Monitoring the key performance indicators (KPIs) of your screening program can save your organization time and money, accelerate onboarding, and improve your quality of hire. By understanding the background check metrics that you need to measure, tracking them on a regular basis, and comparing them to your chosen benchmarks, you can proactively address any potential issues, identify inefficiencies, reduce costs, and optimize your process.
In this article, we’ll dig into each metric and look at its components to help you understand what to track, how to measure it, and why these metrics matter.
Background Screening Metrics to Measure
Background screening benchmarks can vary widely depending on industry, location, and other factors. For example, in 2019 average discrepancy rates (the amount of information a candidate submits that cannot be verified) for verification data ranged from a low of 8.99% in transportation and trucking to a high of 27.66% in education, with the average overall discrepancy rate across industries at 20.92%. If you don’t have screening benchmarks to rely on from an industry organization or other third-party source, you’ll need to develop your own from internal data.
Use where you are now as a starting point. Then set benchmarks for improvement and work to achieve them over time. Look for quick wins—where can you make small changes that will deliver the biggest savings of time, money, and effort?
There are different ways to calculate your metrics depending on the tools available to you. Some background screening platforms provide reports on these metrics in your dashboard, which can make tracking them much easier. If yours doesn’t, you can get similar results by manually reviewing data and inputting it into spreadsheets or importing it into a business intelligence app.
When tracking metrics, don’t just record numbers; be sure to calculate percentages, too. For example, if you have 1,000 background checks at one location and 100 come back with hits, and 150 background checks at one location but just 15 come back with hits, 10% of checks at both locations have hits. Using percentages will allow you to better compare metrics across different locations, departments, or roles.
1. Turnaround Time
Turnaround time is the processing time for the background check, starting from when the candidate provides consent to when results are returned for review.
Measuring the turnaround times for all of the different background checks you use, in all of your locations or departments, helps you further fine-tune your screening program and adjust time-to-hire goals. Insight into turnaround times also helps you set expectations for both hiring managers and candidates. Finally, transparency into how long the screening process will take goes a long way toward keeping candidates happy and in your hiring pipeline.
Most screening providers provide access to turnaround time reports, either on a regular schedule or in real-time through a reporting and analytics dashboard. For each location or department of your organization, you’ll want to track average turnaround time by:
- Background check package
- Screening component (national criminal check, drug screening, employment verification, etc.)
With increased insight into turnaround times for each screening, you can see where bottlenecks may be occurring and work with your screener to address the issue. Excessive delays might also be a sign that it’s time to look for a provider that can deliver faster results.
Time-to-complete is a measurement of the time it takes a candidate to complete the background check form and provide consent, beginning from the time the background check is started by you and forms are delivered to the candidate, and ending when you and your provider receive consent.
You can track this data manually or, if your background screening program integrates with your ATS, easily access date-stamp information to see how long each step of the process takes. Be sure to evaluate time-to-complete by role, background check package, and location to see how it varies.
Monitoring time-to-complete can help you pinpoint reasons for the delays and use what you learn to better communicate with candidates, decrease time-to-complete, and speed time-to-hire. (Time-to-complete and turnaround time may be combined to get a more accurate benchmark for how long a background check takes, from start to finish.)
Using email or text messages to alert candidates that they need to complete forms, and implementing a mobile-optimized background check form, are simple changes that can greatly speed time-to-complete by enabling candidates to complete applications and consent forms quickly and easily on their smartphones. Your HR team can reach out to candidates in real-time to request missing information or guide them through the process.
3. Number of Checks
The number of background checks your organization orders, both overall and per-candidate, has a major impact on screening costs and time-to-hire. In 2019, the average background check package included four searches per candidate. Are you ordering too many checks, or too few? (Of course, screening packages will vary by industry and position type.)
Tracking the number of checks ordered by type, including details about consents received, clear results, results with hits, and disputes, can provide valuable insights into problems or potential areas for improvement. Dig deeper into these factors:
- Number of checks by location, department, and user: Are different locations with similar numbers and types of job openings running a similar number of background checks? If not, this might mean that one location or department is having a harder time finding suitable hires, or that it’s not screening candidates consistently.
- Number of checks by percentage cancelled or expired: If a large percentage of background checks are expired or cancelled, dig into why. Were candidates alerted to start the background check process in a timely fashion? Did they receive clear directions? If not, you may need to change your communication tactics. If a large percentage of candidates never consented to move forward with screening, you may need to adjust recruiting tactics to attract more interested or qualified candidates.
- Number of checks by percentage clear and percentage with hits: You should also track hits by type of record, such as felony, misdemeanor, drug positivity, and so on. If a high percentage of checks return with hits that are disqualifying for your open roles, you may want to rethink your recruiting channels or modify your decision matrix, or both. For pre-employment drug tests, track positivity rate by drug type. You may find you’re over-screening for drugs such as marijuana that may be legal in your location. You may wish to adjust your adjudication rules appropriately so these results don’t require review.
