As business owners and human beings we want to believe that the people we interview for jobs are telling us the truth about their abilities and experience. However, it’s wise to remember the Russian proverb that President Ronald Reagan often quoted: “Trust, but verify.”

Most of us do make an effort to check references and past employment. We may also feel that a technical person who overstates his or her abilities will soon be found out, so they’re less likely to lie and, therefore, our risk is minimal. Unfortunately, there are a number of other reasons to check into a potential new hire’s background:

1. Theft. According to a 2012 study by the Association of Certified Fraud Examiners, U.S. employees steal $50 billion each year and 27% of companies surveyed have seen increases in theft. Obviously, an employee who has access to cash and credit cards needs to be carefully screened. But what about workers who have access to expensive tools, manufacturing equipment, computers or the property of other employees? Then there’s another kind of theft we seldom consider: Intellectual property such as proprietary machining methods or processes, CAD drawings or critical customer relationships. A thorough background check may help identify applicants who have been dishonest in the past.
2. Illegal workers. The government holds business owners accountable if they hire foreign applicants who are not eligible to work in the U.S. Using the federal E-verify system and obtaining required documentation can help, but these only go so far and don’t take the place of thorough background checks.
3. Workplace violence. Although violence in the workplace is relatively rare, almost 600 people are victims of violent deaths in U.S. workplaces each year, and about 500,000 non-fatal workplace assaults are reported annually, according to The National Institute for the Prevention of Workplace Violence. Although a criminal background check can uncover previous arrests and convictions, checking with past employers may also uncover an unreported history of violent behavior.
4. Drug use. Few situations are more dangerous than someone high on drugs operating machinery. Habitual drug users also tend to have poor attendance and overall performance records. Instituting a drug-free workplace policy that includes random drug tests can help head off potentially costly problems.
5. Sexual harassment. Employers are responsible for maintaining a workplace that does not tolerate sexual harassment of any kind. A background check may reveal if an applicant has been charged with sexual misconduct either in or out of the workplace.
6. Lost productivity. If a new hire brings any of the forgoing issues to the workplace it can cause undue stress on other workers and management that gets in the way of productive work. It can also result in lost time dealing with investigation, disciplinary actions, legal consequences and building a case for termination.
7. Liability. While the main reason for using background checks is to protect the business and its employees from the problems associated with a poor hiring decision, companies could also find themselves and their executives open to litigation if they fail to perform due diligence during the hiring process.

Thorough pre-employment investigations including official criminal background checks, verification of previous employment and job performance, and drug testing can save a company a great deal of trouble. There are no guarantees, of course, but you’re less likely to hire a problem employee if you do your homework. One word of caution: It’s important to establish and document specific background check policies and apply them consistently to everyone who applies for a job. That way every applicant is treated fairly and you can defend yourself against any charges of discrimination.