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The candidate may have submitted an impressive resume, aced the skills test, and dazzled interviewers, but there is usually another important step in the process before a company extends a job offer—the background check. Businesses conduct pre-employment background checks before making a final hiring decision to verify the accuracy of the information that a candidate has presented and discover other information that might influence a hiring decision. Background check software streamlines this process by automating aspects of the process and enabling companies to manage checks for multiple candidates from a single system.
Background check platforms are typically not standalone systems. These platforms are often developed by background check companies, which are known in the industry as credit reporting agencies (CRAs). These accredited companies use the technology to manage the process as they provide businesses with employment screening services. Depending on the provider, screenings might entail a search of public records that is automated, or conducted by humans, or a mix of both. In this way, use of the software typically must operate along with the background check services provided by a company.
Background checking software products exist as standalone solutions as well as modules that are part of a larger human capital management (HCM) platform.
Standalone solutions
These products are specifically devoted to managing pre-employment background checks. They often integrate with other HR software, including applicant tracking systems and core HR software.
HCM platform
Some HCM platforms come with an integrated background check module, which can streamline the sharing of candidate data for companies that already use that HCM.
What types of background screening products are available?
There are many kinds of checks that employers can request using background check software, but common ones include criminal records checks, motor vehicle reports, employment verification, credit checks, and drug tests.
Criminal background check
Criminal records checks are a common screening service provided during the employment process. These searches involve reviewing federal, state, and local records for a candidate’s past criminal convictions, both felonies, and misdemeanors, as well as active criminal cases that the candidate is named in. Some providers include global criminal record searches as part of their services.
Driving records check or motor vehicle report (MVR)
Reviews of a person’s driving record, sometimes known as motor vehicle record (MVR) screenings, locate information about a person’s driving history. This includes the status and class of their driver’s license and any past violations, going back a certain number of years. These checks are common for roles in which someone operates a vehicle as part of their job responsibilities.
Employment verification
Employment verification involves confirming a candidate’s employment history, including past places of employment, the dates they were employed, and their job responsibilities. Verifying these credentials helps companies ensure that they are hiring someone with the necessary experience for the role. Many providers also offer reference checking.
Education verification
Employers typically want to confirm that a candidate has the required education, qualifications, and training to succeed in the role. Background check solutions often include an option to verify a candidate’s education credentials, such as college degrees, certificates, licenses, or other specialized training.
Credit checks
Checking a candidate’s credit history can help companies assess the integrity and financial responsibility of candidates, especially for candidates who may be dealing with a company’s finances as part of their job roles. Hiring managers should be aware that some states have laws restricting the use of credit checks in employment.
Drug screening
Background check companies that provide drug testing in the United States are certified third-party administrators (TPA) of the Substance Abuse Program Administrators Association (SAPAA). SAPAA’s national standards are recognized as the seal of excellence for the substance abuse testing and program management industry. Some industries require drug testing for all applicants to reduce the risk of accidents.
Industry-specific checks
Some background check companies might specialize in certain industries, while others provide general screening reports for a variety of industries and positions. Industries that might have specialized screening needs include construction, commercial and tribal gaming, education, finance, government, health care, hospitality, manufacturing, staffing, and transportation.
Common features of background screening software include administrative dashboards, candidate portals, analytics and reporting tools, and automated workflows.
Dashboards: A key part of any background check software is a dashboard that provides an overview of any active checks and real-time status updates on each candidate. These dashboards allow administrators to track the progress of each pre-employment screening and view an estimate of how long it will take for each report to be completed.
Candidate portal: Platforms with candidate-facing portals enable candidates to enter information about themselves through a web interface to help speed up the process. These self-service portals also typically show candidates the status of their background check and may also send notifications or reminders, which improves the overall candidate experience.
Automated workflows: Automation has become a growing part of many software products. For example, when an employer orders a background check, the system might automatically send a notification to the candidate, asking them to fill out documents to initiate the process. That paperwork can then be routed to the appropriate personnel for review. Companies can also develop custom workflows so that completed background checks are routed to the proper personnel for approvals or decisions.
ATS integrations: Most pre-employment screening platforms integrate with at least one applicant tracking system (ATS). ATS integrations facilitate the seamless transfer of data about candidates between the systems, which saves hiring managers the time it would take to move the data from one system to another and also reduces the potential for data entry errors. Many platforms offer an API to facilitate integrations with third-party software products. Integrating these systems also makes it easy for hiring managers to start a new background check with a few clicks.
Analytics and reporting: In addition to dashboards showing up-to-the-minute status updates for current background screenings, many platforms include analytics capabilities that facilitate a more in-depth look at background check data. These reporting tools can reveal trends in an organization’s processes, such as how long checks are taking on average, or whether completion times vary depending on location—since laws vary from state to state—or at different times of the year. They may also reveal trends in the decisions made by hiring teams, enabling companies to adjust their processes as needed. Identifying these trends can help companies identify ways to speed up the process or reach greater numbers of candidates.
