HR Tech Interview with Elizabeth McLean, General Counsel at GoodHire

Journey into Tech

Tell us about your journey in this space and how you started at GoodHire.

I have been with GoodHire for 6 and a half years and worked in the compliance space for eight years. Before GoodHire, I worked as an Attorney at Hirease Inc. where my responsibilities included​​ monitoring internal procedures to ensure compliance with all industry-related laws such as EU/Safeharbor (which was then still valid), the federal Fair Credit Reporting Act (FCRA), etc.

At GoodHire, I’m responsible for making sure we stay abreast of compliance issues related to the background screening legal landscape, and enhance our products to ensure our compliance by design approach flows through our entire suite of products. With all of the legal and regulatory changes happening in today’s hiring environment, and in the data privacy sector, my team and I make sure we’re staying on top of legislative trends and monitoring pending legislation and new laws affecting employment screening and the customers who use background checks in their hiring processes. As laws and regulations change, we update our background check processes to keep pace, put our customers ahead of the compliance curve, and educate them on how to best position themselves for compliance with the ever changing legal landscape. 

What were the major challenges that you dealt with during the pandemic months? How did the pandemic influence the new trends in applicant checking across the US?

With many workplaces going remote, conducting background checks on candidates became more challenging because all of a sudden your talent pipeline may include candidates located in states where you’ve never hired anyone before. Our own survey shows that 85% of Americans prefer to apply for jobs that offer remote flexibility. But some states, counties and cities have different screening laws, which makes compliance tricky. A one-size-fits-all model became less viable for employers who responded to the emergence of a remote workforce. Companies need a trusted screening provider to help them sort out and manage the different screening laws and regulations in all of those locations. GoodHire makes that process as frictionless as possible for our customers. 

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How do employee background checking processes influence hiring and recruiting benchmarks in a company? Is it a cost-effective process to focus so much resource and time on background checking? Please elaborate.

Background screening policies and benchmarks can vary widely depending on industry, location, risk tolerance, and other factors. It’s a best practice to measure metrics like turnaround time, time to complete, number of checks, cost per check, adjudication results, discrepancy and dispute rates, and productivity. 

As you evaluate your screening program’s costs versus benefits, you’ll want to consider your organization’s tolerance for risk. Employee background screening helps you build a team you can trust, and create a safe, secure workplace for your employees and customers, while also protecting your organization against liability claims. In some industries, criminal background checks are required by federal and/or state laws. If your organization has a system in place in which background checking is simple and always compliant, you will hirie and operate much more efficiently and cost-effectively, while mitigating potential risk, both financial and reputational, to your business. 

New DOB Restrictions are taking effect in California. Could you elaborate on these restrictions and how it impacts employers?

Recently, some California counties began redacting date of birth from court records accessible via public access terminals. Our opinion is that the date of birth (DOB) redaction can severely slow the criminal background check process, and removing DOB from court records creates challenges for background screening providers and employers. Because court records rarely include Social Security numbers, background screening companies often use the DOB, in addition to other personally identifiable information (PII)  to verify that a record belongs to a screened individual. Barriers to accessing DOB and other PII  can make it more difficult to accurately match criminal records to a specific job applicant or employee, potentially affecting background screening turnaround time and overall time to hire. Even if your business isn’t located in California, your background check process may be impacted when screening a job candidate who lives or formerly lived in a California county that redacts DOB information.

Tell us how AI in employee-background checking is transforming overall hiring and employee onboarding processes. How is AI-based hiring different from conventional human-centric activities?

The use of artificial intelligence in HR technology is growing. From applicant tracking systems to recruiting and background screening solutions, AI can streamline workflows, speed hiring, and save HR teams time and effort. But if not used carefully, AI also poses risks of unintentional discrimination. AI technology performs tasks once done only by humans and learns from experience so that it continually improves. According to a 2021 study reported by Human Resource Executive, 60% of companies currently use AI for talent management and over 80% plan to increase their use of AI in the next five years. AI-based hiring is different from conventional human-centric activities in that the tools can help teams save time by automating formerly manual tasks and applying consistent rule-sets to role-specific decision making. This improves efficiency and fairness for recruiting teams and hiring managers, giving them more time to spend on higher-value manual tasks and potentially decreasing time-to-hire. It can also help reduce subconscious bias that may be introduced when individuals responsible for reviewing background checks are making decisions on the data within those checks.

Both the Federal Trade Commission (FTC) and the Equal Employment Opportunity Commission (EEOC) have announced they will focus on ethical use of AI in employment. The increased focus the FTC and EEOC are placing on AI in hiring creates an opportunity for employers to develop clearer data policies they can share with candidates and employees for greater transparency. This is already the standard in Europe, and US companies that embrace it now can get ahead of the curve, reduce the risk of enforcement action, and enhance both corporate reputation and candidate experience.

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Your plans for 2022: What kind of future do you foresee for technology-based background screening platforms? What kind of data governance policies should companies adopt to ensure legal compliance with the existing federal laws?

Remote work and a competitive job market is bringing a greater focus on technological advances to expedite the hiring process, keep candidates’ data safe, and provide more fair and equitable hiring decisions that improve diversity within organizations. Background screening platform providers can be a valuable part of this process and will continue to be an integral partner for companies in the future. GoodHire’s proprietary data engineering technology is a platform that can be trusted to find ways to access accurate information fast and efficiently, engage in dialogue with candidates who have a less-than-perfect past, and provide role-specific, tailored results to employers that want to save time in screening while also recognizing each applicant has a personal story behind any potential records appearing on a report.

Companies are already adapting their screening requirements to accommodate more flexible remote work options and a new ‘no office’ dynamic. We’re seeing a relaxation of some screening services, such as drug screening, that is likely to continue in 2022, and many states continue to decriminalize minor marijuana offenses while creating a pathway to expunction of those records. With criminal records, too, companies are being more open to fair chance hiring, which expands the candidate pool.

In terms of data governance, it’s important for companies to keep abreast of new and changing laws; a tracking workflow they can develop and improve  with a trusted background screening provider as partner. For instance, several states have passed legislation requiring the redaction of dates of birth in public records, which is extremely disruptive in industries that rely on public record information in order to hire and mitigate risk. Companies in the technology and risk sectors that rely on public record data will need to become more creative, both with their technology and in their governmental and regulatory affairs strategies, to continue providing robust services without material data loss. Tapping a department or specialist in-house with responsibilities for tracking these developments and leading conversations about downstream impact with legal, HR, and risk departments is a great starting point.  The trend toward increased consumer demand for data privacy is not slowing down, and this will have a direct impact on both Consumer Reporting Agencies (CRAs) and their customers—employers—exactly at a time when demand for faster background checks is increasing. With a dedicated in-house function that can liaise with an employer organization’s background screener, and these other stakeholder departments, changes to decisioning criteria and background screening process can be more transparent and more quickly made.

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Thank you, Elizabeth! That was fun and hope to see you back on HR Tech Series soon.

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GoodHire is part of Inflection, a leading provider of trust and safety solutions. We have 10+ years of experience organizing government records and identity data, setting the bar for industry compliance standards and privacy excellence.