State of the Current Market –
According to ProcurementIQ, a procurement trending organization, the steady demand for background check services, especially as social media has expanded, has enabled the industry to increase at a rate of 1.2% per year over the past 4 years. It is predicted that prices will continue to modestly grow in the next 12 months, especially as more workers return to the office. There are a proliferation of suppliers in this industry (over 2000), and as such, the buying power for those looking to subscribe to a new service or renew a current one, is very favorable.
The top 10 providers include:
An Evolving Support Service –
The demand for background check services have evolved over the years to accommodate many business sectors. What started out as an essential service that pre-screened job candidates in order to lower the risk of negligent hiring by companies has expanded to identify the “most qualified candidates” for work, political offices, board memberships, volunteering, tenancy (both residential and commercial), the sporting and medical professions and other positions. Media companies also rely on background check services when verifying selective interviewees’ authenticities.
Additionally some businesses (law firms, healthcare companies, financial services) require screening updates to ensure employees’ professional records of experience are both valid and accurate.
It is not illegal for an employer to ask questions about an applicant’s or employee’s background, or to require a background check, however there are important legal guidelines to follow on how the information is collected and used and can vary by state. The Professional Background Screening Association (https://thepbsa.org/) offers a wealth of information and advisory support for
- Consumers concerning the scope of screening services and a person’s rights (see Fair Credit Reporting Act) and responsibilities related to background check for employment or tenancy.
- Businesses who desire to comply with state and federal screening regulations.
Additionally, federal labor bodies, such as the U.S. Equal Employment Opportunity Commission (EEOC), provide the latest legal guidelines to assist employers in the background check process. See – https://www.eeoc.gov/laws/guidance/background-checks-what-employers-need-know
The Screening Search Process-
Each industry has particular credential areas of importance. As such, it is critical for background check suppliers to include comprehensive search coverage for each kind of screening.
Here are some examples:
- Healthcare employee screening – tailored to the healthcare industry and includes criminal, sex offender, identity verification, past employment, education, drug screening and license verification.
- Law firms – includes associate, lateral partner, summer associate and professional staff profile searches. Attorney profiles typically include checks on SSN, criminal (federal & state), past employment, education and credential verification and social media.
- Real estate tenancy screening – typically includes national criminal background check, credit report, eviction history, and employment history.
Not all Services Are Priced the Same Way –
Typically suppliers offer packaged fixed pricing for sets of profile searches, pricing per search or a hybrid approach of both. It is crucial to check state search coverage as well to determine what is included in predefined profiles when selecting a background check supplier. In order to limit any out of pocket costs, buyers should keep their requests along the lines of the contract (if one is present) and evaluate any additional fees twice a year to determine if discounted pricing can be offered based on demand.
Pricing conditions will vary depending on the number of searches performed during a period of time (this may bring volume discounts), whether searches are package inclusive or out of scope, the turnaround time for certain searches that require external checking (standard vs. priority) and whether any 3rd party search supplier costs, such as court access fees from some states, are applied.
What Does this Mean to You as a Buyer?
Having valuable benchmarking knowledge, especially as it pertains to peers in your industry, is indispensable before committing to a new service or renewal. Seeking professional advice from a subject matter expert (SME) who knows the market and distinct requirements for your particular business is also key to a successful future purchase or renewal outcome.
Other Considerations When Buying:
- Review platform usage to determine if volume discounts can be applied to specific searches or packages.
- Consider consolidating services. If your company or organization has several locations or an international presence, chances are you’re supporting more than one service. Review all your spend in this area and determine if it makes sense to consolidate.
- Check with your IT and HR departments for any technology requirements (this may include HRIS integration requirements, support of mobile devices, etc.)
- Verify the supplier’s data sources. Does the supplier use primary background source data, aggregated data, or both?
- Examine both privacy and security concerns.
The considerations above are just a sampling of what needs to be reviewed. Chase Cost Management has experienced SMEs that can assist buyers by identifying all your essential requirements when procuring a background check service or prior to renewal.
Have you reviewed your background check services lately?
Contact Chase Cost Management ([email protected] or p: 929-416-3050) for a free assessment. We can determine if your pricing requires adjusting and your services are the most appropriate for your business needs. We can spot spending anomalies and watch for improvement potential taking away the time and hassle of doing it yourself.
Authored by Robyn Rebollo, Project Director, Chase Cost Management