SI Review: December 2010

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Four Top Trends in Background Checks, Si Review December 2010

Top 4 Trends in Background Checks

By Jeff Reeder

Staffing firms have long embraced background screening as a value add for clients, and indeed growth is up. However, the scope and methodologies of background screens are changing, and staffing firms need to be aware of new capabilities, and challenges. We talked to a number of screening providers and experts to see what changes they are implementing and trends they are seeing, and what this is likely to mean for staffing firms. Here are the top trends in background screening and staffing.
Trend One: Growth
Our experts say that staffing firms are using background checks more than ever, and our Staffing Industry Analysts' own research backs this up (see charts throughout the article).

Rob Pickell, SVP of Customer Solutions for HireRight, notes that, "The consistent use of screening by staffing firms has been an area of growth for a number of years. Staffing firms recognize that it's critical they perform effective employment screening to ensure the quality and safety of their workers. In many cases, clients require staffing firms to screen, and for others, they offer fully screened employees as a quality measure and a competitive differentiator. There is still much room for growth, though, in terms of staffing firms following screening best practices along lines similar to their client companies."

Growth in screening has in large part been fueled by security concerns, say our experts. "Companies are increasingly interested in security," points out Jeff Wizceb, VP of HR Plus. "They are checking maintenance, security, landscape and anyone with access to their systems."
Laura Randazzo, vice president of services at Accurate Background, has seen an increase in organizations that are requiring their staffing, janitorial and other vendors to enlist the same level of background screening due diligence as their organization. "For a long time, this was one of the most commonly overlooked loopholes in an employer's risk management program," she says. "Every organization can be held accountable for a temporary employee or vendor who represents the organization. For instance, if an organization outsources their IT support to an outside vendor and those IT professionals are given access to customer data and are not appropriately screened, the organization along with the vendor could be held liable in the event there is a data breach or a lawsuit for negligent hiring. It does not matter that an outside vendor has provided these IT professionals to the organization. Employers must establish requirements for their vendor network based on the specific service that each vendor is providing."
Pickell points out that the circumstances of today's economic market favor both staffing and screening, and particularly, screening by staffing firms. "Given market dynamics, a growing percentage of the total workforce is contingent, and experts expect the contingent workforce to lead the hiring recovery," he says. "According to this year's HireRight Benchmarking Report, two-thirds of organizations utilize contingent labor and about one in four organizations have a substantial contingent workforce population. This trend demonstrates a tremendous opportunity for staffing firms today." But, he cautions, "The phenomenon of adverse selection often hits the staffing industry the hardest – as applicants with questionable backgrounds head to staffing firms for work, assuming a background check will not be performed. For this reason, it's critical that staffing firms maintain screening standards and confirm the backgrounds of their candidates before placing them in positions."
In terms of where staffing firms and their clients are focusing efforts, a recent survey by TalentDrive, maker of the sourcing solution TalentFilterSM, found that in current use of recruiting technology solutions, 48% of companies use background checking software, and 41% use online applicant screening services. The survey quizzed more than 8,000 F1000 companies and staffing firms.
Trend two: Going Global
Companies often ask their staffing partners to help them with a global presence, and that is extending to services such as background checks, report our experts.
Pickell points to a dramatic jump in this regard. "In fact," he says, "this year's HireRight Benchmarking Report shows that the number of respondents that conducted or plan to conduct global screening rose significantly from 11% in 2009 to 25% in 2010. Companies are realizing how critical screening internationally is, and new technologies and services make global screening much more accessible, timely and cost effective today. As screening becomes more readily available and understood globally, these numbers will grow rapidly."

Randazzo says, "There has been a significant increase in the request for background screening on the global level to accommodate corporate locations in other countries as well as job applicants from other countries coming to the United States to work. The global screening arena presents its own unique challenges that many employers aren't aware of."
Trend three: Should Staffing De-Friend? Social Screening, and Its Problems
By now everyone has heard tales of Twitter and Facebook embarrassment, but when it moves from the social sphere and into the world of employment, that's when things really get sticky.

In the first place, no one can deny that social screening is going on. Nick Fishman, cofounder of EmployeeScreenIQ, sees greater hiring controversies to come due to social networking. Social networking has "exploded and changed America's culture," he says. He points out a recent CareerBuilder study that found one in five employers used sites such as Twitter and Facebook to influence hiring decisions, even though many of these sites have no verification process, and some may be edited by anyone with Internet access. And the CareerBuilder survey may be low. A survey of 350 employers by Vault found that 44% of employers use these sites to examine the profiles of job candidates.

