The business of background checks

By Barry Boes, Accio Data

Firing up the Ferrari – Magnum, PI style – he'd head over to the courthouse where the staff would greet him by name before helping him go through rooms of file cabinets rooting around for dirt on your candidate. The particularly good characters were recognizable by the boxes of donuts entering the courthouse with them.

If he walked out of the courthouse without a fistful of evidence, he could always call his counterparts in other locations where the candidate had lived and ask them for a favor.

Today, popular TV would have you believe that all of that has changed. Want to check out a candidate? Scan his picture into the computer, connect to the FBI files, and wait half an hour.

But the reality is a complex mishmash of the two. Some courthouses have gone online and anyone can go to the library, pull up the public access terminal, and view a criminal resident-density-plot overlaying a Google map. Most courthouses, however, still require visits from the donut-toting man in shades.

This dichotomy has given rise to the fledgling industry of employment screening. Why do I call it a fledgling industry? Because this is an industry in which you can get more or less the same service from one of 1500 mom-and-pop businesses scattered around the country as you can from one of the four $100M+ "mega-firms".

Of course, all of this is changing, and like most of the world, the change is being driven by technology. At first, it was a couple of small firms stepping out on the edge and doing something different, such as when Informus, Inc, rolled out one of the first web-based employment screening platforms.

It didn't take long for the big guys to catch on. Choicepoint gobbled up Informus, using their technology to jumpstart their own online screening business while other major players did the same.

It’s a cutthroat industry, and for awhile there, it looked like the mega-firms might win. After all, when you need a million dollar software package to compete in the online screening business, how can midsize firms flourish and smaller firms survive?

But they can survive and flourish, and they do. I believe there are two significant reasons for this. First and foremost, many companies have found that smaller shops get the personal interaction end of the job done right. They're there to educate you on when you can rely on database searches or not, come up with a customized reference checking program, and interact with your HR staff to build a screening program that meets your needs. Maybe you just want to make sure you stay out of court. Maybe you're concerned about the quality of your work environment. Maybe you find a correlation between certain background characteristics and employee success in your environment.

The second thing that's helping the midsize operations survive is another fledgling industry: software suppliers to the employment screening industry. Characterized by small, innovative firms, they've filled a niche providing online ordering platforms, work flow management, automated ordering and results retrieval, billing, and other key features to smaller shops that keep them competitive with the mega-firms. In some cases, they can even get ahead of their competition. A $20M firm amortizing their new $2M screening application has more overhead than a $1M firm who's licensed a similar product.

Does your screening firm combine world-class technology with world-class customer support? If not, you should check out the new breed of midsized race horses.

Barry Boes is the president of Accio Data, the leading provider of technology solutions to the screening industry. Barry has provided the industry with innovative technologies for more than 10 years including the introduction of the world's first full-service browser based screening solution. Prior to working in the screening industry, Barry managed technology R&D for Cypress Semiconductor.