Inflation in the Background Screening Industry

By Julie Henderson

You can’t turn on the news without hearing about inflation. According to the U.S. Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers increased by 9.1% from June 2021 to June 2022. This is the largest increase in 40 years. 

Price increases affect everything we buy, and it isn’t limited to our personal spending. Companies are seeing dramatic across-the-board increases in goods and services necessary to run a business. 

Higher prices negatively affect organizations in a variety of ways, including:

• Chipping away at their buying power
• Hindering the ability to scale
• Making it difficult to implement technology and other investments that pay off long-term
• Eroding profits

Rising prices impact a company’s hiring and background screening endeavors. Bringing on new hires costs more than it did just last year. The increased wages of employees involved in the hiring process and the increased cost of the background check products needed to screen the applicants add up to a steeper cost-to-hire with every new team member. 

With rising prices, HR must get creative in their hiring processes. 

Here are three ways organizations can pivot with their background screening practices and save money without sacrificing the quality or accuracy of their background checks. 

Operational Optimizations

The first way to mitigate the effect of rising prices is to put your operational processes under a magnifying glass. Is any part of it wasteful, redundant, or unnecessary? Remove, reduce, or redo them. 

Using a progressive screening approach is one way of reducing total background screening costs.

What Is Progressive Screening?

HR professionals trying to fill open positions often have at least one hard-and-fast requirement for job candidates. Perhaps it’s a degree, a certain number of years’ worth of experience, or a clean driving record. The premise of progressive screening is to use these requirements to the employer’s advantage during the background screening process by screening for those attributes first.

How Does Progressive Screening Work?

HR pros work closely with their background screening partner to identify must-have requirements in the background screening process. The background screening vendor then screens for those requirements first. If the job candidate doesn’t offer those requirements, they are eliminated from the job search. 

For example, a logistics company is hiring for a position that a valid CDL license and a good driving record. There are 3 viable candidates. The company’s background screening provider runs a motor vehicle records search for each candidate. The results show that 1 of them has let their license expire and 1 other one has multiple moving violations.

With those 2 ruled out, the company avoids paying for full background checks on them. 

Over time, decreasing the full background checks on candidates who aren’t qualified adds up to big savings. 

Progressive screening gives employers a way to eliminate unqualified candidates earlier in the process. By spending less on each candidate’s background check, companies save money and focus their resources on viable candidates. 

Consumer Permissioned Data

The prevalence of big data has made it possible to use consumer permissioned data to accomplish objectives that weren’t possible in the past. 

What Is Consumer Permissioned Data?

Equifax defines consumer permissioned data as “transactional and account-level information that a consumer gives a business permission to access on their behalf. In return, consumer-permissioned data empowers individuals to leverage their financial data to apply for loans and other services.” 

How Does Consumer Permissioned Data Save Money on a Background Check?

Data that consumers generate online is housed digitally, making it easy (and cost-effective) for employers to use it in their background checks. 

A good example is The Work Number, which is a place employers can (for a fee) receive employment information on their candidates. If your background screening vendor receives permission from your job candidates, they can access employment records directly from the applicant’s payroll provider. This practice is not only more cost-effective than using The Work Number, but it’s also typically faster, and just as accurate. 

Background screening vendors can also use the consumer’s permission to access educational information to verify their dates of attendance, majors, and degrees earned. 

Using consumer permissioned data for screening your job candidates is a new but effective practice that we expect to gain popularity. By acquiring a candidate’s authorization, your background screening vendor can often skip the “middleman” that drives up costs. This practice can successfully counterbalance the impact inflation has had on prices. 

Instant Oral Drug Tests

Drug screening is a commonplace part of an organization’s background check process. After all, having a drug-abusing employee on the payroll can cause lots of trouble and be expensive for a company. 

A cost-effective way to screen job candidates is with instant oral tests. 

Why Choose Instant Oral Testing?

Lab-based drug screening can be expensive. Multiply each test by the number of applicants in a year, and you’ll undoubtedly have a large sum tied up in drug screening costs. 

Using an instant oral testing product is a fraction of the cost of lab-based drug tests. Another advantage to instant screening products is they’re quick. You’ll have an answer in minutes, unlike the days it takes to get off-site drug test results returned. Instant oral testing is especially helpful when HR is trying to fill a position quickly, or the candidate is entertaining multiple offers.

How Are Instant Oral Drug Tests Used?

Employers who aren’t required to use lab-based drug screening (such as DOT-approved companies) can substitute an instant on-site drug test for previous off-site drug testing. Simply purchase the tests in advance from your background screening partner, assign an employee to administer the tests, and closely follow the instructions to maintain accuracy. 

Today’s inflation is putting pressure on HR to find ways of holding background screening costs down. Getting creative and analyzing your current operational processes are the first steps. By cutting out waste and finding new ways of getting accurate, timely results without negatively impacting the integrity of your candidate screening process, you can keep your background screening costs in line.