Top background screening industry trends to watch in 2018 and beyond
Employment screening has firmly established itself as an integral tool in helping human resources professionals evaluate job applicants and mitigate organizational risk. However, the practices and processes surrounding employment screening are ever-evolving. According to Forbes, the job market in 2018 is predicted to be especially robust, due in part to the steady decline in the unemployment rate experienced in 2017. Many candidates have the option of multiple job offers, increasing the potential for employers to lose applicants in the onboarding process. New legislation and regulatory compliance concerns impacting recruiting and screening processes are popping up at a dizzying rate. Based upon the increasing needs of employers and job applicants alike, the following trends are expected to be the focal point of the employment screening industry in 2018.
Improving User and Candidate Experiences Through Technology Development
Background screening is often one of the first processes a job applicant encounters when joining a new company or registering with a placement agency. The process can leave a lasting impression on the applicant, especially if the encounter is negative. Savvy screening professionals understand a positive applicant experience is critical to successful onboarding. Progressive consumer reporting agencies (CRAs) will continue to invest heavily in the use of technology to make user interfaces intuitive for human resources professionals and applicants alike. Additionally, savvy screening professionals are partnering with Applicant Tracking System (ATS) providers to integrate ATS and screening platforms in efforts to minimize redundant data entry. The focus on mobility, enabling candidates and recruiters to request, view, and act on a wide variety of devices, will be a key development concern. Increasing cyber threats and reports of data breaches have heightened the need for increased investment in data security and protection of Personably Identifiable Information (PII.) The scarcity of top talent is also placing a greater emphasis on the need for quick turn-around times for report requests and the development of new services to speed time to hire to help ensure candidates quickly progress through the onboarding process.
Ensuring Screening Quality in Contingent Labor and Freelance Workers
According to a recent Society for Human Resource Management (SHRM) article, “nearly four out of five employers use some form of nontraditional staffing such as hiring freelancers, temporary workers or independent contractors on an as-needed basis.” Unfortunately, screening practices for non-traditional workers are often inconsistent or fall short of the standards established for full-time employees. This can leave both the employer and placement agency at a greater risk of harm. Many temporary workers have the same access to company assets, staff and clientele as their full-time, permanent counterparts. Additionally, when a staffing firm client elects to hire a temporary worker as a permanent staff member, they often require the worker to undergo an employment background screen consistent with their company policies and standards. When the screen uncovers a criminal history not previously disclosed, it can negatively impact trust and ultimately, the employer/agency relationship.
The Gig Economy now accounts for close to 34% of all US workers and is expected to rise to 40% by 2020 according to CNN Money. Freelance workers commonly perform services including ride-sharing, home repair, personal tasks, and child and senior care in close, unsupervised proximity with the publics they serve. Consumer demand for safety and quality is expected to increase the thresholds for screening of Gig Economy workers.
Regulatory Compliance Needs and Emerging Legislation Continue to Define Employment Screening Practices
There are numerous laws and guidelines CRAs and employers must follow in conducting background screening and utilizing the data obtained in screening reports for employment decisions. The trend of providing legal safeguards for specific categories of disadvantaged workers is expected to continue a path of upward growth. While many employers are now familiar with the consumer protections afforded under the Fair Credit Reporting Act (FCRA), adherence to FCRA guidelines is only one piece of the puzzle in developing legally-sound employment screening programs.
Started as a grassroots project by Legal Services for Prisoners with Children (LSPC), the All of Us or None campaign calls for legislation to restrict employers from inquiring about potential criminal history until after a legitimate offer of employment has been made. Currently, 31 states, the District of Columbia and over 150 cities have Ban the Box or Fair Chance policies. Even when a background screen is conducted after a conditional offer of employment has been extended, if the report reveals a criminal record, under the 2012 U.S. Equal Employment Opportunity Commission (EEOC) guidelines the employer must consider the job-relatedness of a conviction, time passed since conviction, and mitigating circumstances or rehabilitation evidence prior to making an adverse decision to deny employment. In efforts to mitigate legal risk and ensure compliance, many employers are removing questions requiring applicants to self-disclose previous criminal history on employment applications and other pre-offer documents. Further, they are adopting adjudication policies to ensure each applicant’s background screen is evaluated utilizing the EEOC’s three-prong test.
The newest wave of legislative development impacting hiring practices and employment screening is state and local laws banning questions regarding previous salary history. In an effort to bridge the gender gap and fight wage discrimination, 3 states, Puerto Rico and several municipalities have enacted legislation prohibiting employers from inquiring about an applicant’s salary history. Recently, the 9th Circuit Court of Appeals in an en banc decision ruled an employer cannot justify a wage differential between male and female employees by relying on prior salary history. The case set off a wave of commentary from numerous employment law experts with many predicting a steady increase in state and local legislation prohibiting employers from engaging applicants in questions regarding salary history.
Employers are encouraged to review their current employment screening policies and practices with a qualified employment law professional and stay abreast of evolving legislation to ensure continued compliance with all applicable laws.