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8 Things To Consider When Looking For A Background Check Vendor

June 29, 2015


June 29, 2015

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A background check is one of the most powerful measures available for screening potential or current employees for any staffing company. When used properly, it can enable an organization to hire or retain talented individuals who can give it a competitive edge.

However, when carried out sloppily, background checks can become a liability to an any staffing organization. At best, it can make the organization to hire individuals with questionable academic and professional credentials or even criminal records. At worst, it can open up the organization to expensive lawsuits.

To maximize the benefits and minimize the risks of carrying out background checks, it is necessary to hire a background check vendor. Unfortunately, given the sheer numbers of vendors out there, finding the right one isn’t a piece of cake. What makes it even worse is the fact that every vendor advertises themselves as the best in the business.

So, how can you sort out the true vendors from the pretenders? Well, you need to know what to look out for. There are actually numerous things you can consider when looking for a background check vendor. The seven most important are the following:

1.  Range Of Services

Most background check vendors offer a range of services such as education verification, employment verification, criminal records checks, and so on. Of course, your primary interest will be on whether the vendor offers the specific services you need. Even then, there are two other things to verify as regards the services offered by the vendor:

First of all, ask whether they offer standardized or customized services. Standardized services take a “one-size-fits-all” approach. Basically, every client is offered the same service. This has an advantage of being speedy. Also, if the standards are well-defined, it can produce some accurate information. Standardized services have one weakness: they can easily miss out on vital details, or you can end up paying for a bunch of information which you don’t actually need.

Customized services are tailored to the needs of a client. Basically, before designing an approach to use for the background check, the vendor analyzes your needs and produces a special service for you. This isn’t as fast as the customized services. However, it offers greater accuracy, and ensures that you get exactly what you want. As such, unless you are constrained by time, you may want to opt for a vendor who offers customized background checks.

Secondly, ask what other extra services the vendor provides. Good vendors offer some extra services designed to make legal compliance easy for you. One such service is sending the pre-adverse and adverse notifications on your behalf. Another is furnishing you with the latest legal provisions. Such extras the make it easier to comply with Fair Credit Reporting Act (FCRA) guidelines and other legislations.

However, when considering these extra services, be sure to verify that their cost is covered in the standard pricing. Most companies offer these extras for free. But some of them charge for them separately. Be sure that you don’t inadvertently pay extra (especially if you are in position to perform these services by yourself).

2.  Accuracy

Most background check lawsuits often begin with inaccurate information. It isn’t uncommon for background checks to unearth criminal records which are actually inexistent. When lawsuits are brought after adverse actions were made from inaccurate information, the company almost always loses them. Therefore, the accuracy of the information provided by a vendor is paramount.

Now, accuracy is actually an abstract concept. As such, it is not something which can be judged directly. However, there are two indicators which you can use to judge a vendor’s degree of accuracy.

The first is dispute rate. This is basically the percentage of background checks results which are disputed by job applicants or employees. A higher percentage of disputes shows less accuracy. Please note that any percentage estimate should be based on the number of applicants/employees who actually receive their background reports. The simple fact is that some vendors don’t send a copy of the background check reports to the applicants or employees.

The second is the vendor’s dispute resolution process. In other words, how do they handle disputes? Good vendors take any disputes very seriously. In most cases, they carry out the background check again – at their own cost. A company which simply ignores disputes or lacks a clear dispute resolution process can easily lead you into legal problems.

3.  Access To Background Check Professionals

When problems arise (and they almost always do), the last thing you want is to be stuck with an inexperienced call center employee. You want access to actual background check professionals who can give you concrete responses. In some cases, you actually need to get through to top-level managers at the company. As such, you need a vendor who will grant you such access.

So, before hiring a company, find out who you will contact when problems (e.g. inaccuracies in background check results) arise. Good vendors know the potential legal consequences of background check mistakes. As such, they offer you access to their experienced professionals whenever need arises. Some even offer you specific contact persons. The thing you want to avoid is serious situations arising, and you getting stuck with some call center rep who doesn’t even understand the legal intricacies involved.

