The Evolution of Risk Management: From Background Screens to Continuous Monitoring

Insider threat is a challenge facing organizations across the United States. For example:

  • Employee theft accounted for one-third of the $46.8 billion of U.S. retail inventory loss in 2018 (National Retail Federation).
  • There will be more than 10 million arrests made in the United States this year.
  • According to the U.S. Chamber of Commerce, “crime may be a factor in as many as 30% of business failures.”
  • A study from the Department of Health and Human Services found 16% of employees at Medicare nursing facilities got a criminal conviction after being employed.

In this Article: 

  1. The History of Background Screening

  2. Introduction of Periodic Rescreening

  3. Emergence of Continuous Criminal Monitoring


The background screening industry emerged in the 1990s as a response to risks like these. The industry continued to evolve as new technologies—and new threats—demanded innovation. Companies dependent on one-time, pre-hire background screens on employees began to transition to periodic rescreening. Today, new continuous monitoring products have created opportunities to further reduce risk and make our workplaces and communities safer.

The History of Background Screening

The standard background screen verifies a person’s fitness for employment by confirming their employment history and checking for recent criminal activity. According to the National Association of Professional Background Screeners (NAPBS), 96% of U.S. employers conduct background screens.

Background screens rose in popularity in the 1990s in response to two emerging trends. First, a rise in high-profile cases of workplace violence.  The early 1990s were some of the most crime-ridden in recent history. In the past five decades, the national violent crime rate has never been higher than it was in the early 1990s, according to FBI statistics.  Moreover, there were more than 1,000 workplace homicides annually from 1992 – 1995, according to the Bureau of Labor Statistics (in 2016, there were 403).

This rise in workplace violence coincided with a growing awareness of employers’ liability to negligent hiring claims. Negligent hiring is a legal claim made against an organization for not properly assessing the risk an employee poses to the safety of the workplace. It wasn’t until the late 1970s that these claims became common options for impacted employees. In a variety of cases in the 1990s, including a vacuum cleaner manufacturer, a nursing home, and a furniture company, negligent hiring lawsuits cost companies hundreds of thousands of dollars.

A formalized background screening process was developed in response to these two trends. A background screen promotes public safety and reduces organizational risk by alerting employers to applicants who pose a threat to their company, reputation, employees, and customers. Critically, background screens look only at historical information. They are effective only up to the time of the screen.

Pre-hire background screens catch historical criminal activity, but nothing following the date of hire.

While the pre-hire background screen is a crucial risk management technique, it leaves organizations exposed to threats from existing, already-screened employees. With a median job tenure in the U.S. of 4.2 years, companies need to do more to mitigate risk during employment.

The Introduction of Periodic Rescreening

To promote better workplace safety, many background screening companies began marketing periodic background rescreening to high-risk companies. A rescreen is fairly similar to the pre-hire background screen: employee names are searched against relevant datasets to find potential criminal activity, driving incidents, and sanctions that occurred after the employee was hired.

Periodic rescreening catches historic criminal activity at the time of the background rescreen

Periodic rescreening was adopted mostly by companies in regulated or high-risk industries. Healthcare organizations, transportation companies, and financial institutions both commonly rescreen employees. But rescreening is relatively expensive, and still leaves employers exposed to risk. If a company rescreens its employees every two years, and an employee is charged with theft two days after being hired, the company would not know until the rescreen is run. Just like a pre-hire background screen, periodic rescreens only capture criminal activity at the time the search is performed.

Periodic rescreening has yet to see broad adoption in the United States. More than half of employers do no type of rescreen, according to HireRight’s 2018 Employment Screening Benchmark. Of those that do, employees are typically only rescreened in unique situations, like promotions to a new internal position.

Periodic rescreening introduced another step forward for the background screening industry, but the drawbacks left plenty of opportunity for new post-hire solutions.

The Emergence of Continuous Criminal Monitoring

Over the past few years, a variety of background screening companies introduced “continuous monitoring” products. Initially, these products were an extension of the periodic rescreen. Rather than re-search an employee’s name against a national criminal file (“nat-crim”), entire employee lists were uploaded into systems that produced an alert when a new entry in the nat-crim dataset matched employee information in the uploaded list.

While this gave the impression of immediate insight into potential criminal activity, the underlying datasets suffered from inadequate scope and timeliness. Many nat-crim files have gaps in geographic coverage and in some cases are not continuously updated with new data.

Continuous monitoring alerts you to criminal activity in real time, throughout the duration of employment.

These issues were solved with the introduction of the first true continuous criminal monitoring product by Appriss Insights: Risk Intelligence. Powered by the Appriss Insights Platform, the nation’s most comprehensive, timely incarceration data network, organizations can now be alerted in real-time of potential criminal activity among their employees or volunteers.

Criminal monitoring products are effective only when they return an accurate, timely alert on potential criminal activity.  When a monitoring product is built on a nat-crim file, the “matching criteria” is typically limited to publicly-available information: first name, last name, and date of birth (although matching criteria can vary between providers).

This limited matching criteria can result in more false positives – alerts about criminal activity from individuals not associated with the organization, but with somewhat similar names and dates of birth. At a minimum, this results in higher false positives, which leads to higher operational costs. Improperly managed, incorrect H.R. decisions and future litigation are both possible.

Appriss Insights’ continuous monitoring product is built on a network with a larger set of matching criteria: first name, last name, date of birth, social security number, driver’s license number, and zip code. This approach reduces false positives and the risk of litigation.

Continuous monitoring is a critical evolution in the background screening industry. It will keep companies safer from fraud, theft, and reputational damage.  Each of these represents a real cost to businesses. The average dollar lost for each insider retail theft is more than $1,200. Bad reputations cost companies at least 10% more in hiring costs. One study estimated that nearly 80% of customers will change their mind about purchase decisions after encountering negative publicity online.

Most importantly, it will keep employees, customers, and the broader public safe from malicious actors.

It’s been exciting to see the background screening industry evolve over the past 25 years, and I can’t wait to see what’s next.

Jason Morris, Founder, Morris Group Consulting LLC


Jason Morris, Founder, Morris Group Consulting LLC

A veteran screening and risk management professional, Jason Morris founded the Cleveland-based EmployeeScreenIQ, a global leader in employment screening, in 1999. Morris served as the EmployeeScreenIQ’sPresident and Chief Operating Officer until November of 2015, when the company was acquired by Sterling Talent Solutions. Morris went on to serve as Sterling Talent Solutions’ Senior Vice President of Client Success and was a member of its M&A team until October 2017. Morris served as the Co-Chairman of National Association of Professional Background Screeners (NAPBS) from 2005-2006, making frequent presentations to government agencies, including members of the U.S. House of Representatives and the U.S. Senate. He has also lobbied on behalf of the screening industry and has consulted with officials from the Federal Trade Commission (FTC), Department of Homeland Security (DHS) and the U.S. Department of Justice. Morris continues to be active in the organization today. Morris frequently serves as an expert witness on the topics of background checks, employment screening, human resources and the Fair Credit Reporting Act (FCRA). He is also a licensed private investigator in the states of Ohio, Illinois, New Jersey, Texas, Arizona and Nevada. Morris is a graduate of Kent State University and currently lives in Cleveland, Ohio with his wife, two daughters and three dogs.

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