Ocean liners need watertight background checks. Outsourcing can be a life preserver.
By Russ Banham
Planning a trip on board Royal Caribbean Cruises this winter? If so, you can rest assured during your travels that the onboard personnel will be as ship-shape as the ocean liner itself. That’s because the Royal Caribbean employes have been thoroughly vetted for past criminal activity and drug use via a successful, durable, and multi-faceted recruitment process outsourcing engagement.
Royal Caribbean Cruises first outsourced job candidate background screening to services provider ChoicePoint in 2002, and it continued and strengthened this relationship after LexisNexis Group acquired ChoicePoint in a $4.1 billion cash deal in 2008. The acquisition created a “global information-gathering powerhouse,” according to an article in The Washington Post at the time. It also fed a series of upgrades in the services provided to Royal Caribbean Cruises. That now leverages a paperless, automated, and integrated recruitment and hiring strategy that involves several services providers aligned with LexisNexis, including Taleo, LabCorp, Quest, PeopleSoft, and others.
All companies seek to employ talented individuals with spotless criminal records and clean drug tests, given the steep liability that can attach to negligent hiring or retention of someone at demonstrable risk of causing harm to others. According to the law firm Littler Mendelson, the average jury award in negligent hiring/retention cases is a whopping $810,000. Royal Caribbean Cruises, the world’s second largest cruise vacation company, with a combined total of 38 ships in service (and five in various stages of construction), considers passenger safety its highest priority, hence the premium put on background screening.
The Miami-based company was created in 1989, and it grew quickly in the wake of several mergers and acquisitions, the largest with Celebrity Cruises in 1997. In 2002, the company addressed its greater corporate complexity by seeking a more robust, efficient, and less-expensive background screening system. “It is difficult for many organizations to gather the data required to show due diligence in background screening,” explained Scott A. Hudson, vice president of screen solutions at LexisNexis Risk Solutions Group. “The technology required to search for and find a criminal past can become laborious and not cost effective. For this reason alone, many companies select to outsource the process.”
Steady As She Goes
Once it got its feet wet outsourcing background screening, Royal Caribbean took the plunge and began shedding other recruitment functions to services providers, culminating in the use of an applicant tracking system provided by Taleo to coordinate the entire hiring process. Whereas it used to rely on talent search firms to recruit job candidates, it now retains this as a strategic function internally, and it relies on its multiple outsourcing relationships to handle the functional elements of hiring, such as background screening. Maria Diaz, the corporate talent acquisition manager at Royal Caribbean Cruises Ltd., estimates that Royal Caribbean is saving $1.3 million in fees to search firms, and has also been able to redirect the efforts of a single fulltime employee away from manual processing toward more strategic recruitment goals.
Royal Caribbean’s HR department employs six recruiters—two for its corporate hiring needs and four for shipboard positions. The recruiters are responsible for all of the company’s pre-employment screening of job candidates for its offices in North America and on its ships and tours. The hiring system at the company prior to its initial contract with ChoicePoint was decentralized, with multiple background screening vendors supporting different operating units within Royal Caribbean. Recruiters, search firms, and the various organizations providing drug testing and criminal background services faxed orders from one location to another. Documents were being lost, and cycle time was slow and inconsistent, adding up to affect the company’s time-to-hire and costs-per-job-candidate metrics.
A local laboratory managed the drug-testing program, which added time to the process when job candidates were outside the Miami area. The process was paper-intensive, inefficient, slow, unresponsive, and expensive. Outsourcing was deemed the solution to these problems. “We selected ChoicePoint because of their capability to centralize all criminal checking, drug testing, and verification of previous employment,” Diaz said. “They had a large network to handle these functions, which would be automated. The turnaround time was another plus.”
Hudson cites several LexisNexis client case studies that indicated hiring turnaround times sped up by as much as 33 percent. A good part of this turnaround is the speed with which a company receives candidate drug test results. One client reported a drug screening process completed in three to five days, compared with as many as 22 days previously.
At Royal Caribbean, the process has been systematized so that it now takes less than 72 hours to receive drug-screening results, as opposed to a week or more in the past.
Previously at Royal Caribbean, a candidate for hire was mailed a five-part Custody and Control form, and informed which collection site he or she needed to make an appointment at in order to provide a urinary specimen. The recruiter expended both time and money mailing the form and determining which collection site was closest to the job candidate’s residence. The applicant then made an appointment at the collection site, handed over the form to be filled out in ink, and provided the specimen. Following that, the collection site then over-nighted the specimen and one part of the five-part form to a testing laboratory for analysis. Another part of the form was mailed or faxed to the donor, and yet another was mailed or faxed to Royal Caribbean. The lab results were then downloaded electronically into ChoicePoint’s fulfillment system. The vendor would interpret the results and send a report to Royal Caribbean as to whether the candidate passed or failed.
Since LexisNexis took over the Royal Caribbean account following its acquisition of ChoicePoint, and Taleo was recruited to provide applicant-tracking services, the process has become far less cumbersome. Today, Royal Caribbean electronically initiates a request for a drug test through Taleo on a Web page. The order is electronically pushed to LexisNexis, which then pushes it again to LabCorp along with the five-part carbon copy form, populated electronically, thus eliminating the need for it to be mailed to the job candidate and then physically transported to the collection site.
LexisNexis also electronically searches behind the scenes for the LabCorp site closest to the applicant’s residence, relieving this manual burden, as well. The job candidate is then e-mailed a series of specimen deposit locations (LabCorp lists more than 1,000 countrywide) to choose from. The e-mail contains instructions and a registration number. The applicant prints the e-mail, makes an appointment at the lab site, checks in, hands over the printed email, and then provides a specimen. Using the registration number, the collector pulls up the order on a computer and then inputs the results once they’re analyzed. LexisNexis, meanwhile, can follow the entire process electronically.
“We get real-time information on where the specimen is in the process, which we can then pass on to the client employer,” noted Melissa DiThomas, product manager at LexisNexis Risk Solutions.
Walk the Plank
In 2008 alone, LexisNexis processed more than three million drug screens for more than 27,000 clients across diverse industries. (LexisNexis also leverages drug-testing services that are provided by another laboratory, Quest.)
While the simplified drug testing service is bringing down cost for Royal Caribbean, the company also touts the benefits provided by LexisNexis’ criminal background checks. The services provider processed more than 12 million background checks in 2008, leveraging its relationships with myriad law enforcement agencies and courthouses across the United States and overseas. It is the largest collector of criminal records from courthouses, extracting more than 6,000 records daily. Not bad for a firm that essentially began as a legal research service (albeit one that revolutionized the legal profession.) LexisNexis did not enter the risk solutions business until 2000.
Given the firm’s background as a provider of legal data, it is not surprising that its technology offers fast and thorough access to thousands of online legal and court records. For counties whose records are not yet online, LexisNexis has cultivated many relationships with small companies that are hired to perform a physical check of the documents. Speed is of the essence, and LexisNexis promises it. “We’re getting our criminal background results back within 24 to 48 hours,” said Diaz.
Hudson said the Royal Caribbean-LexisNexis connection is a poster child for where the recruitment process outsourcing business is headed. “Electronically integrating an applicant tracking system with background screening, centralizing everything to make it less complicated and costly, while ensuring compliance with laws and regulations worldwide, is leading edge,” he said.
Diaz concurred: “It’s been a very successful partnership.”
Ocean liners need watertight background checks. Outsourcing can be a life preserver.