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September 2010
Mollie Lombardi
~ Underwritten, in Part, by ~
September, 2010
80% 74%
70% √ Percentage of new-hires that
60% 51% were the top-choice
50% candidate
40%
√ Average year-over-year
30% decrease in time-to-fill
20% vacant positions
10%
0%
Employment screening Recruitment (i.e. Assessment (i.e. skill
(i.e. background checks, applicant tracking, hiring assessments, behavioral
drug screening) management) assessments, gap
analysis tools)
Background screening is a critical part of the hiring process for the majority
of organizations today, but it is even more essential in the current economy
for several reasons. Aberdeen’s research into the pressures impacting
organization’s hiring activities has revealed that a shortage of key skills is the
number one challenge, cited by 47% of organizations. This may seem
counter-intuitive at first given the news of continued high levels of
unemployment and a “jobless” economic recovery. However, Aberdeen’s
Fast Facts
data, coupled with many conversations with end-user organizations,
regarding this finding has revealed that finding the right talent - the talent √ Companies using
with the right mix of skills, behaviors and values to fit with the organization employment background
- is still a tall order. In fact, more applicants in the pool makes filtering and screening are 43% more
screening even more critical to ensure that time isn’t wasted on candidates likely to achieve Best-in-
Class results than those that
who aren’t a good fit or who might not be qualified for the position.
are not
In addition, competition among organizations for candidates with desired
skills remains fierce - a challenge cited by 34% of organizations. Because of
this, organizations need to ensure that the experience a candidate has in the
hiring process is a positive one in order to increase the likelihood of getting
to an accepted job offer. As a nearly ubiquitous step in the hiring process
for many companies, background screening can have a big impact on helping
to filter out miss-matched candidates and making sure the hiring process
runs as smoothly as possible. Done right, the use of background screening
has also shown an impact on overall quality of hire (the top metric
organizations are using to measure talent acquisition effectiveness); with an
average increase in that critical metric of 7% year-over-year for
organizations using screening, as compared to a 5% average increase among
those that do not use screening solutions.
What’s in a Screen?
So what is background screening exactly? Figure 2 highlights the most
common aspects of an employment screening solution.
87%
organizations using
72% screening, as compared to a
75%
60% 57% 5% average increase among
those that do not use
50%
screening solutions
25%
0%
Domestic Previous Ref erence Drug I-9 verif ication
criminal employment / checking screening (U.S. only)
background education
checks verif ication
Source: Aberdeen Group, September 2010
The need for background checking is key when it comes to managing the
risk inherent in hiring. Even the most seemingly ideal candidate can have
issues unearthed via a background check that may make them ineligible (or "Criminal background checks
undesirable) for hiring. And in today’s ultra-competitive environment, and drug tests are very
prospective employees may be more inclined to stretch the truth about important to us as we are a
highly secured company and
their educational backgrounds or previous employers and organizations
have strict requirements for
must protect themselves and their other employees and customers. hiring. Automating this process
Particularly in certain environments, these two elements are even more has saved us time."
critical. Table 1 shows that in financial services, healthcare, and public sector
verticals, these top two background screening elements are even more ~ Maureen McCormick, SPHR,
important. CBP, CCP, Manager of
Compensation & Benefits, PJM
Interconnection
Table 1: Prevalence of Background and Employer Verification
Criminal Background Employment /
Check Education Verification
Financial Services 93% 97%
Healthcare 94% 94%
Public Sector 100% 83%
Source: Aberdeen Group, September 2010
7%
6%
5% 5%
5%
4%
3%
2%
1%
0%
Using all three elements of Screening with NONE of Not using screening
screening the top three
Source: Aberdeen Group, September 2010
© 2010 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
Employment Screening: Mitigating Risk, Driving Down Cost
Page 4
8.0%
8.0% 7.2%
6.0%
4.0%
2.0%
0.2%
0.0%
-0.2%
-2.0% -1.3%
-4.0% -2.8%
-3.4%
-6.0% -4.5%
Change in quality of hire Change in time to fill Change in cost per hire
Integrating background screening into the hiring workflow within an ATS Fast Facts
improves the quality of the candidates coming thorough the door, improves √ Organizations with full
the efficiency of the hiring process by reducing time and cost to fill, and integration between their
improves satisfaction with the screening solution itself. Of organizations ATS and screening solution
with full integration between their ATS and their screening solution, 73% are 79% more likely to be
indicate that they are satisfied or extremely satisfied with their screening extremely satisfied with
solution. And those with full integration are 79% more likely to be their screening solution than
those without any
extremely satisfied with their screening solution than those without any
integration.
integration (34% vs. 19%). For those with full or partial integration, 66%
indicate satisfaction with their screening solution, whereas only 55% of
those with no integration between the two indicate the same.
