How Outsourcing Background Checks Provides Increased Security

Though the practice has become standard, some employees might still feel a twinge of apprehension when they sign an approval to have their background screening performed by a third-party firm.

The Fair Credit Reporting Act requires businesses to inform employees and gain their written consent when conducting background checks through a third party, not because the third party is a risk in and of itself, but because these notices and authorizations provide safeguards for businesses and individuals. In fact, these third-party firms only increase the likelihood that all business transactions in the employment screening process will be performed with integrity and without bias.

Two main factors play into the decision regarding whether or not to outsource employee background screenings to a third party: time and money.

1. Using a third party to conduct employee background checks provides efficiency. Larger companies that deal with numerous employees, particularly corporations that have employees in different parts of the world, simply don’t have the exorbitant amount of time required to screen every one of them in-house.

The perceived risk: Third parties gain access to employees’ confidential information, creating a larger risk for that information to be compromised. However, some sources argue that third parties have more skill in reliability when dealing with sensitive information because the companies specialize in the sole process of screening employees. Additionally, as many components considered during a background check are a matter of public record, employees should rest assured that only information dictated by the Fair Credit Reporting Act will be investigated, and this law is especially strict in regards to third-party companies who perform the checks themselves.

2. Smaller companies might opt to perform their own background checks to save money. Because third-party organizations that provide background screenings generally charge a fee to screen each employee, companies with the time to conduct their own background checks save money.

The perceived risk: In performing their own background checks, some companies may attempt to circumnavigate the FCRA (Fair Credit Reporting Act) by failing to notify employees that their information is being sent to a third party, because the business conducts the screening itself. Companies who perform their own background checks run the risk of a perceived bias when selecting candidates for hire, because they do not employ an objective third party to conduct the background checks. Companies who conduct their own employee screenings also sacrifice valuable man hours that could be geared toward general business instead of human resources.

Surprisingly, though a third-party organization does gain access to personal information during the course of a contracted background check, the threat of compromised identity does not seem to be as big of an issue as one might think with all of the technological advances of the last 10 years. The safety of employee information does not seem to lie in the use or non-use of a third-party background screening firm, but of use of the right firm that adheres to Fair Credit Reporting Act.

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