As Data Facts celebrates its 35th year in business, it’s a good time to reflect on the tremendous changes the background screening industry has seen since the late 80’s. From manual records and paper trails to today’s digital footprints and artificial intelligence (AI), the transformation has been amazing. Here are some highlights of these developments and how they shaped the industry.
Into the 1980s. The Need for Background Screening…Say What?
In the 1980s, the concept of professional background screening was relatively new and not widely accepted. Employers were unlikely to invest in formal background checks, relying on references, direct interviews, and gut feelings instead. Many businesses depended heavily on word-of-mouth recommendations and the trustworthiness of personal networks, and some just blindly rolled the dice on new hires. This approach, while simpler, lacked thoroughness and left room for inaccuracies and big risks in hiring decisions.
Late 1980s. Tedious, Manual Processes
Data Facts was founded in the late 80’s when the background screening industry was labor-intensive. Employers relied heavily on paper records, phone calls, and face-to-face interviews to verify the backgrounds of potential hires. Background checks often involved manually searching through public records, visiting courthouses, and contacting previous employers and educational institutions directly. Relying on physical documents created major concerns with data accuracy and integrity. Misfiling, losing documents, data errors, and delays were common, making the screening process cumbersome and less reliable.
Early 1990s. Cloud-Based Solutions via the Internet
The 1990s welcomed the internet and all the convenience (and headaches) it brought. Computerization and the integration of databases transformed the industry. Background screening companies began digitizing records and automating certain aspects of the screening process. This shift significantly reduced the time and effort required to conduct background checks. However, some background screening companies were slow to invest in expensive technology and became obsolete.
Late 1990s. Databases Are Born and Grow
The internet gave background screening companies access to more information than ever before with online data. Newly built databases provided quicker searches and more comprehensive checks. Public records, criminal databases, and other relevant information became more accessible, enabling background screening companies to provide faster and more accurate results.
The 2000s. Say Hello to Innovation and Regulation
Companies widely adopted the internet and digital databases. This acceptance transformed how background checks were conducted. Additionally, stricter regulations like the amendments to the Fair Credit Reporting Act (FCRA) ensured that background checks were conducted ethically and transparently. This decade also saw the rise of identity verification. Because of the improved accuracy and timeliness of the reports, more employers started seeing the benefits of adding third-party background screening to their hiring process.
The 2010s. Laws Shape Background Screening Reports
Trends in employment law significantly influenced background screening processes. These trends pushed the industry toward greater fairness, equity, and compliance, aligning with time’s evolving legal and ethical standards.
- The "Ban the Box" movement advocates for the removal of the checkbox asking about criminal history on initial job applications. To comply with these new regulations, companies began conducting criminal background checks later in the hiring process, typically after a conditional job offer. The industry responded by developing more tailored and compliant screening solutions, ensuring that employers could still make informed hiring decisions while respecting the rights of applicants.
- Non-discriminatory practices, reinforced by legislation like the Equal Employment Opportunity Commission laws, required background checks to be free from racial, gender, and other biases.
- Salary history bans, implemented to combat wage inequality, necessitated changes in how background screening companies handled employment verifications and candidate evaluations.
- Many cities and states require special disclosures the candidate must sign and special adverse action requirements and language the employer must follow. Diligence in this area ensures the appropriate forms are presented to the applicant when they complete the authorization and disclosures through advanced technology.
The Past Decade… Big Data, AI, and More Regulations
The explosion of digital information empowered background screening companies to leverage big data analytics and extract valuable insights.
AI and machine learning algorithms enhanced background screening accuracy and efficiency. These technologies enabled background screening companies to identify patterns in data, predict potential risks, and make more informed decisions. Automation also reduced manual requirements, minimized errors, and expedited the screening process.
The digital age also initiated the rise of social media and online presence. Background screening companies started incorporating social media screening as part of their services. This move gave employers a more holistic view of candidates. The downside was these raised concerns about privacy and ethical considerations. The upside was it offered valuable insights into candidates' behavior, character, and suitability for specific roles.
2024 and Beyond
The background screening industry is poised for more innovation and advancement. Emerging technologies like AI have the potential to revolutionize background screening in numerous ways. Additionally, the focus on DEI continuously drives the need for more inclusive and bias-free background screening practices. This shift aligns with the broader societal push for greater fairness and equity in the hiring process.
As Data Facts celebrates its 35th anniversary, the background screening industry is a big example of the power of innovation and adaptation. From manual processes and paper trails to the current era of digital footprints and AI-driven analytics, the industry has undergone a remarkable transformation. With every technological advancement and regulatory development, background screening has become more efficient, accurate, unbiased, and reliable.
