Unlike a SaaS product or physical offering, background screening costs aren’t always as straightforward as one would think. This can be a point of confusion for some organizations that are just getting started with their screening processes.
While screening packages can be assigned a fixed cost, pricing can still be variable from state to state due to certain access fees encountered by all CRAs. Accounting for these fees in a blanket pricing model is very difficult and will usually leave the organization paying more than is necessary for their screening solutions.
For this reason, additional access fees are typically passed directly on to organizations in addition to their package pricing. This is standard practice in the industry.
The purpose of this article is to bring more clarity to these fees and how they are incurred.
What Screening Products Encounter Fees?
The three main screening products that often encounter fees are:
- County Criminal (or Civil) Searches: County searches often encounter court access fees. The cost of these fees depends on the court, and some courts don’t charge a fee at all. All CRAs are subject to existing fees and will have to pay them in order to retrieve county court information.
- Employment Verifications: Many large employers such as Walmart and The Home Depot partner with a service known as The Work Number (an Equifax company) to handle employment verifications for them. In many cases, The Work Number holds employment data exclusively, and employment verification can not be achieved through other means. The Work Number charges access fees to all parties, including CRAs.
- Education Verifications: Similar to The Work Number, some institutions opt to send their enrolment and graduation data to third parties, such as the National Student Clearinghouse, and refer all verifier services to those sources. There is typically a fee for such third-party sources.
How much are access fees?
Court access fees are variable. Some states, such as Washington, Idaho, and Georgia (as of 2023), don’t charge any fees for access. Some states charge 2-5 dollars (depending on the county court searched), and some states, such as New York, charge a whopping 95 dollars depending on the county. As stated before, these fees are inherent to the industry and, in most cases, completely unavoidable.
The Work Number fees continue to increase, a subject of mild concern for CRAs. The Work Number fee is settling in between 80 and 100 dollars (a fee that was under 25 dollars just a couple of years ago).
Third-party verifiers such as the National Student Clearinghouse typically charge around $25 to verify an education. This is often dependent on the price set by the institution.
Can access fees be avoided?
The short answer is usually no.
When only one reliable source of information is guarded by an access fee, that fee simply needs to be paid.
In some cases, with employment, for example, information held within The Work Number can be verified elsewhere. However, this is typically the exception.
It’s also worth reiterating that not all county searches or verifications will be met with a fee, but many will.
Can Fees Be Built Into the Pricing Model?
Yes, but it’s very difficult to do so effectively. Here’s why.
Let’s say a CRA is quoting an organization headquartered in Connecticut that hires about 5000 workers nationwide each year and is including fees in the pricing.
Given that New York county criminal searches typically incur a 95-dollar fee, the CRA will likely weigh that fee fairly heavily in its pricing given the proximity of Connecticut to New York. If the CRA does not adequately account for such a fee, they could find themselves upside down quickly.
Therefore, it is more likely that the organization will experience a higher cost per background check with fees baked in than they would otherwise pay if the fees were simply passed on. This is because the CRA assumes a fair amount of risk providing a fixed cost with fees included.
It is also possible to make dynamic adjustments to pricing based on geographic hiring models, but such a process often counteracts the simplicity of a fixed cost.
In short, it is simpler and more cost-effective for fees to be passed directly on.
Takeaways
Looking at an invoice that clocks in higher than expected is never fun. For this reason, we are very up-front about fees here at Peopletrail. It’s important to know that all screening providers experience fees, and they are most often passed directly on in addition to the standard price of the solution. In most cases, nothing can be done to avoid them. However, choosing a screening provider that keeps you aware of new and existing fees while providing transparent invoices can help you avoid unwelcome surprises.
Feel free to contact us with any questions.
