How HR Pros are Benefiting from Outsourcing Employment Verifications

When your employees apply for things like a mortgage, new apartment, or credit card, they provide information about where they work and how much they earn. By signing the application, they’re giving permission for the company to verify this information with you. Debt collectors also do this, as do government agencies, such as the unemployment and immigration offices. When employees sign an application for a new job, they’re usually granting permission for the prospective employer to contact their previous employers. When organizations contact previous employers either verbally or in writing, the information requests are collectively called employment verification requests.

For a variety of reasons, the volume of these various verification requests has skyrocketed during the global pandemic. As an HR professional, you may be spending more time fulfilling requests and understandably want to determine the most efficient and cost-effective way to get the work done.

The Employment Verification Process

Historically, the employment verification process has not been considered a strategic function. It is performed more as a courtesy to the requestors and applied as an employee benefit. However, it requires the company to invest in building specialized knowledge that applies only to this process, such as guidelines regarding the release of information, an internal credentialing process, and response timeframes to adhere to. If you’re the person fulfilling these requests, your role becomes critical in performing these tasks while following the operating procedures established by the organization.

While you could apply judgment when responding to verification of employment and income requests, there are a limited number of scenarios that require different solutions. For that reason, it is the perfect function to outsource to a third-party provider with expert knowledge in this area.

Benefits of Outsourcing

Outsourcing the employment verification process provides the opportunity to take a non-strategic task that adds little value away from you as an HR professional, so you can use your time to focus on more strategic functions instead. It also eliminates the investment in special knowledge and the critical dependency it creates. Outsourcing firms have a variety of subject matter experts that maintain specialized knowledge required for each service offering.

The project of transitioning to an outsourcing firm requires you to decide and document exactly how you want each type of employment verification request handled. This is a good exercise to complete because it forces you to define a set of rules that are applied consistently to all requests. Having a third party fulfill requests also reduces the chance that someone at the company would make an exception for an individual based on personal relationships. During an implementation project, you would also identify the specific data elements you would provide to the outsourcing firm to fulfill requests. As an extra safeguard, you can withhold any data you don’t want to be shared with third parties, such as termination reasons. The outsourcing firm can’t share what it doesn’t have.

The clear documentation of the rules, increased consistency, and extra protection against disclosing information in error significantly reduces the overall liability associated with employment verification requests. Best of all, outsourcing employment verification is often funded through credit cards and other fees that certain requesting organizations pay. In other words, it won’t cost you a thing.

Bottom Line

It’s hard to imagine a business process that’s a better candidate for outsourcing than employment verifications. The process has all the characteristics of something you would want to outsource and takes advantage of the benefits that outsourcing provides. The result is a better solution — better documentation, increased consistency, more protection against disclosure errors, and less liability — all at no additional charge.


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