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In Screening Marketplace, Employers Look for Turnkey

Integrated solutions incorporating technology and multiple lines of service come together to help speed up the hiring process and offer access to data.

by Andy Teng

Want to find cutting-edge practitioners of outsourced screening services? Catch a flight out to Chicago’s O’Hare Airport and then hop on a 15-minute cab ride to the western suburb of Addison, IL, home to Chamberlain College of Nursing. There you’ll find Vickie Mudra, the college’s national director of strategic alliances, feeling much more assured of her organization’s student screening efforts since they were outsourced under an integrated program.

You see, it wasn’t long ago when Chamberlain, an accredited institution that has been training nurses for 120 years, screened its students through a less-than-formal process with no particular employee in charge. Mudra recalled it was a labor-intensive chore that was sometimes handled by registrar workers and sometimes by accounting employees in inconsistent processes. Worst of all, no one had been trained in the compliance requirements of background screening.

After being acquired by DeVry, Inc. in 2005 and changing its name to Chamberlain (previously it was known as Deaconess College of Nursing), it launched a second campus in Columbus, OH in 2007. As it doubled the number of campuses—eventually quadrupling later on—Chamberlain also realized that its informal approach to screening no longer was acceptable.

“I knew we needed to go to a more automated process,” Mudra said, recalling that the college eventually brought in a number of outsourced background screening solutions that offered self-service, web-based access, and compliance measures. However, when Chamberlain also began to screen for drug use, a turnkey solution became necessary.

“We wanted a more integrated solution, and we wanted it online. We also were moving into a matrixed organization where we had a centralized corporate structure. I made the decision that I wanted to centralize,” she said.

What Chamberlain ended up with was an end-to-end screening solution that included a branded web site that allowed students to schedule and pay for their own background and drug screening, an internal compliance team supported by its provider, Intelius, and domain expertise and insight into the latest screening trends. Most importantly, she said, the school now has an efficient, compliant process in place with one vendor held accountable.

An Integrated Solution

Regardless if your needs are to check employees’ background for criminal records, students’ use of illegal drugs, the academic credentials of job candidates, or other information to reduce risk to your organization, today’s outsourced solutions can cover the entire gamut of screening requirements. According to market observers, while background and drug screening outsourcing is hardly a new concept, practitioners are seeing greater benefits from the industry’s maturation, adoption of new technology, and refinement of processes. Through integration—of services, technology, and reporting—companies are able to more quickly access information offered up in more useful ways.

“What you find is that there are many employment screening companies trying to integrate not only all the solutions on the back end but also provide a single comprehensive report on the front end,” said Todd Owens, general manager of screening services at Intelius. He pointed out that screening service providers are working closely with both HR customers and technology vendors such as applicant tracking system (ATS) developers to seamlessly deliver screening results.

For instance, by developing dashboards that enable users to quickly glance at the employment eligibility (I-9, criminal convictions, drug use, etc.) of any particular candidate, screening vendors help their clients achieve a number of critical goals: reduce time to hire, help employers comply with all applicable state and federal regulations, integrate incoming employee data into the existing HRMS or talent management suite, and eliminate a lot of the manual steps associated with screening workers.

Data and service integration has been a cornerstone of the value proposition offered up by HRO in recent years, and in screening services, more buyers are flocking to the notion of a single-sourced solution. Indeed, market trends such as the recent mergers of some of the market’s largest players further confirm this. LexisNexis parent company Reed Elsevier earlier this year completed the $4.1 billion acquisition of ChoicePoint, and USIS acquired HireRight for $249 million. Some industry observers point to these mergers as an indication that full-service vendors with myriad offerings may become a growing preference of service buyers.

