Thoughts from the 2006 Pre-Employment Screeners Conference

I presented last week at the 2006 Annual Pre-Employment Screeners Conference in Clearwater, Florida. The attendance was outstanding. Over 400 registrants showed up to hear some of the best and brightest in our industry educate and challenge us. As with most conferences, some of the best value came in the hallways, bars, and restaurants as we networked with our peers.

Les Rosen's presentation, as always, gave us all reasons to revisit our business practices in light of recent case law. Nobody can scare a group of consumer reporting agencies like Les, an attorney who owns California-based Employment Screening Resources. As a result of his presentation, we are considering changing our references to "criminal records" research to "public offenses" research. The point being that there are several states where some items reported on the court's criminal records indexes that aren't, under state law, criminal records. He also reminded us about the importance of setting expectations clearly with both customers and information providers.

Les, Art Cohen of Concorde, and Pam Devata of Seyfarth Shaw, LLP sat on the "Ask a Lawyer" panel and addressed a number of questions posed by conference attendees. To be honest, I sometimes shake my head at some of the questions posed by folks already in our industry. I can't imagine that someone would open a screening firm without first understanding the primary federal law governing their every action - The Fair Credit Reporting Act - and the applicable state analogues. Fortunately, this conference and those offered (along with many other great resources) by NAPBS are available to help them realize what they don't know.

I presented on Selection, Care, and Feeding of Courthouse Researchers. As I have done in my Background Investigator articles and other forums, I encouraged screening firms to quit treating their services like commodity products. In order to do that, they need to treat their courthouse research providers as partners in quality and quit making sourcing decisions based solely on price. I also addressed the heightened provider due diligence requirements included in the current draft of the NAPBS accreditation standard (full disclosure: I am co-chair of the NAPBS Ethics and Accreditation Committee, which developed the standard). If you are interested in my presentation, let me know and I'll post it here.

I also had an opportunity to moderate a panel discussion with representatives of four exemplary court research firms. Rafael Jorge of California-based RJI Services, Dean Carras of North Carolina-based Background Investigation Bureau, Barak Zimmerman of Pennsylvania-based County House Research (one of the few companies with a domain name longer than mine), and Rod Gagnon of NH Background Investigations each detailed the unique research challenges posed in their jurisdictions. The expertise these kinds of firms bring to the table is an excellent argument against the low bidder research provider model many firms are adopting.

Debbie Weil, author of The Corporate Blogging Book, was an outstanding outside-of-the-industry presenter. She did a great job of selling the concept of a corporate blog (hence, I created this blog a couple days later). She overcame some technical difficulties with a lot of grace (where's the A/V Club when you need 'em?) and made this quasi-technical topic approachable. The book is a good read, too - just don't hold this blog up to it's standards (yet).

There were a number of other excellent presentations, including Background Information Services' Jason Morris' thoughts on industry trends. As a former NAPBS co-chair, Jason has some great insight into the industry.

There were several dozen vendors at the conference, including  TazWorks, who have become much more than a software provider to our firm - they are true partners. The growth of the vendor participation in this and the NAPBS Annual Conference is evidence of how quickly this industry is maturing.

As always, some of the best value from the conference came from networking with vendors and peers in the common areas and bar (club soda and lime for me, please). Even on the Super Shuttle to the airport, I connected with some folks from Scherzer International, one of the few firms I know that are in the same niche markets in which my firm operates. It is hard to quantify the value of the relationships I've developed by presenting at and attending these conferences over the last several years - but I know I am a better person and business owner because of the investment.

Regards,
--COFFEY

Comments

[Mike Coffey]

I definitely feel the research providers' pain. I know why the CRA's are pushing the providers to lower prices - they are feeling the same price pressures as they compete with the large players in the business.

However, my firm's business has doubled this year - mostly from clients coming from the big database-driven, cheap screening companies. Some left those guys because they got burned by hiring the wrong guy without doing their due diligence, others got tired of the lack of customer service or the "one size fits all" mentality.

More and more employers are becoming aware of the difference between a "piece of paper in the file" and a background check that helps them know all that they could reasonably be expected to know (the standard in negligent hiring and retention cases).

