How the Downturn Catalyzes Screening’s Evolution

 A decrease in hiring volume has screening providers thinking about the future. Improvements and innovation are in the forecast.
 
By Debbie Bolla
 
Ask Dr. Grant Goold, program director and department chair of EMS education at American River College, his thoughts on the recession of 2009 and he’d most likely answer, what recession? That’s mainly due to the fact that enrollment at the Sacramento-based community college is running more than 15 percent beyond capacity. With the unemployment rate rising to 10 percent over the course of the year, many out-of-work individuals took the opportunity to further their education in fields such as Goold’s—healthcare. The Department of Labor anticipates a more than 30 percent increase in the number of healthcare jobs during the next five years.
 
With classrooms completely packed, Goold’s staff doesn’t have time to handle superfluous administrative tasks like background screening tests. Students in Goold’s program often participate in clinical internships with partner hospitals, and criminal background checks and drug tests are a requirement. With at least 500 screens each year and no bandwidth to administer the back-office tasks, Goold sought an outsourcing provider whose core competency was specifically screening services.
 
“Background checks and drug screening is not required of the education process, and we don’t want it to take away time from the classroom,” said Goold. “My staff doesn’t want to be involved in administrative work. I would lose faculty if I couldn’t partner with a company that focuses on our demand.”
 
That’s where Corporate Screening Services (CSS) stepped in. A second-generation relationship, CSS’s arrangement with the  college involves providing a turnkey program that bundles background screens with drug tests to keep costs down for the oft money-deprived college students (the fee is their responsibility). Goold has been “blown away” by the services and noted that any hiccup has been addressed and amended quickly. For example, in the past, the list of in-network drug screening facilities wasn’t always current, causing some students to accidentally use an out-of-network provider, which incurred large, unnecessary fees. CSS then partnered with an outside facilitator that handles all the scheduling to ensure appointments are made in the covered network. Problem solved.
 
Background screening service is an important tool that a large majority of organizations use to mitigate risk, protect reputation, comply with regulatory requirements, meet competitor’s policies, and maintain industry benchmarks. According to the HireRight 2009 Employment Screening Benchmark report, 88 percent of companies have a screening program in place. Yet how often organizations have needed to use them of late is the question on everyone’s mind. Greg Dubecky, general manager of Corporate Screening Services, says education and healthcare industries are experiencing an uptick in the need for screening. Budgets for industries including manufacturing have declined significantly, whereas others are holding steady, contingent on hiring volume.
 
While Paige Vesuvio, vice president of marketing, employer services for First Advantage, has seen hiring volumes decrease during the last year, the number of competitive candidates has increased tenfold. “Two years ago, our clients weren’t getting the quality of job applicants that they wanted. Now the hiring challenge is a very large candidate pool for every job,” she noted. “Because of the volume of candidates and the significant cost of a poor hiring decision, people are increasing their due diligence on the candidate pool. We are screening for fewer net jobs, but for some clients and some industries, their screening programs have ramped up. They may have added things like assessments for attitudes and aptitudes.”
 
According to the HireRight report, the most popular type of screen is a criminal background check, with 93 percent of organizations enlisting this type of report. (See Figure 1 on page 28). The study showed that the other most common screens include identity at 72 percent, employment history also at 72 percent, and education at 63 percent.
 
Todd Owens, general manager of Intelius Screening Solutions, said the current economic climate and highly competitive job market are creating concerns among employers about the validity of applications. “Applicants are more likely to go to extreme measures to get the job,” he explained. “We are seeing an increase in resume fraud that results from an individual falsifying their resume. A big part of background screening is verifying education, experience, and professional licenses, and it’s important now more than ever.”
 
Screening Spreads Its Wings
A sector of the workforce for which companies are rethinking their screening applications is contingent or contracted workers. “That’s been a key trend over the last couple of years,” noted Rob Pickell, vice president of customer solutions for HireRight. “Every time we come out of a recession, we see job growth in the temporary workforce. We are making sure our customers know that this is where they will most likely be adding workers first, and they should be thinking about their policies around extended workforce screening now. Clearly, you need to apply the same basic policy that you apply to your permanent workforce.”
 
And a bevy of companies agree. The HireRight report revealed that 31 percent of respondents conduct extended workforce screening, a major spike compared to previous years. Technology company LiveOps has found success through an outsourced screening platform for its 20,000 independent agents. The company operates one of the largest virtual call centers, which employs contracted workers. Since the call center provides services to material-sensitive clients, including financial services and insurance agencies, agents are required to complete and pass a comprehensive background verification before being offered employment.
 
LiveOps independent work generates a large amount of applicants from across the U.S. so it’s screening program needed to do three things: be able to handle high transaction volumes across a wide geographic footprint; be flexible in payment and invoicing; and issue compliance support. First Advantage’s solution was an automated, Web-based platform.
 
“We wanted a third party that could take us out of the process of determining the background eligibility of agents,” noted Tim Whipple, vice president of community operations for LiveOps. “We needed decentralization of the background process and of the payment system. Individuals applying to contract services with LiveOps pay for their own background check. First Advantage had to create a billing system that was capable of processing thousands of individual transactions.”
 
