How to Choose the Best Background-Screening Provider

The stakes for choosing a background-screening provider have always been high, but now that decision looms larger than ever. As laws governing background checks constantly shift, regulatory oversight expands and the ranks of applicants misrepresenting themselves grows, selecting a vendor to conduct background screens of your candidates assumes greater weight.

Visit SHRM's Guide to Background Screening Systems for a side-by-side comparison.

Yet complying with the requirements of regulators and legislators is only half the battle in background screening. Vendors and employers alike must roll out the red carpet for a third member of that screening triad: job applicants themselves. Poor experiences during the application process can turn off top candidates and reflect badly on an organization's brand.

SHRM Online interviewed industry experts and HR practitioners for advice on how to evaluate and choose a background-screening partner. Included is an extensive comparison of top screening vendors in the market.

Compliance Is the Top Criterion

Experts agree that any selection process should begin by verifying that a screening provider is accredited by the National Association of Professional Background Screeners (NAPBS). That seal of approval ensures that a provider has been independently audited to confirm it adheres to best practices across the breadth of its operating procedures and policies.

[SHRM members-only toolkit: Conducting Background Investigations and Credit Checks]

Because background screens must comply not only with federal law but also with differing state and local legislation, providers need to monitor diverse and ever-shifting laws, said Les Rosen, an attorney and CEO of Employment Screening Resources, a San Francisco-based background-screening provider. One area that requires close attention is the fast-growing "ban-the-box" movement that mandates removal of criminal history questions from job applications, delaying those questions until later in the hiring process. Currently, the law has been adopted by 25 U.S. states and many other cities and counties.

Julia Mair, chief marketing officer for New York City-based screening provider Sterling Talent Solutions, said the top screening challenge that Sterling's customers report is ensuring compliance in a shifting regulatory and litigation environment.

"Every time a state, city or county changes a ban-the-box regulation, employers need to be aware of that," Mair said. "Screening providers have to be able to monitor and communicate those changes to clients that are hiring in those geographies or it opens the door to litigation."

Screening providers should conduct criminal records searches using the most accurate means possible, Rosen said, which still requires onsite visits to courthouses rather than searching online databases.

"Database-only background checks can be the enemy of due diligence," Rosen said. "In any database, there are false positives and false negatives and records aren't always complete or up-to-date."

When a criminal record is reported, Rosen said, screening firms should have experts on staff to review the record and determine if there are any legal issues in reporting findings.

The federal Fair Credit Reporting Act (FCRA) governs how background checks must be conducted and requires providers to use procedures that ensure maximum accuracy in reporting.

"Providers should have the ability to quickly notify their clients of any changes in the FCRA or other applicable laws," Rosen said, and also should conduct annual FCRA compliance audits of their own operations.

To protect data privacy, Rosen said, HR professionals should ask if the screening is performed by workers in the United States; if the work is offshored, providers should explain how data privacy will be protected. Vendors also should know about the European Union (EU)-United States Privacy Shield Framework launched in 2016—regulations that replaced the Safe Harbor Framework provisions—and should comply with data privacy requirements for screening applicants from EU countries.

With more employers screening candidates with international backgrounds, Mair said, it's important that screening providers be equipped to conduct background checks in countries that may still rely on paper-based records or have varied jurisdictional laws.

Turnaround Times and Costs

With hiring decisions tied to acceptable background checks, HR naturally seeks the fastest turnaround times possible, especially in high-volume hiring scenarios or when there is fierce competition for talent. Although improvements in technology and data-sourcing practices have reduced turnaround times, most standard criminal records searches still take between 24 and 48 hours, screening experts say. A basic criminal search can be done faster, while screens that include employment, education and reference checks will take longer, as will most checks of applicants with international backgrounds.

There isn't wide differentiation in pricing among providers, but "buyer beware" still applies. "If costs are too cheap, you might be getting questionable database results, practices that aren't FCRA-compliant or customer service that isn't high-quality," Rosen said.

Providers can take shortcuts in sourcing records to reduce their costs, he added, so it pays to understand data acquisition processes. "Unless an employer knows how the sausage is being made, they wouldn't have an idea that they are not getting accurate and actionable criminal record reports," he said. While screening firms access similar information, the methods and supply chains they use to source records can differ.

HR buyers should seek screening providers that match their organization's business strategy and culture, said Melissa Sorenson, executive director of the NAPBS. If your company is technology-oriented, depends on a fast onboarding process or places high priority on the candidate experience, you should seek screening companies with strengths in those areas, she advised. "Identifying a screening partner that aligns with your priorities and corporate values enhances the partnership as well as the applicant experience," Sorenson said.

Technology Considerations

The sophistication and flexibility of a vendor's technology platform separates top providers from the rest of the pack. Any vendor should have an intuitive, scalable and configurable screening platform, experts agree.

"Mobile access, automated data entry and real-time reporting capabilities are key today," said Joe Jaeger, chief revenue officer of First Advantage, a background-screening provider headquartered in Atlanta. "Hiring managers and recruiters are often on the run and need the ability to access screening reports and confirm answers that aid in making faster hiring decisions."

Global capabilities play a larger role today, Jaeger said. "Finding a provider that operates on a global platform with customer service delivered by those who understand local laws and regulations is highly valuable when screening an increasingly global workforce," he explained.

The ability of vendors to integrate with a wide variety of applicant tracking systems (ATSs) has become table stakes in the selection game. Such integration creates workflow efficiencies that make life easier for HR and job applicants. With candidate data pouring directly into an ATS, employers can store information such as past employment, education and any criminal history in one location and reduce administrative processing time. For job candidates, such integration eliminates the need for frustrating dual entry of personal data like Social Security number.

Platform flexibility is an important selection criterion, Sorenson said. "The regulation and litigation in this space is such that there are constant changes that require employers to amend forms and processes based on their own risk tolerance," she said. "Ensuring that your screening partner has flexibility in its system to allow for such changes is important."

Top systems also allow applicants to enter required personal information or provide consent for checks via self-service portals and mobile devices, not just by fax or computers. Mobile-friendly systems serve applicants on the devices they use most, and self-service portals create fewer data entry mistakes and less time wasted playing phone tag or completing cumbersome paper forms.

"HR should be able to automatically send personalized e-mail to applicants so they can fill out forms to initiate the screening process and also receive completed reports easily," Rosen said. "Everything today should be mobile-friendly and paperless."

Candidate Experience

How vendors treat applicants during the screening process also should factor into selection decisions, with a smooth and transparent application experience being the goal. Vendor systems and staff should be equipped to answer applicant questions promptly and offer user-friendly dispute processes should issues or discrepancies arise around report results.

"Applicants should know what to expect from the process and be kept informed throughout," Sorenson said. "If they have questions, they should be able to get in touch with providers easily, and when they request a copy of a report, they should receive it efficiently. A seamless ability for applicants to interact with a potential employer and a screening provider makes the process quicker, smoother and more enjoyable for the entirety of the relationship."

Hiring employees with criminal records or who falsify employment or educational histories can have lasting fallout for organizations. That makes choosing the best background-screening provider among the more important decisions that HR leaders will make.

Dave Zielinski is a freelance business journalist in Minneapolis.

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