The first kind costs hundreds dollars per candidate. The second can be done for about twenty bucks worth of time. You can guess which approach most companies use.
It's easier on most candidates, too, because a real background check requires them to fill out paperwork. An ad hoc one they may never know about...unless they fail.
IBM. Wells Fargo. Frontier Airlines. T-Mobile. Experian. Daimler Chrysler.
These are some of the companies listed in the article. They are some of the biggest in the world. They don't seem to me to be the type of companies that take the latter approach to recruitment, possibly opening themselves up to discrimination legal issues.
I just find it incredibly sad that the people conducting these background checks at such large companies are so utterly incompetent.
Hiring somebody is risky and expensive. The cost for getting it wrong is quite high. At best, it costs the team money in lost productivity. At worst, the new hire actually is a criminal (or whatever).
Given two otherwise equal applicants, it's only prudent to hire the one that doesn't have nasty Google results.
Even if dismissed or wrongfully convicted, any mention of anything criminal would cause concern. It's that idea of "where there's smoke there's fire" type of thinking that seems to go on around this kind of stuff. When other candidates exist without the 'concerning circumstances,' why take a risk?
For better or worse, it makes sense. Seeing that someone was arrested for crack for any reason would raise suspicion. There would be little motivation to look into further details once seeing "arrested for crack" pop up in a search about a candidate.