The business of Background Screening is still at an early stage of growth in India. However, the rate at which most companies are opting for pre-employment background screening, the industry may not take too long to post a cumulative annual growth rate of 100%.
No doubt recession has come as a dampener for this emerging business, but as I see it, the slowdown will be transient. This is not a gut feel statement, but an assertion based on current and foreseeable patterns in the global business.
As short as five years ago, background screening was virtually exclusive to businesses in the U.S. However, with more and more corporations crossing borders, the business of background screening will grow alongside. The trend will get further fueled by recent spate of employee fraud, information theft, workplace harassment and violence. Indications are already available in the market, with almost 50-60% of the revenues in the industry come from screening of new hires. Even though there has been a drop of 20% in exiting business, largely owing to reduced hiring by companies, the background screening industry in India has miles to control. With just around 25-30% penetration, background screening in India has an enormous growth potential in-store.
Moreover, there are certain sectors of the economy that continue to grow despite market pressures. Education is one amongst them. In fact, AuthBridge has had major client acquisitions in the education sector in last three months, counterbalancing the dip in business from other conventional users.
In addition, many organizations are now looking beyond just the employee screening to safeguard their businesses by putting some extra scrutiny. Increasingly, organizations are sensitizing their processes by introducing vendor/business partner screening into the engagement regime. While this augurs well for the company, it also brings me back to my initial assertion – the pace will be slow but the market will grow. My take – At an Annual Growth rate of around 40% till the recession subsides.
Everything considered, this is a time of consolidation for the background screening industry. We must pause for a while and take a look at the robustness and productivity of our processes, and prepare for the next level of service delivery. The tremendous pace at which we grew in the last few years has given us little time to realize out fullest potential.
