Wednesday 9 March 2011

Future of background screening in Russia (part 2)

It is good when single article has several parts. There's no need to think about the name of a new post - part 2 is the best decision you can make.
Previously I shared my vision of future trends of background screening, now it is time to discuss how these trends and innovations will help in creating value for the client.
Development of Background screening as a service. 
When we discuss background screening services we usually speak about SOURCES (Public, Databases, HUMINT etc.), TASKS (Identity check, Education check, Pre-employment screening, Creditability check etc.), GEOGRAPHY (Local, Regional, Global). I think that it is reasonable to change the point of view and assume HOW the client will be able to apply contractors/employees background screening results to his everyday work. What a junk! – you’ll probably think – Isn’t it obvious?   

While I was preparing this post I checked about 50 internet sites of leading background screening companies and find out that mainly these companies present their services as tasks (see figure above), sometimes these tasks accompanied by articles about best practices of regular background screening procedures implementation. Why even with strong financing these leaders prefer to sell TASKS? I think that the reason is in remarkable differences between the way background screening results can be applied by shareholders, top-managers, functional and linear managers. If we assume that the client is a well-structured enterprise with optimized business-processes we should identify decisions and data required for decision making.
The simplest case is contractor screening before signing of the contract. In most mid-sized Russian enterprises the contractor will be screened by security department (check if the company was duly registered, shareholders, affiliated bodies) and if there were no red flags the contract will be forwarded to the chief accountant and general director for signing. But can we declare that above mentioned red flags is exactly what chief accountant needed for decision making? Not at all. Russian tax authorities is very strict when the company signs contracts with so-called “odnodnevki” (financial agents for tax reduction or cashing) and for identification of these financial agents tax authorities use special instruction based on the data available during basic background screening. None of Russian risk-management companies ever presented or analyzed data this way. Should I mention that chief accountant can read the balance of the contractor much deeper then security professional? 

The  same problem can be seen with arbitrage records and background check for legal department. Analyzing civil court records staff lawyer can assume how the contractor protects himself, if it is good in corporate law etc. Sometimes I add this section in my reports but I never even tried to sell background check for legal department as a separate service. 

Public media search… We often screen open media to dig raw data but have you ever heard about check of the influence of the contractor’s public reputation on the image of the company? I haven’t yet, but most top-managers of public companies pay much attention to this indicator. They forced to assign staff managers to do this job for them. 

Summarizing the above, I think that it is time to review our background check reports to identify a list of target-oriented services and probably add valuable data form legal sources to help managers of different level to make good decisions.

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