This webinar is focused on HireRight’s 2009 Employment Screening benchmarking report. The goal of this session is for you to gain insights into the policies, practices, and trends at other companies so that you can compare both your screening program and future program priorities.

Our 2009 benchmarking report was released at the end of August. The study is designed to capture critical screening program data from a broad cross section of companies. This year, we surveyed over 1,400 separate individuals representing companies of all sizes and across all major industry segments. As our study base grows over time, we likely will provide further breakdowns by industry and company size Our goal in producing this report it to provide another tool for companies to have data to help them advance their screening programs.

We also looked at the key drivers of our respondents screening programs. Not surprisingly, the top reasons for having a program are: Mitigating risk Meeting existing company policies And complying with specific regulatory requirements. For employment eligibility screening, complying with regulation was by far the biggest driver which is not surprising given existing and new rules around I-9 usage and E-Verify deployment. Another key driver, which has grown in recent years, is the need to protect a company’s reputation. There was recently a high profile situation where Dominos Pizza had a PR challenge due to an unfortunate posting on YouTube Dominos CEO posted a response on YouTube countering the situation and declaring the company’s franchises would be mandated to do employment screening In this case, employment screening was the clear protector of the company’s reputation and brand

Each year in the study we ask who is responsible for overall screening program policy It’s shifted over the years towards Human Resources with almost 80% of respondents indicating HR as the policy owner Executive ownership is also very typical as policy is determined as the senior staff level as part of a broader risk mitigation plan Many other functions were also indicated, highlighting the differences in approach that often exists across industries For example, trucking companies often manage their screening programs through their safety department

Most companies today screen their new hire population, the only place this is still not true is among smaller companies. Many companies also screen existing employees at the point of transfers or promotions Only about 1/3 screen their contingent workforce. This means that 2/3s provide logical or physical access to their assets and facilities without any screens. While screening is growing in this area, this remains an area of real vulnerability for many companies. Almost 1/5 of companies report recurring screening of their employee base. This is an area we’ve seen grow considerably in recent years.

We then looked at what types of screens companies conduct today Most, of course, conduct criminal screening. This is an area where practice still varies widely. For example, some companies may only look at national criminal DB data while others do more thorough courthouse searches based on where applicants lived and worked Looking forward, we believe that there will be further innovation here that will allow even more effective and thorough searches by leveraging technology and databases Employment and education verification are also typically screened. This is the area of the largest number of “discrepencies” where candidate submitted information often varies from what is verified Finally, many companies conduct job-specific screens such as MVRs for drivers, credit for accounts, or professional credential verification

For new hires, almost all companies screen prior to the first day The remaining screen right after the start date Other screening is typically event driven meaning that it is triggered by an accident, random pull, transfer or promotion.

The core goal of screening, of course, is to identify any information on a candidate that is inconsistent with the requirements of the job When this information is identified and acted on, it is often referred to as adverse action In our study for both background and drug screening: About 50% of respondents indicated an adverse action rate of under 4% About 20% indicated an adverse action rate of between 5% and 9% And About 1/3 indicated a rate of greater than 10% The adverse rate for employment eligibility is much lower with the vast majority of candidates eligible for work Companies should think about these rates since there are many new ways to cost effectively get at information that would have been difficult or expensive to access in the past

Employment eligibility is a process that is related to employment screening We are seeing a consistent move to electronic I-9 forms management solutions Most electronic I-9 solutions also are integrated with the DHS’ E-Verify database which is not utilized by about 1/3 of respondents There’s been a lot of press, pro and con, around the success of the E-Verify program. While staying out of the debate, our experience with our customers is that 98% of new hires put through E-Verify are verified either instantly or within one day. Of those that are not, the majority are then cleared based on specific steps outlined by the DHS.

