January 8th, 2018 | Debbie Lamb, Sterling Talent Solutions

Four Background Screening Industry Trends for 2018

2017 was a busy year for the human capital management industry. Compliance laws, such as ban the box and pay salary bans laws were being enacted in cities and states across the U.S. and HR technology continued to be developed to enhance the background screening industry. We wanted to take a look into our crystal ball to see what 2018 holds for the human capital management and background screening industries. Below are just a few of the trends to keep your eye on for 2018:

Regulation and Compliance Continue to Change

It’s important to point out that compliance will always play a significant role in the background screening industry. 2017 brought about many changes in employment laws that impact the hiring process. From ban the box to salary history bans to more states legalizing the recreational and medicinal use of marijuana, it was a busy year and 2018 looks to be just as busy.

As President Trump’s legislative agenda continues to be debated and laws modified, employers need to keep a close watch on the reaction of the states to the administration’s federal employment law decisions in the coming year. The changes made at Federal regulatory agencies like the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) will result in a new era of enforcement with the full effect yet to be determined.

State and local legislation will continue to be big issues in screening in the next year. Issues such as salary history ban laws and ban the box laws will continue to gain in popularity. In 2017, there was an increase in salary history ban legislation in cities and states across the country. There will be more of these laws introduced in cities, municipalities and states in the next year. Ban the box laws have been sweeping the country for the last few years. The newest ban the box law went into effect in California on January 1, 2018. The California law, which involves both the public and private sectors, states that employers cannot make a criminal history inquiry until after a conditional offer has been made to an applicant. State and City ban the box legislation will continue to pass in the new year.

The prescription pills and opioid crisis has become a growing concern throughout the country. The non-medical use of prescription psychotherapeutic drugs –and of pain relievers in particular –is now second only to marijuana use among the nation’s most prevalent drugs of choice. The Department of Transportation has added a panel of 4 synthetic drugs to their drug testing requirements as of January 1, 2018. There could be more changes to requirements to come in the new year. Marijuana testing will continue to be in the news with the legalization of medical or recreational use in 29 states.

Smart Technology for Background Screening

Mobile is Key

New technology is continuously being developed to improve the candidate and HR professional’s experience. There will be a larger focus on developing mobile responsive portals and apps to enhance the candidate application and background screening experience. Mobile isn’t just about the device. It is about being immediate and always-on and the hiring process should be too. A mobile-responsive candidate portal enables a seamless, efficient candidate background screening experience no matter what mobile devices your candidates use.

Growth of Artificial Intelligence Technology

Artificial Intelligence (AI) and its wide-ranging capabilities will have a growing impact on the HR industry. New tools and programs will help HR professionals and teams with the hiring process, including background checks, employee performance management, rewards/recognition and ultimately company culture.  According to Inc.com, “Artificial intelligence is transforming the background check process – making it faster, more accurate, and more efficient.” AI will help HR professionals target the relevant data insights they need to make the best hiring decisions for their companies quickly and efficiently. AI can also be helpful with global screening procedures by having the ability to quickly and easily process records in many languages from around the globe.

HRIS Integration

Overall, there will continue to be flexible integrations between background screening platforms and ATS systems. This is a big win for both employers who can eliminate a number of manual processes while streamlining their hiring workflows and for candidates who won’t have the burden of duplicate data entry. On the backend, integrations allow the background screening results to flow seamlessly to an employer’s HRIS system.

The On-Demand or Gig Economy

The US economy has changed dramatically over the last 50 years from stable employment in large organizations to an increased reliance on temporary or contracted labor (with an emphasis on service and tech industry jobs). While the manufacturing world has shrunk, the On-Demand workforce (or gig economy) has grown. Freelancers are relying on websites and apps like Handy, LinkedIn, Uber, Lyft and TaskRabbit to connect them with paying jobs. According to Forbes, “Talent sourcing practices need to build speed and agility in order to quickly identify work/projects in need of attention, source employees with the required skills, and staff project teams that can quickly perform the necessary task.” As new business models develop and evolve, we will see background screening technology adapt to serve on-demand services and sharing economy platform models.

Candidate Experience

As competition for high performing talent continues to increase, employers recognize that they have to step up their candidate experience and provide a consistent, simple and personalized experience for their applicants. Streamlining technology is at the forefront of this priority. Companies are looking for technology to elevate and differentiate the candidate experience from the abyss of other potential employers. This helps with the goal of onboarding hires quickly before they can go to another company, and not to mention, boosts company brand and reputation.

The candidate’s experience during the hiring process is a make-it or break-it situation. Employers identify that being transparent as well as efficient reflects well on your company culture while also implying care and appreciation for new employees. Candidate experience is the first piece in the puzzle of a new career, which subsequently affects retention and engagement rates, as well as referrals.

Committed to the Future

There are many changing regulations and technological trends that will impact the employment background screening industry. We will continue to keep you updated on the latest topics affecting the Human Capital Management industry and can’t wait to share them with you so stay close to Sterling Blog.

Sterling is not a law firm. This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.