Through its robust platform, the First Advantage system provides nearly 13,000 background verifications every quarter, with an average turnaround time of one and one-half days. LiveOps has benefited two-fold: the program narrows down the candidate pool by weeding out applicants who don’t believe they can pass the basic screen, and it produces greater economies of scale.
 
Another application making headway is the screening of current employees. Up substantially from previous years, some 16 percent of respondents in the HireRight 2009 report said they were now screening current staff members. Of those respondents, about 30 percent administer drug and health-related screens, about 18 percent use background screening, and about 10 percent enlist employment eligibility verifications.
 
“Technology will really enable this,” said Pickell. “There are ways today to more cost-effectively check databases.” Industries that have a higher degree of risk or access to personal and monetary information are more apt to have policies intact, he noted.
 
Improving Processes
During this economic lull, screening companies have taken the opportunity to innovate and forge strategic partnerships to produce better results. Intelius’ Owens noted that they are taking this time to focus on driving better customer experiences through technology, as well as leveraging of partnerships. Talent management and screening are two segments that can work together to produce more attractive economies of scale.
 
“If companies centralize talent acquisition, they have the ability to reduce costs and reduce time spent managing the program,” noted Dubecky.
 
This past June, employment services provider Manpower sought a relationship with GIS to manage its background screening for temporary and full-time candidates for its RPO clients. On average, GIS performs background checks and/or drug screens for approximately 6,000 candidates per month for Manpower.
 
“Screening takes on a critical role with talent acquisition,” said Jim McCoy, vice president of Manpower Business Solutions. “We screen for skill and will, to see how likely a candidate will be successful, if they will stay in the job for a long period, and if they are a good cultural fit. Screening is very valuable.”
 
McCoy noted that their clients have the option to take advantage of the screening services provided by GIS or use someone else at their own discretion. Since June, he said the majority of clients are choosing to leverage the strategic relationship since the services are offered at a lower price. “We can hire for you, and hire better,” he said. “With GIS, we can take the risk out of the hiring decision and provide a branded experience.”
 
Eyes on the Future
With recovery from the recession coming to the forefront, just where is the background screening industry heading? Our industry experts point to three game changers: social media, technology, and globalization.
 
Social Media. With rapid growth of social networking sites like LinkedIn, Facebook, and Twitter, screening providers will most likely have to address how to best use this public information in the future. Right now, it’s a gray area—no precedent has been set for the appropriate use of social media for formal background screening.
 
“It is a minefield of legal issues that need to be navigated,” explained Owens. “For example, equal opportunity laws prevent using information against an individual unles­s it’s related to a job they are going to be performing. It’s a risky proposition to check into someone’s social networking profile, find information that has no relevance, and use it against them. It’s an interesting intersection where background screening companies could have a pivotal role in helping companies screen for social behavior.”
 
It’s a hot topic without any legal guidance so most providers are currently taking a conservative approach. “It’s going to make its way to the Equal Employment Oppor-tunity Commission,” said Dubecky. “It’s only a matter time that the EEOC comes out with a position.”
 
Technology. The use of technology has been the catalyst behind the movement from decentralized to centralized screening programs. Centralized programs—having all screening processes provided and monitored by a single vendor—allow companies to build efficiencies and take advantage of a greater economy of scale from a comprehensive solution. Access and storage of information has also vastly improved and will continue to do so, due to today’s technological innovations. Web 2.0 functionality and Software-as-a-Service platforms provide the ability to have a streamlined online hub of data. To digitize credentials and store all information electronically for a large organization creates a more functional and efficient system.
 
“With the digitization of records, the biggest movement we are seeing is the digitized fingerprint,” said Alastair Watson, director of marketing, employer services for First Advantage. “Organizations are digitizing fingerprints because they can filter them through multiple channeling agents and reuse the prints. You can also capture electronic signatures, which makes the consent process faster and relatively paperless. It’s the way it should be—transferable.”
 
Globalization. A long-term trend that continues to gather momentum is globalization. Of the organizations that perform global screens, 84 percent screen in North America, 69 percent screen in Europe, and 60 percent screen in Asia, according to the HireRight report.
 
“It’s on the increase partly because businesses want to ensure consistent policies,” said Vesuvio. She also noted that since so many companies operate on a global level, they often have employees that transfer between locations. “If there is a consistent screening program, there is less doubt. It makes it more comfortable for them to transfer those employees from location to location versus those locations having disparate programs. Technology improvements and single dashboards become very important.”
 
Agreed Pickell, “Global workforce screening is one of the largest areas of growth. Companies are trying to establish a global standard, and applying it to the best extent possible across all of their operations. That is easier said than done due to the nature of what type of data is available from country to country varies in a significant way.”
 
Because legislation and policy differ greatly, it will take time for screening services to align on a global level. In the interim, companies can institute best practices by setting a global screening policy; screening the global history of every candidate and worker; using electronic forms when possible; and screening everyone as similarly as possible worldwide. 
 

Posted November 12, 2009 in Talent Acquisition

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