Handling Candidate Data Will Be Under the Spotlight in 2019

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Employment screening will benefit from AI, but the technology is not ready yet

By Roy Maurer, Online Manager/Editor, Talent Acquisition – SHRM Online – January 31, 2019

This is the second article in a two-part series. The first installment detailed the growing trends of social media screening and real-time employee monitoring, as well as the emerging acceptance of job candidates with criminal backgrounds.

 

Employers that conduct employment background checks will continue to feel the pressure to safeguard applicant and employee data in 2019. HR professionals will also be interested in how artificial intelligence (AI) technology will improve the screening experience, according to experts.

Data-Breach Concerns Lead to Increased Focus on Security

Data-breach protection, information security and compliance with privacy laws will be top of mind for those managing employment screening in 2019.

“The massive data breach suffered by nationwide credit reporting agency Equifax in September 2017 that impacted more than 145 million Americans—almost half of the country—was a wake-up call for all industries to improve their information security,” said Les Rosen, founder and CEO of Employment Screening Resources, a background-screening firm in Novato, Calif. “The need for background-screening firms that handle the personal data of job applicants to ensure information security has become mission critical.”

[Visit SHRM’s resource page on background checks.]

Montserrat Miller, an attorney in the Atlanta office of Arnall Golden Gregory and co-chair of the firm’s privacy and consumer regulatory practice, advised HR professionals to ask their screening partners how they are safeguarding personal data and what their notification protocols are in case of a breach.

“In addition to following the Federal Trade Commission guidance on the proper data-security practices, businesses that utilize a consumer reporting agency for their background-screening services should be sure to partner with one that has achieved accreditation with the National Association of Professional Background Screeners,” said Christine Cunneen, CEO of Providence, R.I.-based background-check company Hire Image.

Rosen said that employers should also consider using background-check firms that undergo an annual Service Organization Control, or SOC 2, audit from the American Institute of Certified Public Accountants to ensure high standards for the protection of privacy, security and confidentiality of consumer information used for background checks.

Miller added that “if HR prints the background-check reports for whatever reason, [the printouts] should be maintained in a confidential manner and not shared with anyone outside of the appropriate decision-makers.” She added that in accordance with the company’s data-retention policy, background-check reports must be disposed of properly, by destroying or erasing electronic files or shredding, burning or pulverizing paper documents.

Organizations conducting background screens of citizens of the European Union (EU) will also have to be mindful of the EU’s General Data Protection Regulation (GDPR), which took effect in May 2018. The law requires that employers receive consent to process a subject’s data, ensure that collected data is made anonymous to protect privacy, make data-breach notifications, safely handle the transfer of data across borders, and in some cases, appoint a data protection officer to oversee compliance.

“If an employer in the U.S. has international operations, and if there is going to be any exchange of personal data from employees in the EU to the U.S., then it needs to be aware of GDPR and needs to make sure it is in compliance with it and that its vendors are in compliance with it,” Miller said.

The maximum penalty for noncompliance is up to 4 percent of an organization’s annual global revenue or 20 million euros—whichever is greater.

AI Improves Background Checks But …

The use of technologies such as AI, machine learning and automation will enhance background checks in 2019, but humans still need to be involved due to discrimination concerns.

“Background screeners haven’t fully adopted AI in the screening process yet, but we are seeing signs of it where screeners continue to automate their operations,” said Jason Morris, an employment-screening consultant and industry expert with Morris Group Consulting, based in Cleveland. “In the past, we would simply throw people at processes and increase our labor for searches,” he said. “Now AI allows us to automate and put machines in places of seats, allowing for a faster and in some cases a more accurate background check. It’s exciting to see screeners innovate, and I’m confident you will see AI continue to grow in the industry.”

Conal Thompson, chief technology officer at background-screening company HireRight, said that AI will play a major role in the employee screening and recruitment processes by reducing the time to hire, improving quality of hire and improving the candidate experience.

“In today’s competitive labor market, in which a positive candidate experience in the screening process plays a major role in candidates’ decisions to accept job offers, utilizing AI to interact with job applicants faster and more effectively can make a real difference,” he said.

“Without a doubt, cutting-edge technology like AI plays a vital role in what we do to enable companies to outsource social media screening in a smarter, cost-effective and efficient way,” said Bianca Lager, the president of Santa Barbara, Calif.-based Social Intelligence Corp., a leading provider of social media screening reports. “Things like finding where people are creating content online and zooming in on places and types of content that could be risky for an employer are what AI is effectively delivering right now, which is a huge time and resource saver.”

Rosen added, “While there is no doubt AI technology and automation increase productivity, streamline processes and reduce turnaround time in the screening process, background checks still need a guiding human touch until sufficiently nonbiased AI algorithms can be created to ensure that discriminatory hiring decisions aren’t made.”

Since the AI buzz began, experts have been saying that “biased AI” can be created by algorithms shaped by human prejudices or insufficient data.

“Human augmentation is still incredibly important,” Thompson agreed. “Employers should keep in mind that most AI learns as it goes, which could present risks and have unintended consequences on the screening process. For example, if an AI application, after reviewing thousands of candidates for thousands of jobs, realizes that a significant number of candidates it has recommended has certain demographic attributes, it may bias its own algorithm with a preference for candidates who first meet those criteria.”

In addition, Lager cautioned HR buyers to be aware that just because a company markets itself as providing AI and machine learning doesn’t mean that it’s true. “Companies are taking giant liberties with those words as descriptions,” she said. “The key is to understand the limitations of that technology and how it affects the deliverable of the service or product you are buying. It is imperative to ask questions about consumer compliance with the Fair Credit Reporting Act and how data is acquired.”