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Employment Verifications and Headcount: Goldilocks and the Three Bears

goldilocks

We’ll admit that this article’s title is slightly on the whimsical side for a background check provider. But if you hear us out, we think you’ll understand why we think employment verifications and the traditional story of Goldilocks have something in common.

Employment verifications are a bread and butter service for most consumer reporting agencies (CRAs). They come as an expected and essential part of the package when clients request background checks on their new (or soon-to-be new) hires.

It’s easy to understand why. A troubling percentage of job applicants misrepresent themselves on their resumes. Employers want to make sure they have the best, most qualified people. So, employment verification is a must.

But while employment verifications are great for your clients, as a CRA, they’re a mixed bag: a steady stream of work and a constant source of headaches.

One major reason employment verifications are so troublesome for CRAs is that they can wreak havoc on your best-laid headcount plans. And this is where Goldilocks and her famous ursine friends come into play.

The Unpredictability of Background Checks

The COVID-19 crisis is an ongoing reminder of how difficult anticipating changes in the labor market can be. At this time last year, few people could have predicted the massive wave of layoffs, the plummeting unemployment rate, and then the explosive recovery brought on by the pandemic.

This spring, many CRAs may have reduced their staffing levels in response to declining requests for pre-employment background checks. But as demand took off a few months later, the same CRAs may have found themselves seriously lacking the people required to complete this works.

On the other hand, some CRAs may have chosen the opposite path: maintain their pre-COVID staffing levels throughout the pandemic and hope the economic recovery would be strong enough to justify paying more team members than they strictly needed to meet their demand.

Neither strategy is ideal. The “too cold” version (remember Goldilocks?) risks being caught flat-footed.

Verification specialists cannot be switched on and be up to full production instantaneously. They must be trained, and training takes time. It can sometimes take months before a brand new researcher is ready to handle a full workload.

The “too hot” approach can eat into your already-narrow margins for employment verification work.

Obviously, the COVID-19 pandemic is an extreme example, but the pre-employment background screening market is cyclical even in “normal” times. Is there a “just right” strategy that ensures you’ll always have the correct headcount to handle the highs and lows of demand?

The Secret to Balancing Headcount With Demand for Employment Verifications

Employment verification might be the most manual labor-intensive form of background check. Only about 35% of employment verifications can be completed using automated tools. The remaining 65% often involve a series of phone calls, voicemails, and callbacks that can stretch on for days.

On top of that, many employment verification clients have strict and precise requirements concerning how they expect manual research to be conducted. (For example, “I want you to call twice the first day, wait two days, call another time, wait another day, then call twice again.”)

The result is that manual employment verifications can dominate a significant portion of your labor resources while delivering scant opportunity for profit.

We recommend a solution that gives your staff greater flexibility to focus on other tasks and allows your organization to maintain a leaner headcount, even during periods of high demand.

Here’s how it works: Keep the relatively efficient automated employment verifications in-house. Outsource the rest to a trustworthy third-party provider.

By outsourcing employment verifications, your company can scale up and down quickly in response to market changes. Large outsourced providers have training down to a science. They can get new people up-to-speed much faster than small CRAs.

If employment verifications seem too crucial of a function to hand off to a third-party provider, we encourage you to read our recent article, “Why Outsource Employment and Resume Verifications?” The article explains the hidden costs of staffing an internal employment verification team, as well as the many overlooked benefits of partnering with a top-notch third-party provider.

And when you’re ready, the employment verification experts at SJV Data Solutions would love the chance to show you what a “just right” solution to your headcount problems looks like.