Shownotes
Hiring somebody could either break or make the company. There has to be an assurance that the person you hire is someone who they say they are. You have to go through a number of credentials and background checks to ensure their honesty and to know whether they can deliver well for the job. It helps to hire the right person in the first place, though this can be tough to do. Lori Denham is the founder of Guardian Background Screening, a full-service background screening company. Lori has all the details when it comes to doing pre and post-employment background checks. She takes us down into the processes as well as provides some notes and advice on the necessity of undergoing through the screening.
Lori Denham on Hiring The Right Person With Background Screening
We have Laura Denham on the show. She’s the Founder of Guardian Background Screening. Laura, thanks so much for being here.
Thanks for having me, Bob.
Tell me a little bit about your business and who you serve.
We are a full-service background screening company. We do pre and post-employment background checks. We do tenant checks, volunteer background screening, drug screening, aptitude and integrity testing.
Is there a requirement to do those types of testing now in the workplace?
No. However, the aptitude and integrity testing for the small business owner is a way to figure out if this person is going to be a good fit. Are they going to waste time on the computers? Do they have abusive tendencies? Do they have leadership potential? This is an affordable non-DISC way for small business owners to get that information.
Circling back to the background checks and other services that you provide for the business owner, you also work with nonprofits. Is it mandated that you do?
None of it is mandated for me.
I had a clearance way back in the military. To serve in my field, I had to have a clearance.
That depends on where you want to work. Obviously, in the military or government, there is a requirement. Any local government, there’s typically background screening required.
For the rest of the world, it’s a voluntary elective pursuit. When a business engages you to do a background or any of the services that you provide, what’s the general motivation of that business owner? What’s the typical benefit to them?
They are looking to trust the person they’re hiring and make sure there’s nothing lurking in the background that’s going to be a surprise down the road. Perhaps they work with vulnerable populations or sensitive information, and they want to make sure that the person they’re hiring is not going to take advantage of either of those situations. Whether it be abuse, neglect and maybe they don’t have the credentials that they said they had. It’s a high-fraud area of resumes, saying that they’ve graduated with degrees or have had jobs that they’ve never done. For the employer, I’m ensuring that who they’re hiring is who they say they are.
As an applicant, I said I went to Vanderbilt and I put that on my resume. There’s some database that you go to verify. Is that available to everybody? How does the data retrieval to verify work?
Yes and no. There are a lot of colleges or schools that have stored their information with a vendor who then charges us to retrieve it. If they don’t use that service, then anybody can call the registrar’s office. Sometimes they have to pay for that verification, sometimes they don’t. It depends on what level of education they have. It’s to make sure that you’ve graduated with either the diploma or the degree that you’ve said you’ve graduated with.
What set you on this track to start this business?
When we moved back to Colorado, I had my life and health insurance license and I did not want to keep that up. I didn’t enjoy the industry at all. I fell into background screening and learned it from the operations up and got hooked on the compliance. I got hooked on serving nonprofits, churches, youth, and camp, and understanding that they couldn’t afford to protect and that’s where predators come in.
Unfortunately, there’s been a great deal of press recently about past abuse. If I’m an at-risk group, whether it’s a nonprofit or camp or at-risk youth, what’s their motivation when they come and use your service?
Background Screening: The motivation of our clients is to potentially protect their reputation.
The motivation is most of their people are not staff. They’re usually volunteers, which is the other loophole that predators take advantage of. The motivation of our clients is to potentially protect the reputation. They’ve built this organization for a purpose. Whether it be a church or a ministry or a nonprofit, somebody built this. It only takes one instance to throw it all away or have a marketing nightmare. Most of those organizations don’t have the funds to turn that around. That means their door shut. They lose donors and clients, whatever that case may be. The motivation is to help them weed out those potential risks. It doesn’t mean that a volunteer may not be able to work with that organization because all of them have hearts, but perhaps there’s a better place for them to volunteer. It’s not with the vulnerable population or intellectual property or bank accounts. It helps them evaluate.
Folks may think that it’s about them protecting their reputation, but at the end of the day, it’s about protecting those kids and that at-risk population.
That’s where my heart lies, making sure that we weed out as much risk as possible.
You do some special projects when you’re working with nonprofits. Let’s dig into that a little bit.
Most of the time, nonprofits cannot afford to do a proper background check. I get in there and work with them as far as, “Who do you work with? What types of staff or volunteer come into work with your clients? Does your insurance company require anything?” Are there some requirements you have to cover? Are there requirements in your safety policy that you need to cover? Let’s try to get as much of that covered through background checks as you can. Those cost a lot if you do an absolute top-notch background check, you could run into hundreds of dollars.
