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Nowadays the necessity of
background checks is a stand-alone fact. Who among us wishes to incur
the expenses of high employee turnover, workforce violence, and criminal
activity from non-existent background checks? Which C-level executive
wants to miss opportunities to make the correct hires due to slow
background checks, and who desires lawsuits resulting from inaccurate
background checks and data theft?
While background checks are indeed necessary, they must be done both
quickly and accurately to be of optimal use and maximum value to
executives and their companies. Today, while many employers are making
employment screening a priority, knowledge of the background check
process is marginal compared to the prevalence of its use. Although the
structure of the background check process and how it works may seem
insignificant to the end user, such knowledge can affirm the quality of
background checks you receive.
This overview of the background check process is intended to raise your
awareness as to which vendors and researchers are involved,
simultaneously exhibiting whether the data sources accessed are relevant
to your inquiries. Maintaining an awareness of the status of the
background check industry and its inner working will allow your HR
department to remain abreast of developments, so that they--and
you--ultimately possess the knowledge you require to make or suggest
improvements.
What is a background check?
A background check is a view into a person's past which includes
histories on several behavioral domains, such as criminal, civil, social
security, and employment history. First and foremost, background checks
are essential to preventing negligent hiring liabilities. In 2004, Info
Link Screening Services reported that 8.4% of prospective employees
failed to reveal their criminal history. This seemingly small percentage
belies a large risk factor to employers, as those who fail to perform a
background check on employees involved in any wrongdoing will ultimately
be held accountable for the ensuing consequences.
While employers understand the significance of background checks, many
are hesitant to implement a background check policy or are dissatisfied
with the status quo, due to the perceived (and sometimes real)
inconveniences of the process. Such inconveniences manifest themselves
in the inability of background checks to consistently provide accurate,
cost-effective, and timely reports. So the question is this: Why do
these problems exist? An overview of the complexities of the process
will reveal why such inefficiencies arise.
The Current Delivery System
The process of ensuring that the most productive and qualified applicant
is hired begins in HR, with the consent of an applicant. There are three
resources available to HR to perform a background check:
- Consumer Reporting Agency (CRA) - also known as a
background check company, these are private agencies comprised of
individuals who specialize in the retrieval of specific background
check information such as credit history, social security number
trace, criminal background search, motor vehicle information, prior
employment tracking, etc. These agencies are the primary resource
for delivering a background check.
- Human Resources Management System (HRMS) - is an
interactive filing cabinet for HR. It is a software application that
aggregates human resource functions such as payroll, compliance,
salary, performance analysis and review. Additionally an HRMS must
contract with a CRA to perform a background check.
- Applicant Tracking System (ATS) - is a software
application aimed at assisting HR recruit employees more
efficiently. Like an HRMS, an ATS must work in conjunction with a
CRA to perform a background check.
Depending on the type of background check needed, HR will either work
directly with the CRA, or indirectly through an HRMS and ATS. In the
cases when HR works through an HRMS or ATS, the process by which the
information flows is more automated.
Whether directly or indirectly used, the CRA is an integral part of the
background check process. Only with the help of a CRA can HR, HRMS, and
ATS access the information needed to complete a background check. CRAs'
possess many options as to where and how they retrieve information.
There are four main sources by which a CRA can extract data:
- Researcher- This is an individual who gathers specific
information on an applicant from a specific information source. This
individual may be a private contractor or an employee of a screening
company. Example: This could be a criminal court records retriever
who physically gathers criminal data from a county court house.
- Specialized Vendors - These are companies that specialize
in collecting and reselling a specific type of information to
screening companies, i.e., employment history, data.
- Online Criminal Database - This is an aggregation of
criminal data from instantly accessible sources, such as a
courthouse.
- Data Aggregator - A data aggregator compiles information
from suppliers that maintain databases and/or maintain gateways to
information, including credit bureaus and local, state, and federal
governments.
Once the information is extracted by a source, it is then sent back to
the consumer reporting agency (CRA). The process by which the
information is transferred to the CRA is often very tedious. Whether it
is via facsimile, email, or regular mail, multiple transactions will
likely occur. This leads to longer turnaround time and a waste of
resources. One by one, as each source's information arrives at the CRA,
it is oftentimes manually filtered, organized, and compiled into a
report. Depending on the location to which the CRA is sending the
report, either directly to HR or indirectly through an HRMS or ATS, it
must be converted into a format compatible for transmission.
This lack of process integration contributes to longer turnaround time,
increased opportunity for error, and increased operating costs.
Obstacles arise when the process from report request to fulfillment is
not integrated and standardized. These inherent complexities of the
information flow often times leads to a less accurate background check
which can increase HR's liability.
The fact is, the current delivery system is inaccurate as well as costly
in terms of time and money. What, then, can you do to ensure fast,
accurate, data-safe service for background checks?
Consideration for the future
In a world of abundant technology, when obstacles arise, there is an
effort made to rectify the situation and provide a progressive solution.
Due to the increasing importance of HRMS and ATS, the technology
solution is automated data exchange. Automation will become the standard
by which the framework of the background check delivery system is based.
CRAs' are in the process of connecting to these systems to automate data
exchange and reduce HR costs. Presently, the HR-XML consortium
represents an important step towards enabling these connections. The
HR-XML consortium is a non-profit and independent organization that is
already established in twenty-two countries. It provides a variety of HR
solutions to improve automation the background check process. Most
importantly, HR-XML is a standard for the data exchange between clients
and vendors despite the varying technology used within the industry.
Tomorrow's HR will be able to work within a seamlessly integrated and
standardized system allowing information. These systems will decrease
operating costs and turnaround time while increasing accuracy and return
on investment (ROI).
Conclusion: The recipe for success
Within the HR industry, background checks have become essential due to
an increase in the demand for a safer work environment. To protect
against negligent hiring, HR must take the extra step and implement
background checks for their own security. As you can see, there are
weaknesses in the background check system, but there are also
developments aimed at improving the process. HR-XML integration to HRMS
and ATS, along with background check company automation, is just the
beginning of a new era of technology that can be leveraged to make your
company safer and your HR more effective.
About Shawn Rucks and deverus, Inc.
deverus is the background check logistics company that creates and
delivers the technology to quickly consolidate background check
information, and to manage business operations for their clients. Shawn
Rucks, President and CEO, launched the Austin-based firm in 1998, having
already founded e-screening.com, an employment screening company he
subsequently sold to APSSI. As the only background check logistics
provider to begin as a background check company itself, deverus provides
the right information fast for background checks.
deverus' customers are background check providers and researchers
serving a variety of industries concerned with making the right hiring
decisions quickly. deverus' technology is thus directly and indirectly
involved in helping human resource company decision-makers, human
resource management systems, and applicant tracking systems. deverus
makes the background check process better. For additional information,
please visit:
www.deverus.com.
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