That was the case for Leslie Bender, the chief compliance officer and general counsel for Receivables Outsourcing, Inc., a provider of outsourced accounting services for nearly 200 hospitals in the U.S. Because the company must comply with the Fair Credit Reporting Act (FCRA) as well as the Health Insurance Portability and Accountability Act (HIPPA), Bender is especially concerned that an outsourced solution is compliant. She added these and other concerns such as reliability of reports and responsiveness of technology all weighed in her decision to use LexisNexis for employee screening. Additionally, the vendor was already providing legal research and other non-screening services to her company. Most importantly, she said, her provider offers updated information on regulatory changes and regularly meets with her staff to offer insight on service performance and technology improvements.

“They are helpful and have their finger on the pulse of what’s going on. They do a tremendous job keeping abreast and keeping you alerted. I think they work very hard to package it (data) in a way that’s meaningful, so they don’t need to bother you with things here and there,” Bender said, adding that her company still performs screenings internally in Maryland and Arizona because of ease of record access.

She added that the turnkey solution offered by the provider boasts automated web processing available around the clock, which means if an applicant needs to be screened late in the day on a Friday afternoon, Receivables Outsourcing can still make that happen.

Like many employers, Bender said accuracy of searches remains the most critical criteria in the selection of a vendor. She pointed out that her organization, which has 350 employees in five states, had previously used another vendor but after conducting spot-checking had discovered that it was failing to catch all hits. This was especially disturbing because as an outsourced accounting firm, her company had to certify that its employees met its clients’ vetting requirements. “A lot of our clients are sensitive to data security. It requires us to make sure we’re not bringing people on that may put the hospitals at risk,” she added.

The Technological Advantage
Even as accuracy of screens continues to be the leading requirement of buyers, service providers say the industry is producing better results for a number of reasons. For one, the proliferation of online data has made it easier to search for background information, especially as a number of states have removed barriers to access. Additionally, developments in screening technology—whether integration with ATS or web-based self-service—mean searches can be conducted more quickly and with fewer human errors. Moreover, these tools enable employers to better address privacy and security concerns because data don’t have to pass through as many hands as before.

“People are having to do more with less so they are looking for technology to facilitate easier hiring. People are looking for the ‘Easy Button.’ You push a button, the ATS moves the information to us, and we automate the screening,” said Bill Whitford, senior vice president of ChoicePoint, now part of LexisNexis’ Risk Information Group.

Whitford said the move toward service integration has many benefits to users. For instance, not only can hiring managers automate the process, but the use of tech tools also eliminates errors. He estimated that at the beginning of this year, about 20 percent of the company’s searches were received by faxes and other manual methods; by year’s end, he anticipated that to fall to 12 percent, indicating the move to digital ordering is accelerating.  By eliminating faxes, the process also reduces the potential for misreading a name or a social security number on the form.

He pointed out that there will always be a market segment that prefers to send in orders via fax because they either don’t have access to a desktop or they prefer to fax in a form. In addition, many clients still don’t use an ATS, so the recruitment and hiring process requires manual intervention.

But even for buyers with an ATS installation, the issue of integration remains. As some providers pointed out, few applicant tracking solutions have robust candidate screening functionality that can easily tie into a particular service provider’s systems. That means providers must either develop a bolt-on integration kit for a particular ATS or the employer must still resort to some manual ways of inputting data. A number of providers say they are collaborating with ATS providers to give their clients a seamless solution, but these partnerships can also exclude some screening providers.

Beside enhancement in front-end technology, some screening service providers are improving accuracy and usability through back-end improvements as well. According to Whitford, ChoicePoint sources 60 percent of inquiries directly from database houses, the repository of huge amounts of information in the country. He noted that the company has developed data-retrieval robots to quickly and accurately search out a candidate’s background.

However, despite the proliferation of online data, there are still infrastructure challenges facing the industry. Greg Dubecky, general manager of Corporate Screening, said the industry has benefited tremendously because of the availability of information. Previously, providers had to send out researchers to county courthouses to look for criminal information; today, that data can be accessed online. However, standardizing the process from courthouse to courthouse is still not possible because there are many systems and platforms used throughout the states. Furthermore, how information is organized vary from jurisdiction to jurisdiction.

