Sterling – The Very Real Future Of Digital Identity With Taylor Liggett

This is Recruiting Daily’s Recruiting Live Podcast where we look at the strategies behind the world’s best talent acquisition teams. We talk recruiting, sourcing, and talent acquisition. Each week we take one over-complicated topic and break it down so that your three year-old can understand it. Make sense? Are you ready to take your game to the next level? You’re at the right spot. You’re now entering the mind of a hustler. Here’s your host, William Tincup.

Ladies and gentlemen, this is William Tincup and you are listening to the Recruiting Daily podcast. Today we have Taylor on from Sterling and our topic today is the very real future of digital identity. I can’t wait to talk to Taylor about this. Let’s do some introductions. Taylor, would you do us a favor and introduce both yourself and Sterling?

Yeah, good morning William. Thank you so much for having me on. So my name is Taylor Liggett. I am the general manager of Sterling Identity. So essentially I oversee all of Sterling’s identity services both in the US and globally. Things like fingerprinting, biometrics, identity verification, digital wallets, so on and so forth. Sterling is a world leader in the background screening and identity space. Been around for quite a while. We currently service about 50,000 customers and offer our services throughout the world.

And I was right to call it Sterling, not Sterling Background or that’s, we’ve rebranded it just to Sterling, correct?

Yeah, I mean I think technically we are called Sterling Check but certainly we are known as…

Just Sterling, it’s easier.

Yeah, yeah.

So we’re going to talk about the future of digital identity, but where are we currently? What’s the state, when you looked at your customers, how do they think about identity or digital identity, verifying one’s identity, how do they currently think of it?

Yeah, that’s a great place to start. So I’m going to give kind of two answers here. One is, I think the world in general is in a really fast moving space with respect to identity verification. For so long we’ve operated in essentially an analog capacity. We have driver’s licenses and our wallets, we have passports and those are used traditionally to verify our identity.

(02:27)
But in today’s world, when so much is happening digitally, we’re working remotely. More and more is happening online. That just doesn’t work. So this move to digital identity is way broader than the employment space. But with what we’re seeing, is there’s really a huge gap as I would define it within the employment space, and then also just within customers, employer’s rather, understanding of what is and isn’t happening. So current state, the vast majority of employers, certainly in the US, this differs a little bit by country. Some countries have different regulations, but the vast majority of employers, by and large, they don’t do any type of identity verification in the pre-employment phase. And it’s sort of a problem that’s further compounded by a misunderstanding of what does and doesn’t happen during the background screening process itself.

So take us, just deconstruct that for just a second. What does happen and what doesn’t happen in the typical background screening check?

Sure. So think about it like this, the vast majority of screening checks operate in the following manner. An applicant or candidate in one way or another is sent a request to engage in a background screening. This can happen through many different mechanisms, but one way or another that candidate knows they’re going to go through a background screen and they provide their information for that background screen.

(04:00)
So you know, you come in, you say, my name’s John Smith, my date of birth is such and such, my social security number is such and such, my address is this. And those are sort of the four components that are used within a background screen, name, date of birth, social, and address. That information is then, if it’s not directly collected by the background screening company, it’s passed from the employer to the background screening company. And that is then used to conduct the background check.

(04:28)
Now what occurs in that process is sort of twofold. One, a background check company like Sterling is going to take that information and certainly try and locate additional information.

(04:41)
So we may take the social security number and run what’s called a trace on it to try and find previously used names and addresses. And then off of that we’re going to search criminal court records. We’re going to search whatever type of check we’re conducting, and then we’re going to gather that information and report it back. But before reporting it back to the employer, we’re going to have to verify that any information found actually matches the biographic data that the candidate provided. So two things can happen here when you don’t have identity verification in place. One is, you might get incorrect information and we’ll talk about that more in a bit, right. But you might get incorrect information and that may hamper just the ability to even find information out there. But two, even if you find information out there, if it doesn’t match the information provided, then we are legally unable to report that out. So that’s really why identity verification cuts at the heart of what background checks do.

So one of the things that you mentioned is the different types of screens. Obviously a customer can then select the different type based on the position, based on whatever they’re looking for pre-employment wise, take us can they verify degrees and where schools are, obviously a criminal background check makes sense. Can they do credit checks? As best you can, what’s the array of the different types of screens that they can look at?

