There was no shortage of significant obstacles facing CRAs in 2020. The social and economic impact of the COVID-19 pandemic was widespread, including in the court research industry that is essential for background screening. As courts closed down or severely limited capacity for months, it became more difficult than ever for teams to get the data they needed, when they needed it. Even as courts reopened, they did so slowly with little consistency across the industry.
As we exit the height of the COVID-19 pandemic, adjusting to changed circumstances is essential to growth. CRAs have a renewed focus on efficiency, although navigating court research obstacles requires that they continue to adapt to the rapidly changing landscape of public records research. Appriss Insights recently hosted a webinar featuring CRA industry leader Kevin Bachman and members of our operations and business development teams, and moderated by Appriss Insights Senior Director of Marketing Krisy Bucher. The panel discussed the challenges facing CRAs after the pandemic, the growth of the background screening industry, changes to court access, and factors involved in operations efficiency. You can watch the entire webinar and read short excerpts from the conversation below.
Kevin Bachman – “The CRA Doctor” and host of the Background Check Radio podcast
On industry changes after a challenging 2020 for CRAs:
The challenges of the last year have taken some of the industry trends, which have been advancing at their own speed, and really accelerated that rate of change. The rate of change is one of those areas where every shop is approaching it a little bit differently. More and more CRAs are becoming technology companies, but not all entirely by choice. Some are rushing into it, and for certain see it as a way to grow their business or rebound from last year, but others are being dragged into it. So, everyone is moving in that direction, but not all for the same reasons. When it comes to operational fulfillment, that “build versus buy” concept, if I'm a shop, and I'm using technology from someone else, I need to make a set of decisions. If I buy it as needed, or I use it incrementally, and it's a partnership, then I never own it but it's a lot less expensive on a day-to-day, week-to-week, month-to-month basis. If I build it, I own it – but I'm also on the hook for all the upfront costs. So, each company has to make the best decision for them. And it's not as clear-cut as it seems.
I think the pace of outsourcing public records research is accelerating, and I don't think we're going back. There are a few reasons why. First, there are simply more data providers and vendors that can support CRAs compared to ten or even five years ago. So, I think the quality on the supplier side is increasing. Before then, if you were going to do anything, you had to do it inside of your four walls. But take all the things that are really hard to do when running a business, even in the best of times: Hiring, staffing, training, managing, starting all over again when employees leave, and it becomes nearly impossible when you have no idea what your business is going to look like. It's good and bad when we think of forecasting. If I have a hand sanitizer client, their business tripled in 2020, and it becomes hard to run my business because their business tripled. I, as a business owner, wasn't ready for that. But maybe I had the outdoor entertainment company, and their businesses was down 90%, and I didn't know that, so it's hard on either side of the issue. As a business owner, I'm not going to try and forecast the future and keep all this payroll on my books because I want to run everything myself. No, thanks — I'm going to have somebody else take that risk, and I'm going to pay him incrementally for it. When we look at 2021 and 2022, once CRAs take that leap (and a lot of them have already), you can make an assessment of whether it works. And if we assess that it is working, I just don't know how many of them are going to switch back. I think it is just too appealing a solution.
Chad Lafon – Strategic Market Development Leader, Appriss Insights
I think we know automation is here to stay. It's not going away. So, you need to embrace it. It is as good or better than the traditional ways of on-site, and many times, it is the only way. So, leveraging automation is going to continue. What we have also seen, even the people who want to do the work in-house and use their own runners, what we find is, they can't consolidate the volume, like an Appriss or a larger national provider can. So, for the same county yes you can do it yourself, but your cost is going to be higher because you don't have the volume purchasing power than say an Appriss does in the same.
Considerations for CRAs shifting to a subscription model:
First and foremost is their volume management. There will still be volume tiers and there will still be cost as a CRA scales its infrastructure for automation. But if you know data is available in an automated fashion, you can get the most real-time, up-to-date data, and you can put that into the areas and counties where you can maximize your savings. From there, you can just do the math. We will help them and have helped them to do the math – we show them the cost of a transactional model vs. volume in a flat model. The beautiful thing is that CRAs are not locked in to one model. They can choose transactional here, if that's to their benefit, and choose flat right here, if that's their benefit, and feel free to mix and match to your benefit. That's the difference – we are ultimately putting the power back into the CRAs' hands and make the best decision for them.
Jeff Larosa – Senior Director of Operations, Appriss Insights
On the challenges of managing quality when checking records:
One of the primary challenges is the opportunity for human error. Any time that you automate something, you're going to want to look at it for two main reasons. To both reduce that risk of human error and for scalability reasons. So, when we look to automate, we are really looking to keep things consistent. As you all know, sitting in front of your computers for eight hours a day working remotely, it's very difficult to look at a screen constantly. Now imagine applying that to reading records and having to do that work manually. Where we have to do that, we certainly implement high levels of quality assurance checks where we have to do manual reviews, but we certainly are constantly looking for ways to automate. We have a team dedicated to looking at our process and ways to automate so that we can reduce that risk.