Adds Pickell, "It's interesting, but about a quarter of respondents in this year's HireRight report said they check or planned to start checking social networking sites as part of their screening process. This can definitely be a dicey proposition as these sites can reveal things about a candidate that the recruiter likely does not want or need to know, including personal information like race, gender, marital status, political or religious affiliations and so on. It's very important that organizations create and enforce policies and procedures around the use of social networking sites. There clearly is a role for appropriate data from social networking sites in the screening process, but we caution our clients not to be on the leading edge of testing the boundaries on this topic. It's better to keep an eye on how things are developing and being a fast follower when accepted practices become clearer."

Says Les Rosen, founder of Employment Screening Resources (ESR), "In the past, ESR has labeled the use of the Internet and social networking sites as a hot topic. In 2010 and onwards, it appears very likely that litigation over the use of these sites will be the hot topic."

He points out two basic problem areas. "One big issue of course is discrimination. Applicants can bring a ‘failure to hire' lawsuit if the employer utilized information from a social networking site about their race, ethnicity, nationality, martial status, religious preference, age, etc. Another issue, yet to be decided, is privacy. Even though the information is on the Internet, strong arguments can be made that consumers have a reasonable expectation of privacy on Websites where only friends are supposed to visit and the terms of use prohibit commercial exploitation. In addition, employers need to be careful about the use of legal off-duty conduct. There are also issues as to authenticity
and whether a site really refers to or belongs to an applicant."

Rosen continues, "Recruiters are also not immune from potential liability just because they are searching for ‘passive' candidates who may not know they are the victims of discrimination. Discrimination rules apply equally to recruiters. And firms that use social network sites in a discriminatory fashion could find themselves in hot water if a recruiter spills the beans, or the recruiting practices result in a workforce that is statistically imbalanced."

Says Randazzo, "Employers are increasingly using social networking sites … to screen job candidates in the hiring process. They are looking for information that indicates behaviors such as excessive alcohol and drug use, inappropriate videos and pictures, negativity toward former employers, and poor communication and grammar."

She continues, "With this trend on the rise, employers must take into consideration that the information on these social networking sites is unverified so it could be inaccurate and defamatory. For instance, these sites do not have strict processes in place to prevent a person from setting up an account for another person
without their knowledge. In addition, the photos seen on these social networking sites can be altered, and profiles can be breached relatively easily. Employers may also find themselves discriminating against job candidates and using information that is restricted such as religion, sexual orientation, age and race. In fact, some states even restrict employers from using legal off-duty conduct in a hiring decision, such as alcohol and tobacco use."

For those staffing firms that still want to use social sites as a part of their check, Randazzo recommends that "Employers using this information must take some precautionary steps to avoid any possible legal ramifications such as a clear, written policy developed by legal counsel that outlines the evaluation protocol so hiring managers are clear on what can be used. Also, employers need to make sure that their applicant disclosure includes language allowing character references from Internet sources. Finally, employers need to make sure they are able to prove that any negative information uncovered on a social networking site is accurate and relative to the applicant's ability
to do the job."

Trend four: Integration
In good news for staffing firms, increasingly, background screening can integrate into their other sourcing automation.

Says Pickell, "Integrating screening with ATS and talent management systems is a very common practice in large and midsize organizations that recognize the value of integrations in driving improved staffing efficiency, effectiveness, control, and in delivering a positive applicant experience. Our report shows that more than 80% of respondents integrate employment screening with other processes."

Adds Randazzo, "System integration between an employer's Applicant Tracking System (ATS) or Human Resource Information System (HRIS) and their background screening provider can greatly streamline the hiring process and guarantee consistent hiring practices companywide. These integrations often allow employers to order and retrieve background checks directly from the ATS or HRIS so that all information in the hiring process can be found in one technology platform rather than a collection of data in multiple platforms. Utilizing an ATS or HRIS application that is integrated with the background screening provider also allows employers to set up consistent background screening requirements based on the job position and validate each job application as it compares to key job requirements. More sophisticated integrations offer automated methods for adjudicating the results of the background check based on an employer's specific hiring guidelines while assuring compliance requirements."

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