Expediting Background Checks through Electronic Signatures

Staffing professionals focused on hiring and onboarding are no different; they’re looking constantly for solutions that expedite the hiring process and decrease the cost of processing applicants. One such method is the electronic job application, which then populates the applicant tracking solution. Applicants simply fill out the application online, and the data flows seamlessly without the need for duplicate data entry. This saves time and money.

Panacea for Background Checks?

Now that the applicant’s personal data has been captured in the electronic application, wouldn’t it stand to reason that the background check process can become fully automated? Yes and no.

The Fair Credit Reporting Act mandates that applicants must grant written authorization that allows employers to conduct a background check. Traditionally, employers provide this document to job applicants and ask for a “wet”—or traditional ink—signature on the document. This document is then filed away for proof of signature or sometimes faxed to the background screening provider for processing.

So with all the technology available today, why can’t we just obtain consent electronically and move on?

The answer is that we can. The Electronic Signatures in Global and National Commerce Act was signed into law by President Clinton in 2000 (both electronically and in ink), giving electronic contracts the same weight as those executed on paper be it for background checks or any other purpose. However, just because it made this form of consent lawful doesn’t mean that it mandated recognition of such signatures if both parties didn’t agree to the format.

Fly in the Ointment

While employers are obligated to certify that they have received consent to conduct a background check, most services requested do not require a hard copy of the authorization form. However, when employers conduct employment, education or professional license verifications or access motor vehicle records in a small number of states, it is rare when proof of signature is not required. Most employers and academic institutions will not release information without proof.

Here’s where things can unravel with electronic signatures. This requires the requestor of information to fax a hard copy of the release to their screening provider and for the screener to fax it to the information provider, thus adding time and effort to the process.

In a recent study conducted by employeescreenIQ, we submitted 500 electronic releases to past employers and academic institutions as proof of applicant consent. These signatures were recognized only 45 percent of the time, resulting in information being provided. Fifty-five percent of the time the source of information refused to provide a response until a wet signature was faxed or scanned and e-mailed as proof. That means that 55 percent of the time, this screening company had to go back to the requestor and ask for a hard copy of the signature. In each case, the requestor had to go back to the applicant and seek a wet signature. Once received, requestors had to fax or e-mail the executed document. This slowed down the process drastically and ran the risk of creating a negative impression on the job applicant.

Other findings:

• Academic institutions accepted only electronic signatures 41 percent of the time.
• Employers accepted only electronic signatures 43 percent of the time.
• Larger employers rejected electronic signatures far more often than small to mid-size employers.

When Do Electronic Signatures Work?

If an employer does not conduct employment, education or professional license verifications or check motor vehicle records in a small number of states, the electronic signature will do the trick. At the time the background check is conducted, the employer certifies that it has written authorization to conduct a background check. In this case, the electronic signature allows the process to be automated completely. No more faxing of releases. The electronically signed document is simply submitted with the other applicant information and transferred seamlessly to the background screening company. That document can then be fed electronically to the information sources and the information sought can be returned by them in the same fashion. For those looking to cut down on paper, this has the added benefit of being an environmentally friendly process.

In 2008, the National Association of Professional Background Screeners (NAPBS) presented some helpful guidelines for utilizing electronic signatures:

• E-signature process should require the applicant to consent to electronic storage and submission.
• Choices for consent should be stated in unambiguous terms (“I consent” and “I decline” vs. “send” or “submit”).
• Applicants should be informed of their right to withdraw consent and explain any conditions, consequences or fees that would result from such a withdrawal.
• Provide explicit instructions for applicants to request a copy of their record in nonelectronic form (i.e., A Summary of Your Rights Under the FCRA).
• An electronic record should be retained and readily available for reproduction.
• Outline the hardware and software requirements for accessing and retaining the electronic records that the applicant is consenting to receive.

How to Improve Recognition of e-Signatures

As time goes on, more institutions will begin recognizing these signatures. But rather than wait, organizations are getting more and more creative. One of employeescreenIQ’s strategic ATS partners, MyStaffingPro, allows releases to be signed electronically with a mouse rather than a checkbox. The company is then able to catalog the signature and store it on file through a third-party auditor for future authentication. Other advanced organizations obtain signatures through electronic pen. Both forms of electronic signature should improve acceptance significantly as most verifying institutions want to just see some form of a scribble.

Conclusion

The concept of developing a completely automated and paperless background screening process is right at our fingertips. For those who do not require verification services, electronic signature is a proven way to expedite the process and reduce the labor involved in requesting a background check. The process has not been perfected for those who require verification services, but we are closer than ever to realizing success in this regard. We can’t make people recognize these signatures, but we will continue to innovate creative solutions until they do.

Nick Fishman is chief marketing officer for Cleveland-based employeescreenIQ, a best practices provider of employment screening services throughout the U.S. and worldwide. Nick can be reached at (800) 235-3954 ext. 441 or

Editor’s Note: This article should not be construed as legal advice. Always seek legal counsel to obtain up-to-date information before conducting international screening.