In corporate America, pre-employment background checks on new employees have become a standard risk management tool. It is no longer a question of whether a company should screen applicants, but how to do it. A 2004 study published by the Society for Human Resource Management (SHRM), titled “Workplace Violence Survey,” revealed a significant increase in the number of companies conducting pre-employment assessments.
The first decision an employer faces is whether to do the selection in-house or outsource it. There are some tasks that an employer could certainly perform in-house, such as local criminal background checks; however, a growing trend among profitable and efficient organizations is the outsourcing of services that, while vital, do not represent the company’s core strength. Many companies are finding that it is an inefficient use of their time and energy to attempt background check services that an outside specialist can efficiently and cost-effectively provide. In addition, the employer would have to learn the many complicated state and federal laws that govern what information they can and cannot access, and acquire specialized software and information sources.
The cost of outsourcing is also a consideration. An employer would have to spend staff time and resources physically managing the process, including computers and implementing a software solution to manage and track all applicants being screened. On the other hand, a typical report from a recruiting firm should cost less than the first day’s salary paid to the new hire, known as the “less than a day’s pay rule.” Considering the cost of a bad hire, this is a minimal investment. Some companies conduct a deeper selection of the highest paying positions; however, even if the position pays more, the relative cost of the higher selection compared to the higher salary remains the same. Unless an employer is so large that it incurs the additional administrative overhead of an in-house background check unit, most employers outsource this task.
How to choose a vetting company:
Since there are dozens of companies that offer job screening services, some precautionary advice is necessary regarding the choice. First, an employer must look for a professional partner and not just an information provider that sells data at the lowest price. Second, an employer must apply the same criteria that it would use to select any other provider of critical professional services. For example, if an employer were choosing a law firm for legal representation, she would not simply choose the cheapest law firm. Although cost is always a consideration, the employer will clearly want to know that she is selecting a competent, experienced and knowledgeable law firm that is reputable and reasonably priced. Above all, an employer would want to know that he is dealing with a company with integrity. The same criteria should be used to select any provider of a professional service. A screening service must have the proven ability and knowledge to provide this professional service. A review of the company’s website and materials, as well as contacting the company’s current clients for a professional reference, should be helpful in establishing the company’s qualifications.
An employer must check to see if a business has joined the National Association of Professional Background Checkers (NAPBS). Membership in NAPBS demonstrates a commitment to professionalism and an industry-wide code of conduct. Additionally, a sample request for proposal is available on the author’s website listed below. Legal compliance and subject matter expertise
It is imperative that a recruitment service understand the laws governing pre-employment selection and hiring, and agree to provide the employer with only information that the employer may legally possess.
The Federal Fair Credit Reporting Act (FCRA) governs background investigations in the US It defines a background investigation company as a Consumer Reporting Agency (CRA). A CRA must have a thorough understanding of the FCRA and applicable state laws that control everything from what forms are required and what is legal to report, to how to respond to a consumer inquiry or complaint.
Does the CRA have legal knowledge of 50 states, since state law is just as important as federal law?
Does the CRA keep its clients updated on legal and regulatory changes and developments?
Does the CRA make an effort to review specific reports or data before providing it to the employer?
Does the company understand that a search of the so-called “domestic criminal” database is only a secondary detection tool and cannot generally be relied on as a primary source of information?
Does the CRA demonstrate that it understands that the use of criminal records is subject to the concerns of the EEOC and discrimination law?
Customer Service, Consulting and Training:
Since pre-employment screening is about much more than just providing raw data, an employer must determine how a CRA provides customer service. An internal trouble ticket system, for example, is a best practice to make sure nothing gets away. Having a specific account manager who knows the needs of an employer is a better option than calling a general customer service group. A service provider should also be able to work directly with the security or Human Resources department to provide the necessary training and guidance.
It is also important to choose a company that is familiar with the special needs of your industry. For example, the health care industry has special concerns and requirements: unique licensing standards and disciplinary actions.
Prices:
Although it is important to obtain competitive prices, it is generally not advisable to choose the lowest cost provider. As the old saying goes, you get what you pay for. Although some companies can cut some costs through efficiency and technology, one of the most important areas in which a screening company can cut costs to lower prices is by hiring fewer and cheaper employees. Since recruiting is a knowledge-based profession that is highly regulated, the key criteria in selecting a firm should be the knowledge, training, and experience of the staff member servicing your account.
Action criteria for information providers:
Does the CRA make it clear how they obtain the data and what processes are used internally to ensure accuracy and fast response time? There may be times when there are delays that are beyond the control of the CRA; however, it is critical for an employer to have accurate status reports in real time.
Find out about the CRA’s Internal Quality Assurance processes. This should also include how a CRA trains and updates its own staff.
Software and Internet Options:
A service provider must also be able to provide technology solutions that fit with employers’ hiring practices. Most providers have online systems and there are many options available for online consent and seamless B2B integrations with recruitment and HR systems.
Data security and privacy; References:
The information in a background report is sensitive and confidential. Reporting should be restricted to those people who are directly involved in the recruitment process. A recruiting company should have policies and procedures in place to ensure confidentiality. You must be able to provide a privacy and data protection statement.
As with any provider of a professional service, an employer will want to check the provider’s references. Just as a recruiter should advise an employer to carefully screen each applicant before he or she is hired, an employer should exercise the same due diligence when hiring a recruiter.