When Checkr soft launched their free background check to applicants branded, Better Future, a few weeks ago, they took a huge shot across the bow to change the foundations of our industry in a big way.
CRAs need to take notice because the implications are broad and deep on so many levels. With its arrival to the industry just a few years ago, Checkr has done an amazing job at disrupting the business of background checks from technology, to process, to integrations and even customer acquisition.
deverus had been thinking about pre credentialing employees for a long time. We envisioned a not too distant future, (hint we are already working on this) where employees preverfied themselves prior to applying for jobs and then having the results updated daily through databases and a validation code in their apple wallet or app. They would present those credentials to HR upon applying for a job or even having it on their digital resume. HR would verify the credentials, and the process would move along smoothly and quickly. We believed the applicant would pay for such a service if it sped up the process while giving them more control and transparency around the information provided and the process in general.
But we got it wrong. When Checkr began offering free background checks they changed the game. They are going to get the process in the hands of as many applicants as possible and tie it to job openings and get referral fees for anyone who applies. They will ultimately also get revenue by making it easy and cost effective for HR to verify those results and move the applicant through the process using their background check services.
Why should CRA’s care? It’s simple. If they get mass appeal, which given their funding, buzz, and marketing expertise, they will, then eventually the plan will be to make the process so simple for HR to verify those results using Checkr background check platform. When this happens, you can see a mass exit of clients to Checkr because they just made the process much better for applicants, faster, easier and ultimately more cost effective for HR.
And remember, Checkr is backed by more than $100M in venture financing from Silicon Valley where market disruption is the rule, not the exception. The background check industry is about to change in a big way, are you ready for it?
I just returned from the HR Tech conference in Vegas last week. It was amazing. I spent 3 days wandering through the exhibit hall filled with huge players like Oracle, Microsoft, Google, IBM, ADP, and industry standards including Cornerstone, Indeed, SAP, and Monster. All the ATS were there. And like always there were a ton of startups hawking new innovations in payroll, benefits, job boards, AI, candidate selection machine learning, and more more. This was by far the biggest and most exiting HR Tech I’ve attended.
What was the common theme with all these exhibitors? Mobile. It was literally everywhere. Almost every vendor was showcasing their services on a mobile device. The message: “The future is mobile, get ready for it.” I was blown away with how far the user experience has come. There was so many cool ways mobile was being used to automate just about every process. I saw huge demos being conducted in every other booth filled with potential clients getting a look at all these new and exciting services delivered through a mobile experience and they were eating it up.
Why is this. It’s simple. We are in the tightest job market where everyone is fighting for talent, and younger job seekers are on their phones all day. They use text and they don’t use email. If you want their attention, you have to text them and then provide an experience that makes it easy and effortless to apply for a job. The statistics are overwhelming. HR technology companies get this. From Oracle, Microsoft, to ADP and Cornerstone, to the smallest players providing niche services, they are capitalizing on mobile big time.
And then there were all the background check companies. The main 7 were there as well as a sprinkling of smaller ones and even three startups.
But what struck me was not one CRA, except the startups were showcasing their technology, much less mobile. In fact, nothing in their marketing messages spoke to anything other than what they’ve been saying for 15 years. Speed, Accuracy, Compliance, Services, Support, Global, same old, same old… The funny thing is while all these HR facing companies where showcasing their technology on mobile, the largest background check companies were using gimmicks to attract attendees. I saw everything from a magician, airbnb vacation giveaways to carnival games. It was actually kinda bizarre. Why were they not showing their frontend technology and mobile if they had it. It was after all, a TECHNOLOGY CONFERENCE!
I came up with three possible reasons.
(1) HR Tech is not the main HR show. It’s SHRM and it is true they were all scaled down booths realizing that there’s more tech people than HR prospects. No reason to spend much money and resources for showcasing your technology and platform. I get that.
(2) They don’t really have compelling mobile solutions or technology that looks presentable when compared to all the amazing solutions that are all around them, so better to stick with what you know, basically what 900 other CRAs are saying.
(3) The background check industry, including the largest CRAs are so out of touch with the future, they can’t even contemplate how the background check could actual evolve and embrace this future and really improve the user experience in all its now current and future manifestations. Instead they focus on compliance, turnaround time, coverage, great customer support, and accuracy. The result is everyone is saying the same thing and proving that we are a commodity.
