The New York Times
Background Checks for Job Candidates
December 1, 2010
OfficeDrop scans paper documents into digital files. Its clients include hospitals that want to archive patient records and a minister with too many hand-written sermons. Prasad Thammineni started the company in 2007 and opened his doors to clients a year later.
THE CHALLENGE Checking the backgrounds of job candidates to ensure that only trustworthy employees handle client documents (without violating candidate privacy or breaking the bank).
THE BACKGROUND Mr. Thammineni, who is 41, left the Wharton School three years ago with a business education and 8,000 pages of notes. Reluctant to bury years of labor in boxes, he scanned the notes into his computer, where he could search them by keyword. When friends started asking him to scan their work, too, the idea for OfficeDrop was born.
The need to do background checks came up in the start-up phase, when participants in a focus group said they were nervous about entrusting strangers with private documents. Not knowing where to start, Mr. Thammineni searched Google for the term “background checks” and pulled up dozens of vendors with ads promising instant results. When he called the companies for information, he found himself speaking with ill-informed representatives in large call centers who seemed bent on selling him as many checks as possible. “I didn’t get much of a sense of the depth of their knowledge,” Mr. Thammineni said.
Then he remembered the extensive screening Wharton School had put him through before offering him admission. The school had checked not only his address and any criminal history but also his college records in India. The name that popped up when he searched his notes was Kroll.
A subsidiary of the well-known corporate detective agency, Kroll Background Screening has 600 employees around the world and conducts a range of checks for clients that include day care services and Fortune 500 companies. Mr. Thammineni spent half an hour on the phone explaining his budget and business model. A sales representative e-mailed him a proposal the next day.
THE OPTIONS While small-business owners have dozens of companies that perform background checks to choose from, Mr. Thammineni focused on Kroll and a basic five-point plan that he could customize depending on how deeply he wanted to dig and how much he wanted to spend.
The first piece of the package is the Social Security number and address check, which confirms the candidate’s name and date of birth and also shows where he or she has lived. With this information, Kroll can conduct other checks — criminal checks in particular — without relying on names and addresses provided by the candidate.
The criminal checks can get complicated because authorities keep records in a wide range of courts. Kroll suggested that Mr. Thammineni pull data from three sources. With each source, Kroll searches using names, dates of birth and the history of addresses that came up in the Social Security check, said Jenifer DeLoach, general manager for Kroll’s corporate background checking business. The search begins broadly with a proprietary database that Kroll calls the United States Criminal Records Indicator, which compiles data from a variety of directories including state sex offender registries and Interpol’s most-wanted list. Next, Kroll checks county criminal records, which often have the best summary of an individual’s “garden variety misdemeanors and felonies,” as Ms. DeLoach put it.
Kroll also recommended digging into federal court records that contain information about crimes committed across state lines and tried by federal courts for other reasons. The company gave Mr. Thammineni the option of scanning federal records through a national summary or conducting a more detailed search of every federal court district where a candidate had lived.
Driving records came last. This check is crucial because employers can be liable for accidents that happen on company time. In addition, Ms. DeLoach said, the data can offer insights, flagging those who flout the law or abuse drugs or alcohol.
Outside the five-point bundle, Kroll offered Mr. Thammineni two other types of checks. It recommended credit checks because OfficeDrop employees might be handling sensitive financial information. A low credit score can indicate that an employee is financially strained and might be tempted to steal. Kroll also suggested drug testing, which involves setting a companywide drug-free policy requiring employees to be tested at the time of hiring and then randomly throughout the year. (Other tests available to employers include résumé verification, professional license checks and media scans that track mentions in the press.)
The bundle starts at around $60 per person investigated and can cost more if a client needs to search maiden names or lots of jurisdictions. Ordering services individually costs anywhere from $6 for a driving record to $80 for a tailored media search.
THE DECISION Mr. Thammineni decided to go with Kroll. Constrained by a tight budget and reluctant to invade employee privacy, he did not stray far from the five-point package. OfficeDrop now pays $100 to $175 for every candidate, depending on how many states he or she has lived in. When Mr. Thammineni wants to hire a new employee, he enters the person’s name and Social Security number in OfficeDrop’s online Kroll account; in less than a week, he receives a seven- or eight-page report.
In the federal crimes category, he chose the simpler national summary instead of going district by district. With the county, state and national checks and the criminal records indicator, he said, “we felt we were pretty much covering everything.” He also chose to add credit checks. But he decided against drug testing. Running such a small company, Mr. Thammineni said he saw his employees every day and could spot drug issues. “The last thing we want to do,” he said, “is tell people how to live their lives outside of the office.”
Finally, to shorten the lag between selection and starting date, Mr. Thammineni also decided to conduct the background screenings after candidates had been hired. “It’s a conditional job offer,” he said, explaining that new employees receive training but are not allowed to scan customer documents while the background checks are pending.
WHAT OTHER OWNERS SAY Lindsi Shine, chief executive of Insider, a concierge service in New York: “I wouldn’t let anyone in on a trial period before the background check is complete. Thammineni should take another step to protect his clients and hold off on hiring candidates for three days. Another three days isn’t going to make a difference.”
Doug Burgoyne, founder of Frogbox, a moving supply company in Vancouver, British Columbia: “One thing every business owner should have is a network of other owners who can be mentors. Instead of going to Google and indirectly getting a reference through Wharton, he should have asked his business network who they are using. These guys are invaluable; they’ve already done all the research.”
Kimberly Fowler, chief executive of YAS Fitness Centers, Venice, Calif.: “I would recommend that he also do online searches. Checking sites like Facebook, Google and MySpace is free and doesn’t take very long. You can find out a lot about people that way.”