4.  NAPBS Accrediation

The National Association of Professional Background Screeners (NAPBS) promotes background checks best practices and legal compliance. Although membership isn’t a guarantee that a vendor is competent, it shows that they are keeping up-to-date with the latest standards, best practices and legal changes. Basically, NAPBS membership shows that a vendor is committed towards providing the best quality of service possible.

5.  Experience In Your Industry

As a general principle, experience is extremely important in background checks. This is because, over the years, people have developed ingenious ways to hide their background info. As such, an inexperienced vendor may not know such nuances. Similarly, they may not understand the legal complexities involved.

Even more important than general experience is industry experience. A vendor who has carried out background checks for organizations within your industry is much better than one who hasn’t. This is because certain industries have specific compliance requirements which others may not have. For instance, the health service industry has sanction lists – something which most other industries don’t have. An experienced vendor can enable you to accurately navigate industry-specific compliance requirements and legal issues.

However, mere experience isn’t enough. You also need to look at the vendor’s track record. Over the last few years, many organizations have faced lawsuits, class actions and even Federal Trade Commission (FTC) fines after despite their background checks being carried out by vendors. In fact some vendors themselves have been fined by the FTC (a case in point is HireRight which was fined 2.6 million) for violating background check laws. The last thing you want is to hire a vendor with a flawed track record.

6.  Service Area

The service area is basically coverage of a vendor’s services. In most cases, the choice is between state coverage and local coverage. In a few cases, there may be need for international coverage. Whatever the case, the service area will almost always depend upon your needs.

The vendor’s service area can determine the thoroughness of the background check. Let’s take criminal background checks, for instance. There is a national database which can be used to conduct criminal checks. Different states have their own databases as well. The state databases tend to be more recent than the national database.

Even then, for real accuracy, information in both national and state databases needs to be verified from court records. This is because sometimes, simply having a name which is similar to that of a convicted felon can throw up a false criminal record. Only court records can clarify such misunderstandings.

Some background check vendors now collaborate with or subcontract to vendors who are based in other states, especially when national database searches raise red flags. Some even collaborate with vendors in other countries where necessary. The contracted vendors then carry out local checks on behalf of the vendor. Such arrangements increase the likelihood of you getting reliable background information.

7.  Automation

Most background check vendors now have information technology systems through which their services can be accessed. Such systems are typically available through either desktop, mobile or web applications. They provide simple interfaces through which you can place background checking orders, track orders or make payments.

One feature which you need to find out whether a vendor provides is automation of their IT systems. Automation basically provides a simple way of carrying out repetitive tasks (e.g. filling in applicant data). Taking applicant data as an example, automated systems enable you to submit data for multiple applicants at once, instead of submitting them one by one. This not only saves time, but also makes your life simpler.

Another feature which you need to consider is integration. This is important especially if you already have a Human Resource Information System (HRIS) within your organization. Serious vendors can enable you to integrate their system with your HRIS. This enables you to access their services directly through your internal systems, thereby shortening the learning curve involved in getting to master their system.

8.  Pricing

This has been deliberately placed last. Although it is important to get a vendor whose services are within your budget range, price shouldn’t be the first thing you consider. In an ideal world, pricing shouldn’t even be an issue. However, organisations operate within strict budgets, so let’s consider it.

Generally, background checks are just like other goods or services – you get what you pay for. Basically, the costlier the service, the more thorough it is, and vice versa. As a rule, it is advisable to stay away from very cheap services. But then, if the kind of background check is relatively simple (e.g. employment or educational verification), or the position isn’t sensitive, then you can opt for a cheaper service.

Even then, before you select a vendor simply because their services are the cheapest, please consider the potential downsides. Because a cheap service isn’t thorough, it has the potential to have mistakes. These mistakes can open you up for lawsuits or class actions which can cost you millions of dollars. Basically, by attempting to save a few hundred dollars, you can create a scenario which can ultimately cost you millions of dollars. Whether such a risk is worth it is entirely up to you.

In summary, selecting a background check company isn’t something which you can take lightly. Therefore, don’t let yourself get hoodwinked by catchy advertising which promises quick results in 24 hours, for a few dollars. Remember the old adage: “if it sounds too good to be true, it probably isn’t true”. So carry out your due diligence. Simply follow the above guidelines, and you will find a background checking vendor who will give you exactly what you deserve. Happy Hunting!

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