Ready to boost the ROI of your CRA investment? Download our guide: 5 Steps to Getting Better ROI from Your Background Screening Program
4. Cost per Check
Monitoring your screening costs is critical to understanding and forecasting cost-per-hire, justifying screening spending, and budgeting more effectively. It can also help pinpoint areas where you can reduce spending.
The more data you can gather regarding background check costs, the better. Track costs by screening component, by role, by location, by department, and by user. Be sure to break out third-party pass-through fees and government surcharges. Breaking out costs in this way helps you identify locations, departments, and users that are spending more than average on screenings so you can investigate why and make changes to reduce costs.
For example, if some of your locations have higher-than-average screening costs, it might be because they hire for more roles that require education and employment verifications or motor vehicle checks. But you might also discover that they’re performing unnecessary screenings and need to refine their screening packages. It could even be that locations with lower costs are skipping important background screenings, potentially putting your organization at risk when you should be screening consistently across the company.
5. Adjudication Results
Monitoring adjudication results can help you fine-tune processes and enhance the value of automated background check adjudication. Track the percentage of adjudication results that fall under each of these categories: “hire,” “ineligible for hire,” and “requires review.”
Is the percentage of candidates ineligible for hire excessive? You may need to identify new recruiting channels or assess your hiring criteria to attract candidates that are better-suited for your roles.
This could also be a sign that your adjudication rules are too stringent. Are candidates being marked ineligible for reasons that don’t affect the particular job? Assuming you are meeting any relevant federal, state and industry guidelines, you may wish to adjust some of your criteria.
Do a high percentage of results require review? If your team frequently has to adjudicate a certain result (such as misdemeanors older than three years) to be eligible, simply updating your adjudication rules can save your team significant time.
6. Discrepancy & Dispute Rates
Background discrepancies result when inconsistent or unverifiable information is provided by the candidates during the screening process. A high discrepancy rate can lead to a high number of disputes, which slows turnaround times and drags out the hiring process.
To see how your screening results measure up, track the percentage of all screening results with discrepancies, as well as the percentage by each type of screening component.
Also measure how many of the discrepancies result in disputes. Undisputed discrepancies might mean the candidate lost interest in the job and didn’t bother to file a dispute, but they might also indicate the candidate was less than truthful. According to a 2019 GoBanking Rates poll, one in three Americans lie about work experience and employment dates when applying for jobs.
Some discrepancies are more serious than others. For example, often employment or education discrepancies are due to minor date conflicts, such as whether an applicant graduated in the fall or the spring semester. If you find a high percentage of discrepancies for which you wouldn’t deny employment, you can streamline your process by adjusting your adjudication rules so such discrepancies don’t return hits.
A dispute regarding a criminal record, on the other hand, may be much more serious. A high dispute rate for criminal records could be a sign that your background check provider is using unreliable or unverifiable information, or not conducting manual reviews of background check results.
7. Productivity: Manual Process vs. Automation
Streamlining the background check process saves time and makes your HR department more efficient, which reduces cost-per-hire.
Measuring automation savings starts with knowing your HR team’s salaries, then figuring out how much time they spend each week doing any part of the screening process manually. For example, manually reviewing and comparing screening results to your adjudication matrix, or manually kicking off adverse action and managing the process, or manually starting individual checks for large cohorts of candidates. Once you have this number, use their salary to understand how much manual processes are actually costing your company.
Once you start automating many of these manual workflows, assuming you’re using a provider that offers them, you can track the time savings and do some simple math to measure how much money your provider is actually saving you. For example, if two employees whose total compensation including benefits is $35 per hour, and each spends eight hours per week manually reviewing screening results, it’s costing you $560 per week (16 x $35) or $29,120 annually.
Measuring Background Check Metrics Pays Off
Set a schedule for reviewing your background check metrics regularly, and compare the results month over month, and year over year. You can simplify this process by using a background check provider that offers the robust reporting tools needed to track KPIs and generate reports based on location, department, user, and more. At each review, look for quick changes you can make to improve your metrics and meet or surpass your chosen benchmarks.
A successful background check program must balance cost, speed, and risk management. By monitoring key metrics and continually striving to improve, you can mitigate risk, save time, and reduce costs.
It’s been said that “What gets measured gets managed.” Tracking key background check metrics is the first step to better managing your screening program and getting the most from your CRA.
Find out how you can improve the efficiency of your screening program and get more return on your CRA investment with GoodHire. TALK TO SALES
The resources provided here are for educational purposes only and do not constitute legal advice. We advise you to consult your own counsel if you have legal questions related to your specific practices and compliance with applicable laws.