We work with a plan that gets them the best coverage. Sometimes it means that the applicant’s paying for that background check, sometimes it could be a split. Sometimes it’s cost effective enough for the nonprofit to take on the fee itself. Once that happens, any services that those nonprofits purchased through us, we revenue share 5% back to them. It becomes another stream of income. We go above and beyond protecting them to also creating a revenue stream for them.
If you go through a background check for your population of employees, that stays the same. Let’s say somehow, they go, “Did you know?” “No, I didn’t. It didn’t show up. Why?” There are some bits of information that doesn’t show up, why is that?
There are probably well over 1,200, 1,300 consumer reporting agencies, which is what we are. Every one of us interprets the Fair Credit Reporting Act differently. Our interpretation coupled with our attorney’s recommendations for how we report and follow determines what shows up on a background check. For instance, the standard is a seven-year look back reporting everything. There are some agencies who will only report convictions. If they were arrested last year, it wouldn’t show up on the report because it wasn’t a conviction. It also depends on that state’s laws that have been grandfathered into the Fair Credit Reporting Act and that’s who governs us. It all boils down to interpretation and the consumer reporting agencies’ tolerance for risk.
From the benefit to the employer that goes down this road that says, “I’m going to make it part of my budget to make sure that I’m protecting my customer and employee base,” are you finding greater acceptance or more pushback?
There are far more acceptance these days. However, in our State of Colorado with recreational marijuana, I’ve seen a lot of employers pull back parts of the drug screening. They would much rather not know that THC is showing up and only test for that post-accident. That’s where I’ve seen the turn. Unfortunately, in Colorado, the unemployment rate being so low, there’s a feeling of lack for filling those open positions.
When they do the background screening, CBD doesn’t show up at all?
If they’ve been arrested for it.
When you’re working with an organization and the employees know that they’re going through a background check, what’s the typical reaction from the employee that’s having the background check?
Most of them know it was commonplace. If they know there’s a drug screening on top of that, you may see them accept the position but not go through with it because now they know they have to go through a drug screening. The applicants know that it’s industry standard. I don’t see a whole lot of pushback. I see a lot of, “I had a background screening done over here. Can’t they use that?” No, because when you signed your authorization, the authorization was for that company to do that.
Start with a why.
You’ve been in business for how long?
We are about a year and a half old now, but I’ve been in the industry almost four.
You were working in the background. Take me to that thought process when you’re going, “I’m going to do this myself.” What was that dialogue?
It became a passion when I saw that I loved the compliance. I loved educating the organizations who typically can’t afford good risk mitigation. I found a way to add my philanthropy to it. Other business owners aren’t excited about giving theirs away, so I thought this was a perfect way for me to put the teacher out there, have a viable business educating my clients, and also be able to give back and make a difference in the community.
You have the requisite background skills and tax ID. You’ve gone through all the fun stuff. Looking back at the first series of steps that you took over the first three or four months, what were those like?
A little chaotic, especially mentally because your brain’s going, “Did I do this? Did I check that off? What’s first?” I stopped, got a calendar out and I went, “Let’s get my name out there. How do I do that?” I started with a lot of networking. I did a couple of expos. One was a soft launch in a market that I lived in for twenty years back in Reno. I could see what kind of questions we would get, what kind of feedback, who’s going to stop and is there an interest? That was a great way for me to get some marketing underneath my belt in a test market. I came back here and did a women’s expo. That was incredibly successful. I still have three or four clients from that that I did. That taught me that industry-specific expos were the best way for me to meet, have a great conversation, let people ask questions, and then follow-up. I created a social media marketing plan as well. I have contracted a social media manager to help me stay on top of that. This will be very good for her to integrate into our system.
At the end of the first six or eight months, did you meet your goal on clients?
I would say I’m still shy of that, but what I had was a lot of solid information of what worked and what didn’t work. What worked best was the face-to-face, the personal networking and follow-up. I’m not a pushy salesperson, I’m more of, “Let me educate you whether you use my service or not. At least I’m out there and I’m happy to answer any questions that you have.” I always take something positive from it. I either learn or I win. I like the winning part. That’s how I looked at all those, not as failures but. “I gathered a lot more information from that. I now know not to do that.” You had sent me a great question that made me think about what was something that I absolutely said yes to that I should have said yes to. One of that was too early on, I signed on a lead generating company. They were very excited to work with me because I did not have a typical message because of my give back. Would I do it? Yes, probably later. Not as soon as I had brought that into my organization. That was an expense that I haven’t recovered yet, but a great learning one at the same time.
