Screening Your Background Investigations Partner

Similar to the way a background investigations’ company screens job candidates prior to their hiring, employers should do their own due diligence before choosing a background investigations partner.

One of the key parts of any such assessment is knowing what to look for. A quick internet search will yield hundreds of companies who offer background search services, and differentiating one from the other can be difficult. 

Many employers wrongly assume that each company is providing the same basic offering, so they are likely to prioritize pricing or turnaround time as the key factors in their decision.

However, this approach ignores an important, and largely unknown, capability that can make the difference between a valuable partner and one that misses critical information.

Consumer Reporting Agencies

Companies that conduct background screenings are categorized as Consumer Reporting Agencies (CRAs). When screening current or prospective employees, CRAs typically run a handful of off-the-shelf searches of large, publicly available databases.

Most of these reports look for information such as an individual’s credit history, documentation of any criminal activity, and education verification.

The results from these searches can have a profound influence on the decisions made by an employer, but beware – they may not always tell the whole story or give an accurate portrayal of the candidate.

While it may not happen regularly, it is not uncommon for these types of searches to turn up results for the right name, but the wrong person. Information can be reported inaccurately, or, as we will see below, critical information can be missed altogether.

These scenarios demonstrate the limitations and potential gaps that exist within many conventional CRAs.

Private Investigative Agencies

Private Investigative Agencies (PIAs) are organizations with one or more licensed private investigators.

Each state has different ways to license private investigators, but most involve either the passage of an exam, sponsorship by a currently licensed investigator, a certain number of years served in an apprentice-like role, or a combination of these requirements.

At CI, our investigative team works under our owner Michelle Pyans’ PI License.

It takes a higher level of commitment and knowledge to become established as a PIA and maintain the license, and this is, in part, why only an estimated 10% of consumer reporting agencies are also private investigative agencies.

So why is this important? There are many reasons, but here are three of the top ones:

• Expanded Searches – Most CRAs have the ability to perform up to 20 types of inquiries. PIAs often can perform more than 200 inquiries, meaning there are more opportunities to find information that is critical to the decision-making process.
  

• Improved Accuracy – A typical CRA report has a 4-6% error rate. Expanded data sets, combined with greater human oversight and analysis, result in PIA error rates of less than 1%.
  

• Customized Reporting – The number of unique inquiries that can be conducted by a PIA means an employer is not limited to a set list of criteria. If the employer has reason to look beyond the “stock” categories, it can be more easily managed (and managed properly) by a PIA.

Don’t Follow Michigan’s Example

The University of Michigan’s football team made a popular decision when it hired Glenn Schembechler as the team’s assistant director of recruiting in May 2023.

Schembechler’s father, Bo, was a highly successful – and much beloved – head coach at the university throughout the 1970s and 80s. The hiring of his son was a callback to the glory days of the school’s football program, and no doubt was warmly received by the university’s alumni.

But just three days after his hire, Glenn Schembechler was forced to step down from his position after offensive comments he previously made on social media were unearthed. The hiring quickly became a black eye, not just for the football program, but for the entire university.

In a statement following the incident, Michigan Head Coach Jim Harbaugh said: “I read the report myself. We have a company that vets that – social media – and they came back and [cleared him].

We've got a new company doing that [now], but they've got to be better. If somebody can find that [information] in a day, then we have to be better ourselves.”

Not surprisingly, the ESPN article also noted that, in the wake of the resignation, the school’s athletic department would be changing the company that previously handled their human resources background checks.

CRA vs. PIA. Which One is Right for You?

It’s not clear whether the company the Michigan Athletic Department worked with was a licensed PIA that failed to do its job properly or a consumer reporting agency that ran an automated search with minimal (or no) human intervention.

Whatever the case, the outcome was one that no employer wants, but every employer fears.

We are the first to admit there are never any guarantees when it comes to background investigations. The most diligent, well-designed searches can still miss things, but the odds of that happening are considerably less when working with a partner who is also a licensed PIA.

Does that mean you should only work with firms that have dual CRA/PIA licenses?

In a perfect world, yes, but such firms are going to be more expensive, and their thoroughness may lead to additional time before a report can be sufficiently reviewed and finalized.

The bottom line … for entry-level, lower profile positions, a standard CRA may be able to fill most of your needs and do a reasonably good job.

But for higher profile organizations, or more senior level executive hires, you would be well served to spend a little extra time and money to work with a partner who is also a licensed PIA.

After all, nobody wants to have two press conferences in three days to announce the hiring, and subsequent firing, of an employee.