means of securing information about potential hires from sources other than the applicants themselves.

A background investigation generally involves determining whether an applicant may be unqualified for a position due to a record of a criminal conviction, motor vehicle violations, poor credit history, or misrepresentation regarding education or work history.

A reference check generally involves contacting applicants' former employers, supervisors, co-workers, and educators to verify previous employment and to obtain information about the individual's knowledge, skills, abilities, and character.

In the context of hiring employees, it is critical for firms to hire both the best candidates and also to avoid bad hires. Firms are therefore increasingly using background screening services to avoid the mistake of poor hiring.