Background Screening: Take something positive from any situation. You either learn or you win.
What does your prototypical client look like?
Typically, our nonprofits are established, whether that be a church, nonprofit, faith-based ministry or youth camps. They have been established and they’ve got three-plus years probably under their belt. They have well over 50 volunteers. The staff can fluctuate between five plus, but it’s heavily volunteering. I work with them to not only background check their volunteer but have a recheck program. If your volunteers know they are being rechecked, another loop has closed for those potential predators to pop into your organization.
Let’s say on the nonprofit, I’ve got 50 people that I want to take in and use your services for. What should I anticipate the range of expense?
In Colorado, I offer a $16 nonprofit pricing. That gets them their database search, that gives them their sex offender registry search of all states, and it also gives them a State of Colorado report. The reason that is important here in Colorado is most of our counties do not report into that database search.
Let’s say there’s a Board of Advisors in that nonprofit, what’s the board’s reaction to the service and the expense?
It’s either, “That’s all you’re charging? Or what’s missing?” I’ve purposely priced my services for these organizations because they’re underserved. I believe they need to get as much protection for those children or vulnerable populations as they can. Most of it is a shock.
Let’s say I’m that organization, I’ve got my 50 volunteers for this year. We go through the process and we are sitting here and then we start a new year. Is there a protocol where they redo it every year or every quarter?
That’s where we talk about their safety policy. I don’t write the safety policy, but I help them with the questions. I have a link that I send them. There is an organization out there that publishes a great safety policy as a template. We put something into writing that says, “If you’re working with kids, you’re going to be rechecked every year, two years.” Two years is probably as long as I would go. If they’re working with the organization’s finances, I would make sure we were doing at least annual checks especially on the credit or civil where we can see if there’s any miss going on.
I don’t know if you’ve been in the circumstance when you’re talking about the board where they have their legal counsel there. I would be interested to hear about the reaction when you’re sitting there, and legal counsel is opining away. What do they say typically?
They don’t say much until I’m gone. That’s mostly because they’re mulling over the conversation or perhaps that organization didn’t think through the safety policy and their liability. Some of them bring on other organizations to do the volunteer work. If they don’t background check those organizations and something happens through that onsite visit, on your behalf, that’s still your name. They don’t think about the liability that happens even if you use an outsourced volunteer base. They’re silenced because they haven’t thought through the whole process.
That’s a whole lot better than the expense and embarrassment. Maybe you don’t get them all, but you at least avoid the obvious.
We’re not going to catch every one of them but if something happens, and if you’re brought to court and you can show that you have all these policies and safety procedures in place and you’re following them and not making exceptions, then you’re going to fare better in that legal setting than the, “I wasn’t aware. I didn’t do it.”
Given the world of information that we live in, what’s the biggest pushback why they don’t do it?
It boils down to money.
In my mind, that’s an inexpensive deductible.
It is but when you’re nonprofit, whether you’re a church or a plain nonprofit, it boils down to not budgeting for that protection.
Learn by doing.
It seemed to me if you had a nonprofit organization with kids, parents would GoFundMe that in a hurry.
My perception and opinion are the pushback usually boil down to funding. One of my clients did up their budget after talking with me. They didn’t have to up it a lot, but when they realized they were not getting the coverage they thought they were getting, that sent them into a little bit of a panic, the fact that they weren’t being compliant with some of their stuff and not keeping things under lock and key.
The parents that have had their children go into these nonprofits, are they aware whether background checks are done in that organization or not?
Sometimes yes, but mostly no.
As a parent, I’d be interested. I would feel at some level better knowing that that was in place. If I’m the parent out there and I’ve got kids in any of the nonprofit space, what’s the question I should ask? Who should I ask it to as to whether there’s background information in diligence being done?
Your managers there should know. If not, your executive director should be able to tell you if background checks are being done and who they’re being done on. I happened to know there’s a school district in Colorado that does not do background checks unless it is federally mandated. It’s because they are big and it’s too costly. I have nothing to say other than talk to me.
What if the folks are in Texas or somewhere else besides here, can you do what you do nationwide?
Yes, we can even do international. There are a lot more hoops for some countries and they’re not very instant. In some cases, they could be months long. Internationals aren’t as common, but we can do them.
If I was that hypothetical nonprofit and I’ve got 50 folks that I want you to run through the hoops, what’s the typical timeframe from beginning to end for deliverable?
Most results happen within 24 hours. Depending on the level of...