We also explored the top areas of focus relative to screening program enhancements. The results were relative diverse, we did see: About 1 in 7 respondents looking at revising screening standards About 1 in 10 planning to review contingent workforce policies, which is good given the % of companies that don’t screen this group today About 1 in 10 looking at integrating their screening application with other enterprise applications to drive efficiency and improve applicant experience

There’s a lot in the benchmark survey so we thought we’d highlight what we believe are some key actions to consider First, take advantage of the slower hiring period, while it lasts, to improve screening program effectiveness. It’s a lot easier to change now that during periods of significant hiring backlog. When hiring does improve, the competition will probably be fierce for key talent, so fast effective programs will add to the chance of securing strong candidates. We also are seeing a trend around more regulation and oversight related to screening. Now’s a good time to ensure that your program is in compliance and you understand issues that may be ahead We recommend that you conduct a thorough evaluation of your program and plan for program enhancements in 2010 Clearly this benchmarking report is one small part of this effort Specific ways to improve your program might include: Looking to further automate or streamline your program, for example Applicant Invite or ATS integration Pay close attention to adverse action rates, lower rates may mean effective recruiting or it may mean that you should be screening more thorougly Make sure your compliance profile is understand and meets your goals as a business Finally, stay focused on the applicant experience and ensuring the best possible experience in support or your recruiting goals and brand

This was just a quick summary of the great information in this year’s employment screening benchmarking report. You’ll find a wealth of additional information in the actual report which we have available for download today

HireRight Benchmarking Report 2009 Gain insight into the policies and practices of others to help you advance your employment screening program.

2 HireRight Benchmarking Report 2009 Provides relevant information for comparing employment screening programs and practices with peers Helps organizations advance their screening program Identifies strengths and weaknesses Highlights process improvements Supports change management More than 1,400 individuals from organizations of all sizes and major industries participated Click Here to Download the FREE HireRight Benchmarking Report

3 Screening Influencers 3

4 Screening Drivers Organizations are Focused on Vital Strategic Factors Risk mitigation and policy compliance issues dominate Regulatory compliance is the key driver in certain industry segments Concern for reputation is a significant factor and is growing Employment eligibility driven by regulatory compliance first and risk mitigation / policy second

5 Screening Policy and Practice 5

6 Screening Policy Responsibility Broad Spectrum of Policy Ownership Human Resources by far the lead function Executive ownership very typical Other functional ownership typically driven by specific industry segments For example, Safety for transportation companies

7 Workforce Coverage Broad Gaps Remain in Screening Coverage Most regular new hires are screened Only about 1/3 of the contingent workforce is screened Growing rapidly Major issue for recovery Almost 1/5 of existing employees are now screened periodically

8 Screening Coverage Wide Range of Screening Options Almost all screening covers criminality Practices vary widely Area of innovation Employment and education typical Area of substantial “discrepencies” Job specific services Professional references MVRs Credit

9 Screening Timing Timing is Driven by the Application New hires Most screen before start date Remainder right after start Other groups Event based screening

10 Screening Results Programs are Successful in Finding Adverse Information Adverse information is found across all program activities Background Checks Drug and health screening Employment eligibility Companies should seek new ways to uncover adverse information

11 Employment Eligibility Rapid Adoption Underway I-9 required for US new hires DHS E-Verify program now utilized by almost 1/3 of respondents Federal and state regulations Company policy Both available via software applications integrated with screening Paper forms still most prevalent

12 Areas of Focus “Re-tooling” Screening Programs 1 in 7 respondents planning to review new hire screening standards 1 in 10 planning to review contingent workforce screening policies 1 in 10 planning on integrating screening application with other recruiting applications

13 Seize the Day! Now is the time to prepare for an economic recovery 80% of organizations forecast a stable or growing workforce over the next 12 months Less risk changing policies now than during significant hiring A ‘cold’ war for talent may heat-up quickly Increased future regulation all but certain Start by evaluating your program and planning for 2010 Benchmark your program against peers Automate programs to increase efficiency and support compliance Monitor adverse information rates to measure program effectiveness Solidify regulatory compliance and implement audit strategies Further improve the applicant experience

14 Consult the Report for More Information Learn More From the FREE HireRight Benchmarking Report 2009 66 charts with benchmarking data 43 key findings from expert analysis 27 best practices for success http://www.hireright.com/benchmarking 2009 HireRight Employment Screening Benchmarking Report – Download Now.

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