Employment Screening Services Market

Growing number of job immigrants is driving the market growth

Market CAGR for employment screening services is driven by the rising mobile workforce. Due to ization, there has been a significant rise in the number of people seeking employment, primarily in the world's most developed nations, in quest of better living conditions and employment prospects. In the affluent nations of the US, UK, Germany, and Canada, there has been an increased migration of immigrants working in highly professional positions and those requiring less education. Job immigrants are becoming more prevalent in industries like administrative and support services and computer and electronic products.

In some cases, naughty immigrants threaten organizations and even the nation's security. The nations that see a higher rate of immigration from people looking for work have established numerous rules and requirements for potential employees. In 2021, immigrants comprised about 17% (28.6 million individuals) of the civilian labor force, including employed and unemployed persons.

At each level of the hiring process, an employment screening provider assists in creating a compliant screening program. An organization can fulfill industry standards and state and federal laws with the help of a provider with in-house, effective compliance experience and clever built-in compliance solutions. These regulations differ from state to state and depending on the type of job, which complicates things for companies. The Fair Credit Reporting Act in the US is only one example of strict laws for job screening.

As a result, HR professionals are expected to be aware of any potential compliance issues, particularly while conducting employment screening procedures. Without a successful employment screening program, a facility or organization may incur fines, legal costs, and loss of privilege.

Technological developments are the primary trend gaining traction in the market for employment screening services. To improve the candidate and customer experience, major market players are creating technologically sophisticated services. As an illustration, the US-based group background screening business HireRight debuted its Applicant Centre and made its vaccination history questionnaire available in May 2021. The service offers a set of four questionnaires, including one on immunization history, one on respirator health, one on exposure to tuberculosis, and one on COVID-19 immunization. Thus, driving the employment screening services market revenue.

The rapid expansion of the gig economy is influencing the Global Employment Screening Services Market Industry, as more organizations engage freelance and contract workers. This shift necessitates comprehensive background checks to ensure the reliability and trustworthiness of gig workers. Companies are increasingly aware that inadequate screening can lead to reputational damage and financial losses. As the gig economy continues to grow, the demand for employment screening services is expected to rise, reflecting the need for organizations to maintain high standards of hiring practices in this evolving labor market.

The emphasis on employee retention is driving the Global Employment Screening Services Market Industry as organizations seek to hire candidates who align with their corporate culture and values. By implementing comprehensive screening processes, employers can better assess candidates' compatibility, thereby reducing turnover rates. This focus on retention is particularly relevant in competitive job markets, where the cost of hiring and training new employees can be substantial. As businesses recognize the long-term benefits of effective screening, the demand for employment screening services is expected to rise, contributing to a projected CAGR of 7.15% from 2025 to 2035.

The increasing necessity for thorough background checks is a primary driver in the Global Employment Screening Services Market Industry. Organizations are increasingly recognizing the importance of verifying candidates' credentials to mitigate risks associated with hiring. In 2024, the market is projected to reach 4.91 USD Billion, reflecting a growing awareness of the potential liabilities stemming from negligent hiring practices. This trend is further fueled by regulatory requirements in various sectors, compelling employers to adopt comprehensive screening processes. As a result, the demand for employment screening services is expected to rise, contributing to the overall growth of the industry.

The evolving landscape of regulatory compliance is a significant driver of the Global Employment Screening Services Market Industry. Governments worldwide are implementing stricter regulations regarding employee background checks, particularly in sectors such as finance, healthcare, and education. These regulations necessitate that organizations adopt robust screening processes to ensure compliance and avoid potential legal repercussions. As a result, the demand for employment screening services is likely to increase, as companies seek to navigate these complex regulatory frameworks. This trend underscores the importance of thorough background checks in maintaining organizational integrity and compliance.

Technological innovations are transforming the Global Employment Screening Services Market Industry, enhancing the efficiency and accuracy of screening processes. The integration of artificial intelligence and machine learning enables organizations to analyze vast amounts of data swiftly, thereby streamlining the hiring process. These advancements not only reduce the time required for background checks but also improve the reliability of the information obtained. As companies increasingly adopt these technologies, the market is likely to experience substantial growth, with projections indicating a market size of 10.5 USD Billion by 2035. This evolution suggests a shift towards more sophisticated and automated screening solutions.

By region, the report offers market insights into North America, Europe, Asia-Pacific and Rest of the World. The North American employment screening services market will dominate this market due to a rise in the number of immigrants looking for work, which fuels the market's expansion. Additionally, after observing the rise in the demand for verifying the credentials of international applicants and selecting an effective candidate for the position, many significant organizations in the US are using effective employment screening services.

Further, the leading countries studied in the market report are US, Canada, France, German, Italy, UK, Spain, Japan, China, Australia, India, South Korea, and Brazil.

Figure 3: EMPLOYMENT SCREENING SERVICES MARKET SHARE BY REGION 2022 (USD Billion)

Source: Primary Research, Secondary Research, Market Research Future Database and Analyst Review

Europe employment screening services market accounts for the second-largest market share. State and federal legislation in Europe prohibits discrimination in the workplace and during the recruiting process. As a result, it is illegal for employers to discriminate based on disability, gender, race, or other factors. In addition, the government has set stricter regulations to enforce that statute. Further, the German employment screening services market held the largest market share, and the UK employment screening services market was the fastest-growing market in the European region.

The Asia-Pacific Employment Screening Services Market is expected to expand at a rapid rate from 2023 to 2032. The demand for employment background checks is increasing in the Asia-Pacific region due to a rise in discrepancy rates and a growth in the number of check types. Background checks have been necessary for public services in Australia and China, and both countries have begun doing corporate pre-employment screening and drug tests. Moreover, China’s employment screening services market held the largest market share, and the Indian employment screening services market was the fastest-growing market in the Asia-Pacific region.

Leading market players are largely investing in research and development to expand their product lines, which will help the employment screening services market, grow even more. The launch of new products, larger-scale mergers and acquisitions, contractual agreements, and collaboration with other organizations are significant market developments in which market participants engage to increase their presence. The employment screening services industry must provide affordable products to grow and thrive in a more competitive and challenging market environment.

One of the major business strategies manufacturers use in the employment screening services industry to increase market sector and benefit customers is local manufacturing to lower operational costs. In recent years, the employment screening services industry has stipulated some of the most important medicinal benefits. Major players in the employment screening services market, including Sentinel Background Checks (US), HireRight Inc. (US), CareerBuilder Employment Screening LLC (US), Employment Screening Services Inc. (US), and others, are funding operations for research and development to boost market demand.

Accurate Background provides background screening and security research services that use technological innovation to make talent screening simple, efficient, and trustworthy. The company's services include employment screening, vendor certification, and fraud protection by integrating information about the candidate utilizing the client's preferred application tracking systems (ATS), allowing companies to streamline the pre-employment background screening process. In October 2020, Accurate Background offered new, additional resources through its COVID-19 Programme to assist businesses in hiring and thriving during the pandemic.

Accurate's COVID-19 Employer Information Hub is a centralized online repository of all the tools, information, and products available to help businesses and their employees.

Sterling Check Corp provides background and identity verification services powered by technology. It provides a hiring and risk management solution that begins with identity verification and continues with credential verification, criminal background screening, drug and health screening, onboarding employee documents processing, and continuing risk monitoring. In March 2023, Sterling Check Corp. announced the acquisition of A-Check in a highly complementary transaction that would increase Sterling's presence in important US verticals such as Healthcare, Industrials, and tech media.

Clients of A-Check worldwide will continue to get great service and additional benefits from Sterling's deep market understanding, industry-leading worldwide reach, and broad range of technology-enabled services.