“There are just so many database sources and so many platforms that (county governments) are on that it will take years before there is any semblance of standardization. We’re a long ways away before we have a comprehensive point-and -click solution for criminal record searches,” he noted.

In addition, users of the data must be mindful of compliance issues such as the age of the information or is it FCRA-compliant.

For employers, the issue of compliance has become a greater impetus for them to consider outsourcing employment screening. With the spotlight on immigration status of employees shinning hotter than ever—underscored by some recent high-profile raids on employers—companies are getting the message that they must toe the line with local, state, and federal mandates. For employers lacking a thorough understanding of the screening process, they can turn to outsourced service providers to fill in the gap. In fact, a number of observers point out, vendors are increasingly serving in a consultative role and not just a processor of screening requests.

Scott Viebranz, chief sales officer for background screening at Kroll, said clients will turn to his company to learn about recent changes in legislation affecting their businesses. “People want to make sure they don’t get blindsided by legislative issues. Updates on legislation issues are a value-add we can bring,” he said, adding that risk-cost analysis is another area to which Kroll consults client.

Adding to concerns around risk and compliance is the growing presence of the third-party workers. On-site contractors—food and maintenance workers, for example—can pose as much a risk as permanent employees if they are not properly vetted for criminal records and drug use. In past practices, contracted firms may have screened their workers, but clients rarely audited the process. Viebranz said employers are now more rigorous and vigilant about how contractors are screened.

No Global Solutions
If one workplace trend has proven to be steady in recent years, it’s the march toward globalization. Even as organizations look to implement standards across their operations around the world, background screening remains a highly fractured process that is likely to remain customized to each region. That’s because outside the U.S., access to personal information can be tenuous and highly manual. Within industrialized nations, access may be less daunting, but prospective employees with a work history in less developed nations pose a unique challenge to the employer and its screening providers.

Intelius’ Owens explained that employers are becoming more aware of the need to screen employees in a consistent process. Although some employers turn to a best-of-breed screening provider for each country in which they have a presence, others are starting to explore the possibility of using their domestic provider for their overseas workers. To meet their client’s needs, the vendor must either partner with a local vendor or have in-country presence to conduct the screening on its own. Owens, who said Intelius prefers to work with local, best-of-breed partners for their knowledge of the territory, conceded that this approach is not without its share of challenges.

“It’s a challenge in terms of selecting best-of-breed international partners and connecting them in terms of the technology,” he said. “We partner because of the flexibility and accountability from always using best of breed. We are constantly reviewing and auditing our partners.”

But even the most thorough auditing process can’t ensure that a screening partner will execute to the same level of thoroughness as the primary provider, and in these instances, buyers looking for a global screening service must take a leap of faith in these partnerships.

An alternative is to source services from a global firm such as Kroll, which has more than 60 offices in 19 countries. According to Viebranz, more of the company’s domestic clients are now requesting information about services for their operations abroad or to standardize their processes; some either don’t conduct screening now or do so haphazardly.

“They say, ‘You know what our program is in the U.S. Can you give us advice on what we can do outside the U.S?’” he said, pointing out that clients sometimes mistakenly assume they can replicate the same process here in operations abroad. But with so many different laws on privacy and inconsistent access to employee records, that’s often not the case, Viebranz noted.

Nevertheless, he said there is a drive toward greater oversight and reporting on a global basis. “You can achieve standardization in philosophy even if you can’t achieve it in practicality,” he said.

Economic Impact
Even as the workplace screening industry looks for ways to provide broader, more valuable services to clients, how will the economic slowdown affect its ability to further evolve the business? Already, there are predictions that the slowdown in hiring will begin to make its impact felt by the end of the fourth quarter or the beginning of the first quarter in 2009. Some providers are likely to see a major decline in business while others, depending on the industries they serve, may experience minimal decreases in the number of candidates processed. Whatever the case, employment screeners will have to offer a broader range of services to survive the current economic climate. Fortunately for many of the larger vendors in the marketplace, they’ve been busy developing integrated offerings that are helping their clients to more quickly and efficiently screen and hire candidates. HRO


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