Compliance tools: Automated compliance checks help administrators determine which laws and regulations apply to their pre-employment screening process. While all checks in the United States must comply with the Fair Credit Reporting Act (FCRA) and guidelines from the Equal Employment Opportunity Commission (EEOC), other laws or regulations can vary depending on where the company is located. The software can monitor compliance regulations and make sure to generate the proper forms, disclosures, and authorizations to send to candidates. At a minimum, a platform should be FCRA compliant and also adhere to the latest EEOC regulations.
Speed up time-to-hire: In competitive recruiting environments, completing the hiring process promptly can mean the difference between adding a stellar new hire or losing out on that person to another company. As a result, reducing the turnaround time for a candidate screening is important, and faster checks offer companies a competitive advantage. Employment background check software automates the process of verifying the information candidates provide during the talent acquisition process. Many background check vendors are also increasingly relying on artificial intelligence to comb through big datasets for pertinent records to speed up the process. This reduces the time that the company needs to spend on authenticating information, freeing up time for other hiring and onboarding processes.
Maintain compliance: Employee background checks are highly regulated processes, bound by local and federal regulations, and it is important for employers to maintain compliance with these rules to avoid legal problems. But keeping track of those regulations and ensuring they are closely followed can be challenging without help. Background screening solutions provide businesses with access to up-to-date compliance knowledge, which can lower the likelihood of regulatory violations and lawsuits. The best background check services will ensure that their clients are in compliance throughout the entire process. These systems can also maintain records to prove compliance later if necessary.
Increase confidence in hiring decisions: A bad hire can cost a company thousands of dollars in recruiting expenses, productivity losses, team morale declines, and legal fees. A pre-employment background check can help the hiring team have confidence that the person they are hiring is trustworthy and won’t pose a risk to the company or its employees. Employers use background checks to verify the accuracy of the information a candidate presented during the hiring process, including that they have the qualifications required to do the job well. Employment screenings can also uncover information about a person’s history that could present workplace safety or liability risks, such as a poor driving record or a history of criminal violence.
Improve the candidate experience: Many products provide online background check services and cloud-based dashboards so that both the applicant and the human resources professional charged with overseeing the process can check on the progress of employee background checks. Giving candidates this information improves communication during the recruiting process, which can leave candidates with a more positive impression of the company and build trust. In turn, good recruiting experiences can positively impact the company’s brand and lead to greater recruiting success.
Recruiters: Members of a hiring team are the most frequent users of pre-employment screening tools. This includes in-house recruiters at businesses as well as recruiters who work for recruiting agencies or staffing firms. Recruiters use background check platforms to initiate screenings, monitor the status, and view analytics reports about the process.
Compliance team: Employees who are responsible for maintaining a company’s compliance use background check software to ensure that the company’s employment screening processes adhere to all applicable regulations. This could include federal, state, and local laws, as well as internal company policies. A company’s attorneys may also need to access the software’s records in the event of legal issues.
Job candidates: Many background check solutions come with candidate-facing portals, which enable job seekers to monitor the status of a screening that their prospective employer is conducting. These portals often include status dashboards and may also have the ability to send notifications or messages at different stages of the process.
Related solutions that can be used together with employment background check software include:
Applicant tracking systems (ATS): Most background screening platforms integrate with at least one ATS. These integrations facilitate the seamless transfer of data as candidates move through the hiring pipeline, which can speed up the process and reduce errors. It also enables recruiters to order background checks and view candidate information from the same screen, improving hiring workflows.
Core HR software: Background check solutions also integrate with core HR software or HRMS & HCM software, both of which contain employee documents and data. Connections between these systems streamline the transfer and sharing of employee data, both during the talent acquisition process as well as once the candidate is hired.
Background check solutions can come with their own set of challenges.
Compliance: One of the biggest reasons companies use employment screening services is also one that can cause difficulties — the provider’s ability to help companies maintain compliance. The various laws and regulations that govern background checks must be followed to avoid fines, lawsuits, and other issues. However, companies ordering the screening typically rely on the background check provider to ensure they are following the proper procedures and are current on the latest requirements. Platforms that lack strong compliance capabilities could open up employers to legal troubles, especially in the case of adverse actions, which refers to an employment decision that negatively impacts a candidate due to information that appeared on a background check. Buyers of background check services should make sure to ask software providers how they ensure that their platform incorporates the latest compliance regulations.
Timeliness: Speed matters when it comes to recruiting, but background checks can sometimes be a bottleneck in the process if the results are not returned on time. The time that a background check takes can vary, depending on the number of screens the employer orders and how easy it is to access the information. Background check companies that take too long to return results could hurt a company’s recruiting efforts, as strong candidates might look elsewhere. Platforms that offer unrealistic estimates for when a screening will come in can also cause issues in the process.
Accuracy of information: A key reason employers run background checks is to confirm the accuracy of the information that the candidate included during the process, so the reliability of the information contained in reports is critical. Background screenings that turn up inaccurate information about a candidate or fail to uncover important details about the candidate’s background can cause serious issues for both the employer and the candidate. Companies should have confidence that the pre-employment screening tools have systems in place to confirm the accuracy of the information that the platform produces.
