A new report captures the trends and emerging practices of assessing your job candidates.
By Mollie Lombardi
Employment screening is a critical and common step in the hiring process in most organizations today, and it is one that organizations need to execute quickly, accurately, and effectively. The need to mitigate the risk of hiring an individual who is not qualified for a role is real and is a valuable outcome of screening, but the cost to deliver this value is also a critical element that organizations must consider. A recent research brief from Aberdeen Group, based on more than 400 survey respondents from Aberdeen’s 2010 Talent Acquisition Strategies study, looked at the components of background screening that are most widely used, how they are impacting the speed of the hiring process, and the value derived by the integration of background screening with recruitment processes and recruitment technologies such as applicant tracking systems (ATS). The findings from the report are of more than passing interest.
Top Talent Acquisition Practices Include Screening
More than three quarters—78 percent—of all survey respondents in the talent acquisition study cited the use of employment screening solutions, and this number is even higher for best-in-class companies. (Key performance indicators used to determine the best-in-class for employee performance management include 89 percent first-year retention of new hires over the past two years, as compared to only 68 percent among laggard organizations; 87 percent of new hires being the top-ranked candidate, as compared to 46 percent among laggard organizations; and 6 percent year-over-year decrease in the time-to-fill vacant positions, as compared to an 8 percent increase among laggard organizations.) In fact, companies using employment background screening are 43 percent more likely to achieve best-in-class results than those that are not.
The pressure to make good hiring decisions is even more critical today, as Aberdeen’s research has shown that a shortage of key skills in the marketplace is the number one pressure organizations are facing in their hiring activities. With good people in high demand, ensuring that a step like background screening does not become a speed bump in the hiring process is critical. If a top candidate is contemplating two offers and it takes too long for a background screen to be completed, there is a risk of that candidate taking the other offer. In addition, hiring manager satisfaction plays a critical role in determining quality of hire today. Best-in-class companies cited it as the most critical element making up quality of hire. Making the process efficient, effective, and seamless for that manager can have a big impact on satisfaction. The following sections will look at what employment screening is, and how organizations go about selecting a partner for this important part of the hiring process.
What’s in a Screen?
So what is employment screening exactly? Screens check criminal backgrounds, previous employment and education experience, references, drug use, and I-9 verification.
The need for background checking is important when it comes to managing the risk inherent in hiring. Even the most seemingly ideal candidate can have issues unearthed via a background check that may make them ineligible (or undesirable) for hiring. And in today’s ultra-competitive environment, prospective employees may be more inclined to stretch the truth about their educational backgrounds or previous employers, and organizations must protect themselves and their other employees and customers.
It’s also worth noting that particularly in certain environments, these two elements are even more critical. For financial services, healthcare, and public sector verticals, these top two background screening elements are even more important.
Integration Impacts Satisfaction
As critical as background screening is to organizations, it becomes even more powerful when it is integrated with an ATS or other hiring management technology. Of the organizations using any kind of recruiting technology, 83 percent of best-in-class organizations indicate that they use an ATS, and 59 percent of that top-performing group integrate their background screening solution with their ATS at least partially. This type of integration is resulting in some impressive results in terms of the quality of talent brought on board and in improving the process itself by reducing the time and the cost to hire.
Obviously, the act of conducting a background screen is not the only element that will ensure that higher quality candidates are hired. But with its widespread use among best-in-class organizations, it is safe to say that it is one of the hallmarks of a mature and successful hiring practice. If an organization is doing all the right things to be a top performer when it comes to getting better candidates through the door in an efficient and effective way, that process is going to include background screening, and even more likely to have that screening process integrated with their hiring management technology solution.
This integration also improves the organization’s overall satisfaction with their employment screening solution. Of organizations with full integration between their ATS and their screening solution, 73 percent indicate that they are satisfied or extremely satisfied with their screening solution. Given the importance and prevalence of background checking, if you have an existing ATS or other hiring management system or technology that automates the hiring workflow, integrating this critical step can bring even greater benefit.
Vendor Selection Criteria
When it comes to selecting a partner for providing background screening, the speed with which the process is completed and the accuracy of the results are far and away the top criteria. Price and value are also always a concern with a solution that organizations view as a “must have,” but in the overall recruiting process, time and accuracy are the most essential issues.
Organizations understand the value provided by their employment screening solution, and are not just focused on the cost. Ensuring that the solution meets the needs of the business, and protects the organization from the risk and cost of a hire that should not be made outweighs a simple cost comparison when it comes to selecting their solution partner.
Also, given the shortages of key skills noted earlier in this report, anything an organization can do to make it easier to do business with— from a candidate perspective—is important. Candidate relationship management practices, such as maintaining engaging job portals, using candidate relationship management tools to track communications, and having recruiters actively maintain contact with previous applicants, are all showing up as key strategies for best-in-class companies in talent acquisition, and this attention to the experience needs to continue after an offer has been extended. In sum, making the background check as smooth and painless for the candidate as possible, and ensuring that an incomplete background check doesn’t stand in the way of an eager new employee who is ready to start work, is an important factor.
Key Insights
Organizations have a lot to consider when it comes to making the right hiring decision. The competition for key skills is fierce, and competition in the business marketplace is fierce as well, making it essential that companies have the right staff in the right place at the right time to serve their customers. There are many strategic questions as well as tactical issues involved in finding, hiring, and bringing on board the talent that’s best for an organization, but the background screening process is an important stage-gate for an increasing number of organizations today. This is the case for multiple reasons. Companies must be able to mitigate their risk and legal exposure on a compliance front, but they also need to execute in a way that is efficient and that improves the outcome of the process.
The use of background screening has been shown to not only be a key characteristic of best-in-class talent acquisition, but also to help improve the process even more dramatically when it’s integrated closely with recruitment technology solutions.
Organizations not yet using a background screening solution, or those using one as a stand-alone solution, should consider these integration issues when evaluating their strategy. Those using just one aspect of screening should look to integrate more aspects, including criminal background checks, previous employment / education verification, and reference checking, to make the most of their investment and further improve what the best-in-class deem their most important measure of talent acquisition effectiveness: quality of hire.
Mollie Lombardi is senior research analyst, human capital management at Aberdeen Group. She can be reached at mollie.lombardi@aberdeen.com.