So hang in there, providers - we may carry the day yet.

[Clifford J Williams]

I'll echo Rod's assessment of your presentation as "excellent, as always." Your ongoing message about CRAs' proper treatment, selection, etc. of courthouse researchers is a step outside of the traditional industry lines - and is right on time.

As the providers of the core building blocks of many of a CRA's public-records-based information products, the courthouse researcher is a fundamental ingredient in the CRA's overall recipe for success. When the courthouse researcher thoroughly understands his CRA client's needs, passes through accurate and timely information, and delivers the kind of value-added service made possible by being an expert in his geographic niche, he makes it much easier for the CRA to satisfy its client. When, on the other hand, the courthouse researcher does not understand his customer's needs and expectations or fails to make himself an expert in his area by understanding the nuances of his courthouses, the unique challenges of his courts' indexing systems, or even the basics of jurisprudence under his state's legal system, he becomes an unpluggable hole squarely in the bottom of the CRA's ship - it's "garbage in - garbage out" at its finest.

The end product of any business in any industry will only be as good as (or perhaps as miserably bad as) the sub-products of its suppliers. Would you buy a computer from a company who notoriously uses substandard "cheap" internal components from unscrupulous suppliers that have high failure rates? How about buying a car from a manufacturer who gets brakes, airbags and other key safety components from the "cheapest" bidder? Or how about flying on an airplane operated by an airline that pays its pilots substandard salaries and benefits, has 100% turnover on its maintenance crews due to poor conditions and "cheap" labor and buys second-hand airplane parts and components from the "cheapest" supplier in town?

I'll admit - posting this on Coffey's site is analogous to preaching to the choir as in our professional dealings I'm crystal clear that we're on a similar page on this issue. Still, I wonder if we as an industry will really be able to reverse this trend because courthouse research is - and has been for quite some time - a price-driven commodity.

As a supplier to the background screening industry, we see this first-hand. Even today, I continue to be amazed when negotiating to supply information products to noteworthy CRAs headed by industry veterans to hear the classic retort, "oh, we don't pay more than 'X' dollars for those types of services." A classic twist is the barrage of January-ish calls we receive from the same folks calling because, "my boss has told me I need to call all of our suppliers and get better prices." These should ring a familar bell to anyone who has supplied this industry for any period of time. This is the way the likes of corn, wheat, oil, gold, etc. are bought. And folks, these are indeed...commodities. Sad, but true.

The shining light at the end of the tunnel - and one of the reasons I respect and admire Mike so much - is that he, like all conscious consumers, buys on value - not price. "Cheap" products, over time, are revealed for what they are. They wear out, break down, malfunction, and otherwise fail to meet their purchasers' expectations. Quality products have staying power, and the CRAs, as well as suppliers, who sell a quality service or product to their customer will enjoy success over the long term, while the purveyors of "cheap" information products with little or no value will not.

[Steven Brownstein]

Keep up the good work. I am glad to see that a presenter of mine, Debbie Weil, made an impression on you. I can't wait to see how many other blogs pop up. In fact, I've been playing around with one, too. Except that my time is limited with editing the newspaer and what have you. Nevertheless, thank you for your participation at my 2006 conference and for your column in my newspaper. I'm behind you 100%.
Steve

[Rod Gagnon]

I love your by line: "Because "Really Important Information" wasn't catchy enough" is not only correct, it's funny!...you don't really put it on your marketing materials, do you?

Your presentation was excellent, as always. However, I still think that your primary message of not looking at the Court Researchers as a commodity is really a losing battle. First the wholesale record searchers need to stand up for their prices and resist the temptation to cut corners so they can fit the low prices that are be offered them. Second, the retail screening companies need to manage their court record searches with quality controls (i.e. hit rate, seeded names, etc.). Together everyone makes money. Seperate, we all get sued. Right now it's all about the short money.

This industries dirty-little secret is that competition for low prices for bidding contracts for retail clients result in an overlooking of best practices. We see this mentality from screening clients all the time in our office. If the retail clients (the end user) only knew how Oz really worked behind the curtain, I doubt they would be willing to pay for these poor searches.

My point is that maybe a well educated client will end up being this industries best defense...