SHRM reports that more than 85 percent of large companies and a rapidly growing number of smaller employers perform some form of background screening today. Traditionally, however, background screening practice has been somewhat fragmented, often including a mix of manual and automated services performed both in-house and by various providers. So how has background screening changed from this traditional picture? Where is the industry going and how can HR and hiring professionals best make use of the solutions available today to create an efficient, thorough and effective hiring program? To answer these questions, a recent benchmarking screening study of individuals that perform background screening today ranging from businesses of more than 25,000 employees to small businesses of less than 100 employees was performed by HireRight, a leading on-demand background screening solutions provider. The study provides human resources professionals with relevant information they can use to compare their screening practices with peers, to determine if they are behind the curve or leading the pack in adoption and integration of advanced screening techniques. At the same time, the study provides interesting input on best practices for employment screening as well as areas of potential weakness in today's screening and hiring programs.


Program Why's and Who's
Eighty-six percent of all companies surveyed named risk management as the primary reason for background screening. This is understandable since negligent hiring lawsuits are on the rise and awards to plaintiffs can exceed $1.5 million. More positively, 66 percent also named "quality of hire as a principal motivation. These were followed by workplace safety (46 percent), SOX and other compliance requirements (58 percent), and reduction of theft and fraud (33 percent).

The human resources function is overwhelmingly the leading voice in background screening programs. Eighty-three percent of respondents said that HR determined their background screening program standards, although in 54 percent of cases, the legal department also played a key role reflecting the importance of understanding global, national and local laws regarding background screening and hiring practices. Twenty-two percent named security as a contributor to the program indicating a best practice of using a multidisciplinary team in the development of screening program standards. Seventy-nine percent of respondents said HR managed the ongoing background screening program.


Screening Trends Revealed
The study revealed a number of trends in background screening. Quite significantly, 76 percent of all respondents' background screening programs were centralized, showing a move away from the earlier practice of decentralized programs using many disparate suppliers and standards. Centralized programs allow employers to apply standards and practices equally and without bias to all offices and constituencies  a key element of a successful program. The increasing need for clear, efficient communication and collaboration from the central authority to all stakeholders is reflected in the growing trend toward integration of the background screening program into the companies' hiring systems. Twenty-six percent of organizations currently had such integration and another 32 percent were planning to integrate in the near future.

U.S. Employment Eligibility Verification (aka DHS E-Verify) is a topic on the minds of many employers. Seventy-two percent of companies are still performing all eligibility processes in a paper-based system  a true nightmare of paperwork for many. Sixteen percent had switched to an electronic system. Twenty-five percent of respondents were using the Department of Homeland Security E-Verify System and were applying it to all employees. Twenty percent apply the system only in those states in which it is required. Another 31 percent are evaluating the E-Verify System.


Who Gets Screened?
By far, new permanent hires are screened most often  81 percent of companies make this a practice supporting the goal of assuring the quality of new hires. These applicants are generally screened either before (36 percent) or after (62 percent) an offer is made. But surprisingly, only 12 percent of respondent companies screen all existing employees, and only 10 percent screen all employees and non-employees, including temporary labor, contractors, and vendor employees. This statistic would appear to be in sharp contrast to the stated goals of risk management and securing workplace safety. Just because an employee was screened when he or she was hired five years ago does not mean an employer will be held harmless in a case of negligent hiring if the employee is not screened regularly. Best practices dictate the need for regular re-screening of the entire workforce in order to reduce a company's risk exposure. Such a practice should be written into a company's background screening policy so that all new hires understand that they will be re-screened on a regular basis.

While the study shows that the screening of existing employees is often overlooked, there is a marked trend toward the screening of non-employees, including contract, vendor, partner and temporary employees who have access to a company's facilities, personnel and information. Thirty-six percent of respondents screen their temporary labor, 25 percent review contractors and 14 percent require vendor employees to be screened. An additional 20 percent of respondents planned to implement an extended workforce screening program during 2008. These practices help to address the phenomenon of adverse selection in which candidates with criminal records gravitate towards companies that do not background screen. Some of these same employers might work as vendors to larger firms. Not requiring screening of temporary and vendor employees means even companies that diligently screen their own workforce can be open to fraud, theft and workplace violence from outside workers.

There is also a growing trend toward the expansion of non-U.S. screening. Thirty-five percent of respondents said that they perform non-US background screening on their U.S. hires only, while 28 percent perform screening outside the U.S. on both U.S. hires and non-U.S. hires. Twenty percent of companies expressed that they plan to screen non-U.S. employees soon.


Most Popular Searches
A great majority of firms perform verifications of education and employment, drug testing and criminal records checks. Interestingly, education history verification leads the list at 93 percent. Closely following are employment verifications at 88 percent and criminal background checks at 85 percent. Almost 70 percent perform drug testing and checks of driving records. Other types of checks are used far less, including checks of references (27 percent), license verifications (28 percent) and credit checks (36 percent). In applying these searches, 46 percent of respondents screen all employees in their workforce the same way while 44 percent vary the screens performed by title, but maintain consistency within job descriptions. For example, the latter policy may perform credit checks only on financial professionals and motor vehicle records checks just for those driving company vehicles. Significantly, only six percent showed a variation in checks by region, strongly supporting the idea of centralized, consistent background screening policies.


Frequency of Uncovering Issues
Background checks uncover issues with surprising frequency. Two thirds of organizations report that the background check uncovers material issues with up to 5 percent of their applicants; and 1 in 50 organizations report finding issues more than 20 percent of the time. While not all issues indicate serious problems, they are enough to further reinforce the need for background screening as a standard practice by all companies.


In Summary -
A number of best practices emerge from the benchmark study that can be valuable to any HR professional. Among these are:

" Centralize background screening program management for greater control, consistency & visibility
" Create a multi-disciplinary team to set program standards
" Integrate background screening into existing hiring and employment workflows
" Introduce electronic forms to manage employment eligibility programs
" Expand background screening to include the extended workforce
" Expand background screening to include non-U.S. employees
" Perform domestic background screening on all employees  new and existing
" Require vendors to perform background screening on your non-employee workforce
" Apply consistent background checking criteria to like positions




To receive a FREE copy of the 2008 HireRight Background Screening Benchmarking Report, go to www.hireright.com/Benchmarking or call (800) 400-2761.

About the Author
Rob Pickell is vice president of marketing and product management for HireRight, a leading provider of on-demand background screening solutions. More information can be found at www.hireright.com.