Given the importance and prevalence of background checking, if you have
an existing ATS or other hiring management system or technology that "Automating background
automates the hiring workflow, integrating this critical step can bring even screening is part of an overall
greater benefit. The ability to integrate should be a consideration when efficiency process within HR. In
implementing either an ATS or background screening solution. this way, all information of the
candidate stays in the same soft
file. If at one point, one of my
Speed, Accuracy, and Value colleagues wants to approach
When it comes to selecting a partner for providing background screening, this candidate, they already
the speed with which the process is completed and the accuracy of the have a lot of information
results are far and away the top criteria. Price and value are also always a available."
concern with a solution that organizations view as a “must have,” but in the ~ Nathalie Strynckx, Talent
overall recruiting process, time and accuracy are the most essential issues. Acquisition Manager, Levi
Strauss
60% 54%
50%
40%
30% 24%
20%
10% 10%
10%
0%
Turn-around Accuracy / hit Cost Ability to prove Integration with
time rate return on recruitment
investment technology
Source: Aberdeen Group, September 2010
Accuracy is important on two fronts. One is for the company, which needs
to protect itself from any liability of hiring someone who does not meet
their qualifications, as well as protect itself from denying employment to
someone on the basis of their background check incorrectly. If a screen
comes back with inaccurate information on a candidate and employment is
denied, there can be risk associated as well. The other important front is for
a candidate if inaccurate information shows up on their background check.
When this kind of “false positive” is indicated, a good candidate may be lost
in the time and frustration invested in clearing up bad information. Accuracy
of the data coming from the screening vendor can have a big impact on both
parties in the job offer process.
Also, given the shortages of key skills noted earlier in this report, anything
an organization can do to make it easier to do business with from a
candidate perspective is important. Candidate relationship management
practices, such as maintaining engaging job portals, using candidate
relationship management tools to track communications, and having
recruiters actively maintain contact with past applicants, are all showing up
as key strategies for Best-in-Class companies in talent acquisition, and this
attention to the experience needs to continue after an offer has been
extended. Making the background check as smooth and painless for the
candidate as possible and ensuring that an incomplete background check
doesn’t stand in the way of an eager new employee from starting work is an
important factor.
Finally, just like in all aspects of business today, organizations need to manage
the costs of background screening, but for many the value of the screen helps
to balance that cost. The actual dollar spend is important, but if a screen can
be executed quickly and accurately, and help to make a hiring decision that
results in someone who performs better and doesn’t need to be replaced
right away the value of the process helps temper the focus on cost.
© 2010 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
Employment Screening: Mitigating Risk, Driving Down Cost
Page 7
Key Insights
Organizations have a lot to consider when it comes to making the right
hiring decision. The competition for key skills is fierce, and competition in
the business marketplace is fierce as well, making it essential that companies
have the right staff in the right place at the right time to serve their
customers. There are a myriad of strategic questions, as well as tactical
issues involved in finding, hiring, and bringing on board the talent that’s best
for an organization. But the background screening process is an important
stage-gate for more and more organizations today for multiple reasons.
Companies must be able to mitigate their risk and legal exposure on a
compliance front, but they also need to execute in a way that is efficient and
that improves the outcome of the process.
The use of background screening has been shown to not only be a key
enabler of Best-in-Class talent acquisition, but also to help improve the
process even more dramatically when it’s integrated closely with the rest of
the hiring process. Organizations not yet using a background screening
solution, or those using them as a stand-alone solution, should consider
these integration issues when evaluating their strategy. Those using just one
aspect of screening should look to integrate more aspects, including criminal
background checks, previous employment / education verification, and
reference checking, to make the most of their investment and further
improve what the Best-in-Class deem their most important measure of
talent acquisition effectiveness: quality of hire.
For more information on this or other research topics, please visit
www.aberdeen.com.
Related Research
Talent Acquisition Strategies: Candidate Onboarding: The First Line of
Experience and Relationship Engagement; February 2010
Management Come of Age!; August Integrated Talent Management: Improving
2010 Business Results through Visibility and
Talent Assessment Strategies: A Decision Alignment; December 2009
Guide for Organizational Performance;
March 2010
Author: Mollie Lombardi, Senior Research Analyst, Human Capital Management
(mollie.lombardi@aberdeen.com)
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