I mean, they're pretty effective for determining whether people have convictions (caveats apply, depending on your jurisdiction) for that kind of stuff, right?
One of the problems with not doing background checks is ex post facto if you do have problems with an employee, and it turns out that you could have discovered them with a background check, then that can figure into your liability.
The main thing that makes me uncomfortable is that they will raise all sorts of unrelated things that can bias you or others in your company against a candidate, or even if you choose to ignore them, be brought up against you if it turns out you hired someone with a drug conviction or something unrelated to their work at your company.
I don't really give a shit if someone was arrested for a drug offense (or many other offenses), and knowing that information brings up all sorts of complications, to the degree that it outweighs the value of knowing relevant stuff (largely because genuinely relevant things from a background check are rare).
What you do is decide what you care about from a conviction perspective (say, crimes of dishonesty, serious violence etc). Then you write up a policy that says these are exclusionary. Then you only let HR run background checks immediately pre-contract, and you don't let anyone outside of the immediate background check team see any of that stuff. They're empowered to give you a yes/no to hire, but that is all.
Hiring managers should not be looking at BGC material.
Are they? How much will that differ between an employee from Peru, one from Canada, and one from Romania? How comparable will the data be, how much data will you even get in the first place?
And what kind of employee will you lose if you set such restrictions?
In some countries (e.g. US) people are convicted all the times for things they haven't done. Or have done but which is in the past and really irrelevant for the job.
On the other time people are not convicted for a lot of kinds of white collar fraud all the time, too.
One of the problems with not doing background checks is ex post facto if you do have problems with an employee, and it turns out that you could have discovered them with a background check, then that can figure into your liability.