EMployers have always needed fast and accurate services, but today’s game changer is the use of innovative technology to quickly retrieve and view records.
As HR leaders look to transform their organizations, the outsourcing of non-core functions is a key pillar of that effort. But deciding on exactly which services to outsource and which ones to retain has been an age-old dilemma for everyone who has ever considered
Outsourcing payroll and benefits administration might seem like an obvious start, but perhaps no HR service is more appropriate for outsourcing than employment background screening, which by many accounts has become increasingly difficult to manage internally because of fast-evolving regulations.
Whether the difficult task they face is compliance with the Fair Credit Reporting Act, verifying occupation-specific certification, or obtaining a state-wide or country-wide criminal check, employers have myriad options when it comes to outsourcing these tasks. That’s especially comforting in an age of increased security awareness and fear of legal liability. Moreover, with HR services growing more integrated—marrying the recruitment process with screening and new employee onboarding, for instance—outsourcing is furthering its value to HR professionals who are stretched for time and domain expertise. Not only has the market broadened its offerings and improved services, but technological advances have made it easier for employers to order screening work, review results, and manage reports. All these steps can now be performed quickly with a few clicks of a mouse.
“As you see more and more companies shedding functions that are not core, this is one of the functions that’s clearly not core,” said Scott Singer, a corporate recruiter with spirits marketer Bacardi USA in Miami. “I don’t have time to chase down courthouse records. I’d have to go to credit agencies and call past employers about their place of work. I just wouldn’t do it in-house.”
As an alcoholic beverage company, Bacardi USA has to be especially careful about the employees it hires. With 466 workers in 50 states, the maker of Bacardi Rum and other products uses provider EBI to order thorough searches for its candidates. At a cost of $120 to $150 per background check, Singer said he promptly receives a comprehensive report that allows the company to either quickly hire or reject an applicant. He added that the price is comparatively negligible considering that a typical warehouse worker might make $23 an hour including benefits, so each background check accounts for only a few hours of work—a small price that he said more than pays for itself if it can ensure Bacardi makes good hires.
Singer’s philosophy mirrors many employers these days, especially as the employment screening industry has markedly improved offerings and services. What used to be an arduous chore of faxing orders, waiting days for results, and then sometimes finding out that the information was for the wrong person or that the data were inconclusive, today’s services are being delivered by dozens of providers who can process online requests almost instantaneously, check against a larger database of records, and make reporting available to anyone with an Internet connection.
Albert Bueno, president of screening service provider GIS in Chapin, SC, characterized today’s employment screening services today as a blend of “old-school value with new technology.” That means employers still want “old-school” customer service, accuracy, and savings, but these days technology has evolved into a cornerstone of service delivery. He said providers must be able to give customers the information they look for in a variety of ways, especially as they migrate into new technology.
“If you’re not in a paperless environment, you’re in the wrong business,” he said, pointing out that paper-based processes have been highly prone to errors. For instance, when customers used to fax orders to their screening service providers, errors could occur at any point of the process, including filling out the order form, transmitting the fax, reading and entering the order by the provider, and conducting the search at government offices. He lamented that it was a slow process that could easily lead to searching the wrong candidate.
Today, the process has become much more automated and comprehensive. With many local, county, and state governments increasingly making their records available online, and with employers receiving candidate information electronically through recruiters or applicants themselves, performing searches may be just a matter of logging onto a provider’s web site and uploading candidate information electronically. On many cursory checks, results are available almost immediately. That’s one benefit that some employers say is invaluable when outsourcing.
“I like to know that if I’m submitting a number of candidates, when the information comes back it will be fast and reliable,” said Doug Cole, director of loss prevention at the Bartell Drug Company in Seattle.
Cole, whose company operates a chain of drug stores in Washington, said his company performs some screening functions internally but also relies on locally based Intelius for additional services, especially when a short search time is necessary. The company conducts both pre- and post-employment screening as part of its loss prevention program, and while it only has stores within the state, Cole said he relies on his vendor to search databases outside of Washington on applicants who have recently relocated to the area. He said in those cases, one key requirement dominates the others. “Basically it’s not so much a question of cost as it is of speed of pre-employment screening,” he added.
Technology Is Key Factor
How do companies such as Intelius, GIS, and others reduce search times? According to Todd Owens, Intelius’ general manager of screening services, technology has been the key enabler as service providers and employers turn to the latest software and web innovations to improve their metrics.
“Technology is the single largest differentiator. It allows us to rapidly deliver customized solutions,” Owens contended. “What we’re seeing now is a technology shift.”
Aside from better integration with recruitment software and HRIS—which raises overall efficiencies—screening solutions also enable better reporting capabilities, which in turn help employers comply with myriad regulatory requirements. Owens said providers spend significant amounts on their technology, an investment that few HR organizations can afford to make.
For employers such as Barnhill Contracting Company in Tarboro, NC, the proliferation of easy-to-use technology has been a useful development in its hiring process. Glenda Hughes, an administrative assistant who works in compliance for the company, said the convenience of web-based submissions means she spends little time to make sure candidates quickly clear the company’s security checks.
“I do everything on the Internet. Being web-based, I can save reports right on my desktop and I can send it out [by e-mail],” she pointed out.
Hughes said she uses two providers—USIS for a cursory, immediate background check and LexisNexis for a more comprehensive search. She said this approach provides a series of checks to ensure applicants are thoroughly vetted before they are hired.
Barnhill Contracting’s two-tier approach also helps the company to address what has become an increasingly critical part of the screening process—complying with all state and federal employment laws. And with more regulations being rolled out in light of the immigration debate—states such as Georgia and Arizona are legislatively tackling the hiring of illegal workers—HR will be under greater pressure to meet those requirements.
Still, they won’t be addressing them alone. Outsourced screening service providers are evolving into more consultative roles, helping their clients to overcome new challenges. Supported by technology, domain knowledge, and growing market demand, these providers are well-suited to deliver what HR needs.
Open Standards for HR Technology
|Today’s technology provides standard integration points that enable the HR manager to select best-of-breed solutions from a variety of service providers. These integration points exist throughout the process and can ultimately feed the data directly into your HRIS.
You could obtain all these services from a single provider, but the reality is that each provider has its strengths and weaknesses. Despite increasing opportunities for data and application integration, a few providers still attempt to hold you hostage to their proprietary systems and format. Some organizations still find themselves held hostage by an ATS that seeks to dictate the platform, the database, and the data structure across the applicant continuum, or an HRIS that attempts to exercise control straight through employee on-boarding and into benefits and payroll.
Proprietary systems and formats should have been tossed out the window long ago as progressive technology providers are able to conform to XML as a common data stream. When a provider says he can’t conform to this minimally acceptable option, you should run towards a friendlier service or system.
Increasingly providers of HR systems and services are voluntarily joining the HR-XML consortium to form a common sandbox while creating a more hospitable environment for vendors and customers to manage and conduct business. The HR-XML Consortium was formed to spare employers and vendors the risk and expense of having to negotiate and agree on data interchange mechanisms on an ad-hoc basis. By developing and publishing open data exchange standards based on Extensible Markup Language (XML), the consortium has set a platform standard to ensure that all software entities have the same data stream flow.
HR-XML-certified products specify the location of applicant information to simplify the stream. There will always be some minimal level of uniqueness, but the program gives technology providers the same standard platform so you don’t start from scratch each time you try to connect systems or customize data. If you are outsourcing to a partner or provider who doesn’t share this forward-thinking mindset, it.