By MARCI ALPERT
Theft, violence, deception. The consequence of a bad hire can be disaster.
Workplace violence now costs businesses $4.3 billion annually, according to the National Safe Workplace Institute. To reduce the risk of violence, theft, and other personnel problems, many companies are turning to background investigation firms for pre-employment screening.
In the past, background investigations were used only for those applicants in highly sensitive industries such as child care or law enforcement. Today, pre-employment background investigations are commonplace in many industries, and with the growing demand for information provided by investigators, the competition is increasing.
How can you tell which background investigation firm is right for you? I decided to do some of my own investigating. Using the law firm where I am human resources manager as a potential client, I compared the services of three background investigation companies in the Los Angeles area, examining quality, turnaround time and price.
The companies I investigated were InfoLink Screening Services Inc., Confidential Management Services Inc. (CMS), and ChoicePoint Inc. For each of these companies, I spoke with a sales representative and read their sales literature.
First I looked at quality. The Fair Credit Reporting Act (FCRA) has clearly influenced the practices of background investigation firms. My first concern was that the firm understood and complied with the law and that its knowledge of the FCRA was evident in both its sales personnel and written materials.
To comply with the FCRA, investigators must use the most up-to-date resources to conduct their searches. This is particularly important in the criminal history search, which is part of the basic package suggested by all three companies.
To do the criminal history search, InfoLink and ChoicePoint send their own employees to court to do the research firsthand. CMS, however, uses a database search from its office to match the name with a criminal record. If the name matches a criminal record, employees will go to the courthouse to do further research.
Because CMS’s database only uses the name as identification (a serious problem because of common names), it has to verify its searches by matching a name with a date of birth. A problem can occur with this method when the database is not updated regularly. A recent arrest may not show up on the initial search of an applicant.
Two other reports suggested by both InfoLink and CMS include a Social Security trace and a Department of Motor Vehicles trace. A Social Security trace is accessed from a credit bureau and is used to match the name of the applicant with his or her Social Security number, basically confirming that the applicant is who he says he is. A DMV trace provides useful information about a person’s character by looking at his or her driving record.
InfoLink offers a fourth report at no charge as part of its basic search package. Called Prior Employer Tracking, this report may provide insight into past employers that the individual failed to list on his application a red flag about the integrity of that individual.
In addition to the criminal investigation, ChoicePoint offers a five-year employment history as part of its basic package. Others offer employment history searches if requested by the client.
All of the companies had a turnaround time of one week or less. CMS offered a 24-hour verbal turnaround if the authorization for the search was received by noon. However, the information would not be complete if there was a “hit” in the criminal investigation that required further research at the courthouse. InfoLink offers a turnaround time of one to three days. Because the five-year employment history can be labor intensive, ChoicePoint’s turnaround time is five working days.
InfoLink was the bargain of the three companies. For $24.80, its basic search package includes a criminal search, a Social Security verification I.D. trace, a Motor Vehicle report and prior employer tracking. Additional charges of $2 by the DMV and $5 by the Los Angeles Municipal Court would bring the total to $31.80. InfoLink suggested adding on education verification for $11.80, and past employment reference checks at $11.80 per reference. If one of each were added to the basic package, the total cost would be $55.40.
CMS offers a similar package. For $130, it includes a statewide criminal conviction history, a Social Security trace, and a Motor Vehicle report. More charges can be added when CMS gets a possible hit when researching the criminal conviction history. If a name matches a crime, it must do further research to confirm it is the same individual in question. The cost to do research at the court is $60 per hour and 40 cents per mile. CMS also suggests adding on an education and employment background check for $100.
With less than 10 new hires per year at my firm, we would not be eligible to become a regular client at ChoicePoint, which requires a minimum of 50 searches per year. As an alternative, ChoicePoint officials suggested a pre-paid option that is $225 for three individuals, or $73.67 each. While there isn’t an expiration date for the package, ChoicePoint officials prefer that it is used within three months.
The pre-paid option includes a statewide felony/misdemeanor record check (at present resident address), and the five-year employment history. A Motor Vehicle search is an add-on to this package for $75, or $25 for each person.
InfoLink was willing to work with law firms, while ChoicePoint was reluctant.
Marci Alpert is the human resources manager for Sulmeyer, Kupetz, Baumann and Rothman, a Los Angeles law firm.
Entrepreneur’s Notebook is a regular column contributed by EC2, The Annenberg Incubator Project, a center for multimedia and electronic communications at the University of Southern California. Contact James Klein at (213) 743-1759 with feedback and topic suggestions.
