The idea of outsourcing employment verification work may seem like a foreign concept to some consumer reporting agencies (CRAs). After all, you’ve recruited and trained an in-house team of researchers you can rely on. Why would you hand this crucial function over to a third party?
We get it. You’re attached to your team. And so far, your internal team may have been enough to handle your current volume of employment verifications.
But one thing we’ve discovered in our years of partnering with CRAs of various sizes is that, all too often, CRAs fail to look closely at their cost models to truly weigh the value of outsourcing against the expense of maintaining an entirely in-house operation.
Whether outsourcing is currently on your radar or not, you should be aware that there are real financial benefits to outsourcing some or all of your employment verification work. Take these factors into account when planning for your firm’s future:
The Hidden Costs of In-House Verification
When most CRAs think about the cost of an internal employment verification team, they think about direct expenses such as labor and time. But there are infrastructure costs to account for, as well, such as office space, computer equipment, electricity, and everything else that goes into staffing facilities with human researchers.
When all the hidden costs of maintaining an internal team are considered, outsourcing may prove to be a much less expensive alternative.
The Automation-Manual Verification Split
Based on our industry experience, we estimate that about 35% of employment verifications can be completed via automated tools, and 65% require manual techniques. (This ratio varies by industry, of course.)
Many CRAs don’t recognize the efficiency boost that comes from outsourcing your manual verifications while keeping the automated orders in-house.
Compared to the laborious process of making phone calls, leaving voicemails, and waiting for callbacks, automated verifications take almost no time at all. In other words, the 35% of verification tasks that can be completed automatically require about one or two percent of your labor resources. Manual processes dominate the rest.
Imagine the time and money you would save by allowing your internal team to focus on automated verifications while reserving the much more consuming manual jobs for an outsourced provider.
Onboarding Costs Time (and Money)
The time it takes for a brand-new verification specialist to reach even a modest production level can be measured in months. And while your new hires get up to speed, the efficiency of your entire team will suffer.
The best outsourced employment verification providers, on the other hand, have onboarding down to a science.
For example, here at SJV Data Solutions, our technology and training systems are so finely honed that we can get a new hire up to a 70% or 80% production standard in just three or four days. They are able to achieve an 100% standard in less than a month. This is possible with the industry knowledge, software, and sheer size of an experienced outsourced vendor.
An Answer to Unpredictability
The CRA business — especially when it comes to employment verification — has always been cyclical, tied to economic and hiring trends that are largely out of your organization’s control. The COVID-19 crisis has been an extreme reminder that it is always difficult, if not impossible, to plan for your future staffing needs.
Unfortunately, many companies had to cut back on personnel in the early days of the pandemic. As the economy started to regain strength, the same organizations may have found themselves short-handed as orders came flooding back in. (As we mentioned above, it can take quite a while to spin new researchers up to full capacity.)
An ongoing relationship with a high-quality outsourced employment verification provider can protect your firm from both spikes and downturns. You’ll worry less about predicting the future when you know you have a reliable team of experts standing by, ready to get to work on your behalf at a moment’s notice.
How do you find a high-quality partner for your verifications overflow? There are three quantitative areas to pay attention to:
- Scale How much additional volume can they handle? If they surpass that volume, how do they scale their own headcount, and how quickly?
- TAT (Turnaround Time.) How quickly are they able to complete a verification? How does that compare to your own benchmarks? Be sure to compare apples-to-apples here: automated verifications are much faster and rarely fail, so you will want to ensure you’re comparing your manual verifications benchmarks to theirs.
- UTV (Unable-to-verify) rate. For all intents and purposes, the “failure rate”. How often are they unable to complete a verification?
We encourage our clients to think of us as a release valve. If you’ve got overflow, we’ve got your back. If you are a CRA looking to outsource your excess employment verification orders, get in touch with us today.