Yeah, I mean it’s a lot, candidly nowadays because to meet the needs of every different sort of industry out there is a whole bunch of stuff. But just to name kind of some of the main ones that might happen, I mean criminal checks are of course ubiquitous and very, very typical.

(06:22)
You might also have motor vehicle record checks, for example if someone is driving for a position, make sure they’re a safe driver. You may have credit checks. There’s kind of been a reigning in of that to make sure it’s applicable to the position. So perhaps, I’m handling money, whatever. But certainly credit checks or financial checks could exist. Sex offender checks, maybe you’re working with a population you need to be particularly conscious of that with. There can be sort of sanctions related checks that can occur. Those are some of the main ones I guess we get into. You’ll also see drug testing and such, a lot has changed in that space, of course, recently. But those are some of the main categories I would say.

So one of the things that I think you and I have talked about before is most people when they think of screens, they’ve historically put it in pre-employment, and they haven’t thought of the continuous or something that happens after. All that sounds great, let’s say that we do all four of those things, sex offender, criminal, credit, the whole bit. We did the whole thing, and then all of a sudden, two months into one’s tenure, someone gets arrested for a major felony, we won’t even get into what, but just a major felony. It’s my understanding that the employee doesn’t necessarily have to disclose that. Is that, maybe not a hard and fast rule, but go ahead?

No, look, you’re hitting on something that I think is really important. So individual companies are going to kind of have their own policies about a distinguisher and so on. But what you’re hitting on to me is two of the craziest things relative to our whole conversation. Two of the craziest things about this whole process, so as we were just talking about, it’s very rare you are actually confirming that the person you’re checking is the person who they say they are. So that’s crazy.

That’s insane, yeah. Got it.

And secondly, you jump through all of, you know, you do all of this upfront free employment checking, whatever that may look like, and then you hire the person, and you just trust they’re good throughout the entire… people who work for…. So that’s also kind of crazy to consider.

Well even in the instance that you said with the motor vehicles, like hey, okay they’re going to be a driver, fantastic. They work for Amazon, all good stuff. We do the pre-employment stuff, makes sense. And we don’t monitor the DMV record, like we don’t? That just seems crazy to me.

Yeah, it does. It certainly, I also don’t want to overstate this, I mean, certainly there are employers who do do this, right?

Of course.

Continuous monitoring is a thing. There are certainly employers who will have regular occurrences of motor vehicle record checks or whatever, but it’s definitely in the minority, as is identity verification. We’re talking about things that exist but that most employers don’t have as regular practices.

So the first part of crazy, which is really the most fascinating, is the you are you, okay, so you know, you can go online and apply to a job and go through this whole process. That doesn’t necessarily mean that it’s you. In fact, a buddy of mine started a company called JobeServe years ago where he had a hundred people in India that would apply for jobs, for their clients, for their folks, but they would do all the pre-work. So they would go and apply and do all that stuff. Now they won’t do the interviews or anything like that, but they would do all the application stuff, which I found fascinating in a lot of ways, but the “you are you” part of crazy that we just talked about. How do we A, unpack that, and B, how do you see that changing over the next couple years?

Yeah, so let me try and unpack it a little bit more because your example is really spot on and in line with a lot of what we’re seeing. So when we first released our solution, which was really the first at scale identity verification, pre-employment solution in the US, we released that earlier this year. I expected certainly to see the folks that would come in with incorrect data, they threw off their date of birth or SSN purposefully or accidentally. I expect to see a lot of that. What I’ve been really surprised at seeing is some of what you’re getting into [inaudible 00:11:05] which is just completely different people that are fulfilling different parts of this pre-employment journey. So you have stuff like what you just said, where someone’s helping fill out the application and you do now have stuff with other people interviewing on behalf of other people. So we hear from employers that they’re interviewing one person and another person shows up to work, or they’re interviewing one person, another person background checks, another person shows up for work.

(11:31)
We’re in a very crazy age and part of this was in, or I should just say in large part this was really accelerated by COVID right? The move to remote work and another thing that happens, it’s not just, it’s easy to say remote work and people start acting like this and there’s certainly a portion of that.

(11:48)
But the other thing that occurred is in the wake of COVID, if you think of some of the government assistance programs or think of unemployment, think of the PPE loans, et cetera. There were huge, that was what some folks called the Super Bowl of fraud, because there was a huge purse attached to, “I’m going to go grab William Tin cup’s information. I’m going to say I was him, I’m unemployed now and I could get whatever that is, $10,000 bucks or whatever. And so what you had is you had actual criminal enterprises that invested heavily into this, that invested heavily into getting PII and deploying it for these purposes.

