The Increasing Use of Background Checks

Igor Altman, a colleague of mine at OpenView, forwarded me an article last week on TechRepublic which discusses the explosive growth in the background screening industry in the past decade.The article cites a study by Workforce Management (you’ll have to sign up for a free account to see it), which found that 16 percent of employers now screen their existing employees on an ongoing basis, up from 12 percent a year ago.

The article also mentions a study conducted by HireRight, which is a background screening provider based in Irvine, CA. HireRight surveyed 1,411 employers of all sizes in 15 different industries, including expansion stage companies and corporate venture capital.

Their findings include:

• 93 percent of employers report that they run criminality checks, up from 85 percent in 2008.
• 84 percent of employers conduct comprehensive screenings before the first day of work; 8 percent screen immediately after the start.
• 10 percent of employers report that screening adversely affects the hiring decision in a staggering 50 percent or more of the cases

So why the increased use of background checks for recruiting support? I think that a large part is due to the fact that the candidate pool is becoming bigger and talent is running deeper, and background checks are being used to weed out candidates early on in an interview process. Others are using background checks because they feel that it will ensure a safer workplace. Many companies seem to use criminal record or credit score checks to make character judgments against job candidates, although they may not be a job-related or business necessity. Finally, it seems that many companies are taking advantage of this added candidate screening because the software itself has never been more accessible for private-sector employers.