Nearly every industry can benefit from implementing background check software into their hiring process. But some industries, in particular, are particularly reliant on these solutions.
Construction: The construction industry uses background check services to maintain workplace safety and ensure that its workers have the required licenses and skills to do the job.
Retail and hospitality: Industries in which turnover rates are higher, such as retail and hospitality, require that employers can quickly conduct background checks to ensure they are fully staffed, especially during peak seasons.
Healthcare: For healthcare roles, especially those that require direct contact with patients, employers must verify the backgrounds of employees to ensure they have the required licenses and certifications. Background check software helps businesses monitor compliance regulations in this heavily regulated industry.
Nonprofits: Volunteer organizations use background screenings to identify whether there is anything in a prospective volunteer’s past that could make them a poor fit for working with the organization’s clients, and even expose the nonprofit to lawsuits or bad press.
Staffing: Because they deal with a high volume of candidates, staffing agencies rely on background check tools to efficiently screen clients and place them in jobs faster.
When gathering requirements for software, buyers should consider the kinds of employment screenings that the company is likely to use most often. Different background check providers may offer various screening types, so companies should know upfront which pre-employment screening products their ideal provider must have. Companies should also consider which other features are important to them in a background check solution, such as dashboards, notifications, and candidate portals. Since there are different approaches to completing background screenings, buyers should also think about whether they are comfortable with computers and algorithms doing much of the searching, or if they would prefer for humans to be doing more of that work.
Create a long list
An initial list of potential background screening services should include any products that meet the company’s basic requirements. At this point, buyers should be aiming to get a sense of the features of potential solutions and the kinds of services they can provide.
Create a short list
After a long list has been created, it’s time to look at each product in more detail to determine if it will meet the company’s needs and deserves to be put on their short list. This should include evaluating additional features of each product beyond the ones identified as essential to determine if that additional functionality would bring additional benefits to the company’s recruiting process.
Conduct demos
By the time the company is ready to conduct demos, buyers should have a sense of the features that products on the short list offer and be ready to evaluate how effectively those features meet the organization’s needs. Sellers should walk buyers through how the company conducts the background check from beginning to end. Buyers should consider the user interface of the platform and whether the information on sample reports is easy to access and understand. Demos are also a good time to ask questions about how long screenings take on average, how the company maintains compliance with laws and regulations, and how well the software integrates with the buyer’s existing systems.
Choose a selection team
The selection team should include any stakeholders who might be using the product, including a company’s recruiting team and any other relevant HR personnel.
Negotiation
After narrowing in on a preferred product, it’s time to negotiate a pricing package. Buyers must consider the pricing model of the software, including whether the software comes with a monthly or annual fee and how much different types of screens cost. Buyers can sometimes negotiate discounts if they buy a package that contains a larger number of screens. Pricing can also vary by how thorough each search is and how long it takes to complete.
Final decision
HR leaders are likely to make the final decision on which platform to use since a background check vendor will have a key role in protecting the company’s reputation and reducing its legal risk.
The cost of a background check typically varies by how many different screenings it includes and which screenings are being done. A basic screening might cost as little as $10 per report, while more complicated screenings that include searching court records, sex offender databases, credit reports, and other data sources could cost $100 or more per report.
Buyers should consider whether their background check provider is giving them confidence in their hiring decisions while also providing efficient services at a competitive price. Analyzing whether the company’s time-to-hire is improved after implementing the software can be a key way to evaluate the ROI of the system.
How is Background Check Software Implemented?
Many modern background check systems are cloud-based, so implementation often involves setting up user accounts and having users log into a portal through a web browser.
Who is Responsible for Background Check Software Implementation?
Recruiters and other HR personnel are the most likely users of background check software and are likely to be the ones leading the implementation, with assistance from IT staff.
What Does the Implementation Process Look Like for Background Check Software?
The background check vendor will likely create user accounts during implementation and ensure each user can log into the system. Training should be provided to walk buyers through the capabilities of the software and general workflows. Companies will also need to work with the background check provider to integrate their existing applicant tracking system or core HR software into the new platform.
When Should You Implement Background Check Software?
Employment background check software can be implemented at any time. For companies in industries that see large seasonal fluctuations in hiring volume, it would be prudent to implement the system well in advance of their peak hiring season to ensure hiring teams are well trained before they need to handle a large volume of candidates.
Artificial intelligence
Much as artificial intelligence and machine learning are impacting other HR software markets, AI has become a part of a growing number of background screening solutions. Companies use AI to assist with searching massive datasets, such as national criminal databases, for information that could be relevant to a candidate screening. AI can greatly reduce the time it takes to search these large datasets and reduce the costs involved with hiring. However, some candidates whose public records have been checked using AI-powered background check tools have complained that the systems make mistakes, such as wrongly linking them to a different person with a criminal history.