And here is the important part. By everyone saying the same thing, with no real differentiators, all focused on the same value propositions, it means we are a commodity. To all the HR tech providers we are just a checkbox, a pain in the ass, a backend process that needs to be minimized as much as possible so their customers can have a great employee life cycle experience with their company. It’s funny, because almost every background check company I talked to complains about the ATS invasion. They are taking over, pushing us to the background, raising referral fees, switching customers, making us a commodity. I say, hell yes, because we’ve let it happen. We’ve done little to stay out in front, to give HR something to keep us at the front of the experience. What do you expect?
So what do you do? Here is what I’ve been saying and believe it now more than ever after HR Tech Vegas. You have to provide a mobile solution for the applicant to fill in information and check status and results. And it can’t just be a crappy reduced website. It must make it easy for the applicant. It must have text. It must be easy to use. It must be slick and brand-able for HR. It must represent a great experience that shows off the company's ability to move a candidate smoothly through the process. When you do this, you stay in front of your customer. You offer a differentiator and a little bit of glue to keep them from moving to competitor when an ATS gets a better revenue share deal.
I have to say, with the trends I’m seeing, I’m actually pessimistic about our industry. I’ve been in it for 20 years and our reluctance to embrace new technology, our focus on the same differentiators, and inability to really innovate, has left us relegated to a backend process where we are really almost all the same. What will happen is a continual move towards more commoditization, more pricing pressure, more industry consolidation. A few companies will come out on top and will continue to survive providing the same services but they’ll make it because they were able to win on price and eat up competitors and own the market.
My only response is we need to provide some innovative technology that keeps us relevant, that keeps us in front of HR, that really provides value to the customer. I believe that mobile is a step, it’s a right direction, but only a start. We need to continue innovating with AI, machine learning, make the background check so pervasive they don’t even know it’s happening while become faster and even more accurate.
CRAs are a key piece of the hiring process for many companies. Losing time to hardware outages or system crashes is unacceptable. People are waiting to get hired, and recruiting managers need constant support from their CRA to ensure the right person find the right job. Background checks are a crucial part of the hiring process, and no one can afford to wait for slow results or lost time due to poor IT infrastructure. AWS can improve the responsiveness and reliability of any CRA’s service offering.
Amazon is one of the largest web companies in the world, and it takes a lot of IT infrastructure to keep the lights on at the world’s biggest store. Amazon Web Services (AWS) is a cloud computing provider run by Amazon to earn an income from the tech giant’s idling resource pool. Sharing its computing power, storage, and other IT resources allows Amazon to serve some of the largest companies in the world. Amazon, Reddit, GE, and Unilever rely on AWS to provide immense technological resources including storage, processing power, networking, analytics, and a host of other IT services.
What does this all have to do with consumer reporting agents? AWS is an attractive resource for businesses that need on-demand services and reliable uptime to fulfill their obligations without breaking the bank. Overspending on hardware is a luxury few businesses can afford, but excess capacity is crucial during certain peaks, seasons, or events. Preserving precious resources without losing functionality is an important goal to stay competitive as a CRA.
Amazon is an experienced and innovative cloud computing provider, and AWS is the market leader when it comes to web services for corporations. Aside from scalable resources, Amazon also provides analytics, design help, security, and flexibility for IT directors and executives. Moving your CRA’s tech functions only is a smart move that ensures maximum security, continuity, and performance when you need it most. A scalable web service means you have what you need to get the job done without wasting precious resources on overbuilt IT infrastructure. On-demand web services from AWS are a great way to stretch your IT spending without losing capabilities or uptime.
Each client is different, and it’s important to match the needs of the job with the profitability expected from the investors or owners. Using IT infrastructure efficiently is an important piece of the puzzle. AWS can help CRAs manage their tech resources to limit expensive overhead without losing IT capabilities when they are needed. AWS offers a wide range of corporate services for CRAs including storage, processing power, database management, mobile application support, detailed analytics, developer tools, and many more.
As you add new services to your suite of CRA solutions, it’s important to set up the IT backbone to support your goals and meet the needs of your clients. With AWS, you can scale up and downsize your requirements as they evolve, minute-by-minute. Most of the service packages from Amazon’s web services division are set up to be “pay by usage.” It’s easy to match your revenues and expenses to ensure your profitability on each job, no matter what the requirements may be. Amazon offers a wide range of cloud computing solutions for CRA businesses – complete with admin support, security, risk management, analytics, and many other services.