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The
background screening market is highly fragmented and
represents a large market opportunity. According to a 2004
presentation by the National Association of Professional
Background Screeners (‘‘NAPBS’’), the background
screening market at that time was estimated to be $4.0 billion
in size and to consist of more than 1,000 screening firms.
The
demand for background screening solutions is growing as a
result of several factors. In general, public awareness of
potential security threats has increased significantly over
the past several years. Additionally, many highly publicized
incidents of violence in the workplace have further
contributed to the public’s general awareness of, and
concern regarding, security threats, particularly in the
workplace. As a result of these and other events, governments
and other regulatory bodies have established processes and
procedures to identify and minimize potential threats, many of
which include obtaining background information on individuals.
Additionally, many companies have sought to establish new, or
enhance their existing, screening programs to improve
workplace safety and better protect themselves from negligent
hiring claims. These factors, among others, will continue to
contribute to an increase in demand for background screening
solutions. In addition to the increased demand driven by these
socio-economic trends, several recent studies and reports have
further supported the need for an effective employment
screening program, including:
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The
NAPBS reported that approximately 40% of resumes contain
material lies or omissions about education, past
employment or qualifications;
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The
U.S. Department of Labor reported that drug users are
absent from work on average five days per month due to
drug use; and
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The
Association of Certified Fraud Examiners estimates that
companies lose more than $600 billion per year as a result
of employee fraud.
To
address these concerns, employment screening has evolved from
a simple, often manual, verification of a job applicant’s
prior employment to a more thorough review and verification of
an applicant’s background, including, among other things,
criminal history, education and prior employment. Screening
can discourage applicants from concealing information or
falsifying credentials, and allows for more informed decision
making in the recruiting and hiring process. By basing
decisions on more complete, accurate information, a company
can more effectively maintain a safe work environment.
Demand
for employment screening solutions is also driven and
influenced by trends in related markets. Leading HRO providers
have increasingly looked to collaborate with other service
providers, including background screening solution providers,
to offer a comprehensive solution to potential customers
without having to develop their own software applications or
service offerings across all human resource (‘‘HR’’)
functional areas.
In
November 2006, HRO Today magazine reported that human resource
outsourcing is becoming increasingly prevalent among large and
mid-sized enterprises as these companies look to reduce costs,
focus on their core competencies and minimize capital
investments.
Additionally,
Gartner estimates the worldwide HR business process
outsourcing market will grow from $23.9 billion in 2005 to
$33.4 billion in 2010, a 6.9% compound annual growth rate.
Outlook
"Employment
screening" has become as a integral part of employment
market due to;
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Increased
concerns about workplace/data/critical business
information security.
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Rising
awareness.
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Increased
trend of company's toward working with few but better
employees.
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Rising
HRO ( human resource outsourcing )
-
Its
more usability/benefits over other traditional
screening methods.
Success
of "on-demand employment screening solutions"
industry directly depends on growth of job market (which
itself directly depends upon economic growth), more companies
will hire more the work will be generated.
This
article reflects personal views of the author 
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