Proper vetting at the point of employment is the most effective way in which companies can reduce their overall risk and liability. Without background checks, organizations run the risk of crime, financial loss, and workplace violence. According to a 2017 national survey by NAPBS, more than 95% of companies in the United States perform some form of employment background screening.
However popular background checks might be, the industry is facing notable challenges. The biggest headwind is a trend to place restrictions on the use of criminal background checks for employers and landlords. Most legislation to date (referred to as fair chance hiring laws or ban-the-box) has focused on prohibiting organizations from requesting criminal history information from candidates at the onset of the hiring process. These ban-the-box laws effectively require employers to push the criminal background check downstream, such as after an interview or conditional job offer.
The number of states banning the box in one form or another has grown from just one in 2004 to thirty-six by 2020. According to National Employment Law Project (NELP), three-fourths of the US population lives in a jurisdiction that has banned the box. Some local governments have taken this further and passed laws banning the practice altogether for certain industries or within their jurisdictions. We are also seeing the adoption of fair-chance hiring laws by many larger employers including Walmart, Target, and Home Depot among others.
This is a trend that is pointing to criminal records becoming a protected characteristic, not unlike race or religion.
Beyond ban-the-box laws, the industry is facing additional large-scale changes, such as an increase in the gig economy and on-demand workers, the Millennial generation (that has grown up on social media) poised to overtake Baby Boomers as the predominant workforce, and finally a worker supply shortage -- it adds up to tremendous challenges facing an industry meant to help employers mitigate their risk.
Organizations and more importantly, the background screening industry, will have to create new and innovative ways to overcome these challenges. Existing risk mitigation strategies such as reference checks, credit checks, and education verification can help fill the void, however, none of these can assess candidate risk more rapidly and thoroughly than Social Media Background Checks. A social media screen can provide key insight into a candidate’s character – something criminal background checks fail to surface. In addition, a social media check can uncover violent tendencies, political extremism, hate speech, mental wellbeing, and more about the individual. Lastly, the application of Artificial Intelligence is driving down the cost of what was traditionally a very expensive background check due to the amount of human analysis required. This allows the organization to perform social media checks further upstream to weed out undesirable candidates.
In summary, the background screening industry needs to adapt to a rapidly changing environment including reduced reliance on criminal background checks. However, employers still have the primary duty to reduce risk to their employees and brand while creating a culture that fosters productivity and inclusivity. It must also choose a risk mitigation strategy at the point of hire that reflects the demographic makeup of the primary workforce, which is quickly becoming a generation that has lived a large portion of their lives on social media.