There may be more at stake in choosing a background-screening provider than in any other decision a HR leader makes when partnering with an industry vendor. A tight labor market means recruiters can't afford to dither when offering jobs to top candidates, yet if they cut corners on how background screens of those applicants are conducted, that decision can come back to haunt them—not just on the job but in the courtroom.
Employers need to find a screening provider that can generate speedy and accurate background checks without putting the organization at legal risk by failing to comply with a growing array of regulations governing the screening industry.
Finding the Right Screening Provider
Experts say the first step in choosing a provider should be to ensure it is accredited by the National Association of Professional Background Screeners (NAPBS). Accreditation means providers have achieved certain standards for information security, legal compliance, researcher and data verification capabilities, client education and more.
Employers should then evaluate providers on their ability to comply with an emerging set of new regulations and the Fair Credit Reporting Act (FCRA), the speed and cost of their reports, their use of modern technology to streamline the screening process and their client service.
Most providers promise a one-to-three-day turnaround on background reports, depending on the breadth of information requested. Basic background screens typically include a Social Security number trace, national criminal database search and search of sex offender registries, and they are often priced between $25 and $35 per applicant. More extensive reports can include seven-year county criminal court searches; verification of employment, education and professional licenses; drug testing; credit reports and social media searches. Most screening providers offer preconfigured versions of their services at basic, standard and premium levels that are priced to reflect differences in the breadth or rigor of those reports.
While a quick turnaround on reports is crucial after a job offer has been made to ensure candidates stay interested in the offer, experts say it's important not to sacrifice screening quality for speed. "Limiting the scope of a background check, whether by focusing on a smaller time period or omitting aliases or dates of birth, can put companies at risk for missing potentially crucial information," said Mary Delaney, president of CareerBuilder Employment Screening in Chicago.
Providers today find access to screening data easier with more modern technologies, but that doesn't eliminate the need for human assistance in validating criminal or civil court records, said Max Wesman, chief product and strategy officer for screening provider GoodHire in Redwood City, Calif. Online databases can sometimes contain outdated or incomplete records or show false positives, when a candidate being screened shares a name and birth date with someone who was convicted of a felony.
"We believe in a hybrid approach that uses technology where it makes most sense to make the process efficient but also relies on human intervention to catch false positives, mistakes or things that aren't compliant, because sourced data isn't always perfect," Wesman said.
Technology Considerations
Screening providers also should have modern, intuitive applicant and client portals that are easily integrated with a client's HR system, experts say. Candidates should be able to consent to background checks, answer screening-related questions, register for any needed drug tests and provide information electronically from smartphones or tablets.
Making that process text-friendly is increasingly important for today's workforce, Wesman said. "A growing number of employees don't have e-mail addresses, so being able to send SMS or text notifications when additional information or assistance is needed for background checks is crucial."
Providers should have technology that allows clients to see real-time background reports and interact directly with courthouses or other information sources. "That allows providers to bypass the need in many cases to wait for someone to answer their phone or physically pull records," said Melissa Sorenson, executive director of the NAPBS.
Data security is a growing issue for job candidates and employers alike, experts say.
"In the last year we've seen a significant increase in candidates expressing concern about how the data collected during background checks is stored and protected," said Les Rosen, founder and CEO of screening provider Employment Screening Resources in Novato, Calif. Ensuring that vendors have NAPBS accreditation and have passed a systems audit are important steps to verifying data security, Rosen said.
Compliance Risks Grow
Background checks that don't comply with provisions of the FCRA can put companies at risk of substantial civil and statutory penalties. Unlike other consumer protection statutes, the FCRA doesn't cap damages on class-action litigation, making the background-screening industry an attractive target for plaintiffs' counsel, Sorenson said.
The FCRA requires that candidates be properly informed that a background check is being run and give their written authorization to do so. The regulation also requires employers to send candidates copies of the screening report and give candidates notice before making any final employment decisions based on screening reports.
Complying with the FCRA is only one of the regulatory challenges that organizations face, Rosen said. Legal hurdles include more state laws prohibiting employers from requesting salary-history information, restrictions on using credit reports, the risks associated with social media screening and the ever-expanding "ban-the-box" legislation, which prevents employers from asking candidates—such as through a box to be checked on an employment application—whether they have a criminal record.
Some screening providers say clients are expressing growing concerns about these compliance issues. "One thing we're hearing from customers is they want a better understanding of their risk exposure when doing background screens and hiring talent," said Tom Ellis, senior vice president of operations for First Advantage, a screening provider based in Atlanta.
As these regulatory changes increase, employers should be able to rely on screening providers to keep pace and administer compliant workflows, forms and notices, as well as have staff that is up-to-date on the latest regulations, Delaney said.
Emerging Screening Trends
Other emerging trends are influencing screening vendor choices. More companies need to rescreen employees after they've been hired, for example, a practice known as continuous monitoring.
"In addition to highly regulated industries that often require ongoing or periodic screening, the workforce being screened today includes a significant percentage of gig or on-demand workers who don't come into the office every day," Sorenson said.
Others who are candidates for continuous monitoring include workers with unsupervised access to the public or those who work with vulnerable populations. Delaney points out that there are millions of arrests each year, and there is usually a delay between arrest and conviction, so it may be wise for employers to rescreen where they see the greatest risk.
Another developing trend is the rise of the applicant-generated background report, in which candidates buy their own report and send it to an employer as part of the application process. "Employers do need to understand that this kind of applicant report is for introduction only, and before any onboarding process, an employer should subject everyone to the company's own process to ensure all applicants are screened using the same standards," Rosen said. These reports may eventually be helpful in the gig economy, he continued, as contract workers move from client to client and can present their credentials to increase their chances of being hired.
Dave Zielinski is a freelance business writer and editor in Minneapolis.