With the US economy holding strong and the national unemployment rate steadily decreasing, many companies see 2017 as a promising year for growing their business. The Bureau of Labor Statistics predicts that 88 percent of all US occupations will experience growth by 2020, which means more companies are hiring in order to scale their businesses. But we all know there’s nothing simple about adding a new employee to the payroll. The hiring process is fraught with the challenges of supply and demand, and the background screening process is faced with ongoing changes. In this post, we explore five background screening trends that will impact hiring in 2017.
Ban the Box in 2017
As of December 2016, 24 states and over 150 cities and counties across the nation have adopted Ban the Box policies. The movement that sparked the widespread adoption of this rule is focused on decreasing discrimination and recidivism, while improving the economic and social conditions of regions with higher crime rates. Almost certainly, it is only a matter of time before Ban the Box legislation prevails nationwide, which means employers must stay aware of policy changes in their local area. The legislation and rules, sometimes known as the Fair Chance Act, generally prevents employers from asking about criminal history until they’ve considered the candidate’s experiences and skills first. In some cases, asking about criminal offenses must wait until a conditional job offer is extended. Requesting background screening for criminal records can be interpreted as a violation of these restrictions. Accordingly, hiring managers will need to be aware of any Ban the Box restrictions affecting their hiring practices and the timing of requesting background screening.
The Growing Gig Economy
Independent workers currently make up roughly 27 percent of the labor market in the US, choosing the flexibility and perks of contract work over the traditional W-2 employment model. Dubbed the “gig economy,” studies suggest this workforce will double by 2020, with an estimated 7.6 million American workers. There are many advantages for companies that choose this employment alternative, but they must consider the implications in areas such as background screening. Just because these workers are temporary does not mean that the background check can be skipped. In fact, it is paramount to the safety, security and productivity of your organization, especially if contract employees have access to sensitive data or valuable assets; many of the risks illustrated in our infographic still exist. Although some companies, such as ridesharing organizations Uber and Lyft, have been using FBI fingerprinting for background checks, this method is inaccurate and incomplete and does not meet Fair Credit Reporting Act (FCRA) standards for maximum possible accuracy. Thus, companies must establish a strong internal screening policy, ideally consistent with Equal Employment Opportunity Commission (EEOC) guidance, and partner with a thorough background screening provider that can scale alongside the growing independent workforce.
The Importance of Candidate experience
As Millennials continue to flood the workplace and as technology advances at an ever-increasing pace, the candidate experience cannot be forgotten in the screening process. The interaction between candidate and company is a key influencer in employer brand, which in turn impacts recruitment success and turnover. This interaction must be consistent and engaging across all generations in the workplace and across all media (e.g., face-to-face, phone, email, Applicant Tracking Systems (ATS) and Customer Relationship Management (CRM) systems). Background screening and HR technologies are evolving to gain greater efficiencies for clients, but they must also consider the mobile experience and user-friendliness for candidates. The best background screening companies deliver a highly personalized level of service while pushing the cutting edge of technology.
Evolving Compliance and Regulation
Although every new administration approaches employment and consumer reporting agency (CRA) compliance slightly differently, it’s safe to assume that background screening will remain under stringent regulation, particularly in relation to the FCRA. How those laws are enforced and whether any rules will be repealed or newly enacted will be made clear after the new administration is more settled and established. Furthermore, it’s likely that the Federal Trade Commission and Consumer Finance Protection Bureau will continue to be focused on accuracy; employers should be alert to any changes that result from this focus.
Continued Increase in FCRA lawsuits
2016 was prolific for disclosure lawsuits and adverse action lawsuits, and this trend looks set to continue as employers fall prey to FCRA violations. Companies must be diligent in their background screening practices, ensuring proper authorization and disclosure processes before the background check is administered. Furthermore, employers must remain compliant when notifying candidates of adverse actions that result from the background check. When these seemingly simple criteria are neglected in the background screening process, companies are at great risk of legal action. Organizations with large applicant pools are particularly attractive targets for class-action lawsuits.
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