(12:26)
And so that runs through, they make a ton of money. The FBI says it’s the greatest fraud that’s happened in our country, it’ll take them 10 years to even just get to the bottom of starting to prosecute a lot of this. But now they’re looking to repurpose that, and employment’s a great target factor.

(12:45)
So you also are seeing beyond individual people who are just trying to get jobs and maybe obscure something they don’t want to share their past or whatever, or maybe they’re not qualified for the job, we see that. But we’re also seeing something more nefarious, where it is of real bad actors that are using identity fraud to get into a place to then gain access to their system’s proprietary information, et cetera, to further a nefarious scheme so to speak.

Yeah, it gets into corporate espionage or other types of things they could get in and get in and start sourcing talent. I mean I can see, or I could see a business case, probably a Netflix movie, a recruiter basically doing this to then get in and get access to talent and be able to flip that talent. The “you are you,” part, which I think the audience is going to find fascinating, is that verification of who that person is and again, past a resume, past a LinkedIn profile, et cetera, that Bobby is really Bobby and Bobby, whether or not Bobby lives in Topeka or is remote or hybrid or any of that stuff. But we can say for sure that Bobby is Bobby.

(14:03)
How do you see that, first of all for your clients, you’re educating them, because they didn’t come out of Sherm, they didn’t come out of their bachelor’s in HR thinking this thought, but you brought up fraud in a big way because I was going to bring it up as well. But getting their mindsets over to understanding that this is a kind of continuous process of making sure that we understand it. Bobby is Bobby and Janet is Janet, et cetera, et cetera. So how do you move their minds over to understanding identity verification and kind of the relentless pursuit of the you are you?

Yeah, it’s a great question. So there’s two things here. I mean, we’ve focused kind of heavily so far on the fraud aspect, which is real and we need to address and so on. But there’s also a huge upside here in terms of innovative experience and efficiency of process that proper digital identity incorporation into this can help with.

(15:10)
So let me talk you through a little bit on that. So once you go through the right type of digital identity verifications, so William Tincup comes into Sterling, you apply for a job, we verify, we know William is William, and we give you control over your identity so to speak. In other words, that’s persisted, and now you have control over that and it can move with you beyond just that filling out an application that’s really at the heart of what we’re working on. Then it doesn’t just stop with that, You mentioned earlier like verification of education, that’s another huge thing I didn’t mention earlier, but verifying education, verifying employment, verifying references, things like that.

(15:49)
But think of, that’s immutable data. In other words, it doesn’t change, if you have a college degree that doesn’t just go away some day. It doesn’t change in any capacity. And so why should that have to be re-verified every single time you go to a new employer? And when you get this right, and you can say that someone is who they say they are and then you can start to give that person control over their own information.

(16:11)
Maybe it’s a degree, work history, whatever, the certifications, what have you. Then as they may move on to their next process, you start getting closer and closer to having folks that are kind of pre-credentialed, that can assist heavily with recruiting and streamlining candidate on-boarding.

(16:30)
One of the things we’re seeing now is we’re seeing a more significant percentage of candidates come in as pre-verified. In other words, they’ve already gone through the identity verification process elsewhere and they’re coming into Sterling and now they just log in, they consent to share their information, it’s privacy preserving, so they know exactly what information they’re sharing, and that information automatically imports into our system and they’re off to the races. It’s a great experience, and they’re on very quickly. So there’s a lot of upside here when it’s done correctly to the candidate and to the employer, and to the overall process. So I think that’s another piece that’s important for employers to understand.

Well, in some ways anybody that does a lot of business travel, this is the known traveler number, this is the reason you have TSA, this is Clear. Any of those types of things, it’s like okay, it’s really easy to now be portable and I want to ask you about that in a second, but I don’t have to go to every airport and then prove, I literally put my fingerprint down and I have my ID on me and it’s “Okay, you’re done.” It’s easy. And I think people get it if they think about it from a traveling perspective. But what you mentioned in terms of the portability, do all of that, because I’m of course squarely Gen X, I’m thinking that’s like a suitcase that they can take with them from job to job or within the company from internal mobilit-wise. What are y’all calling that? What is that thing called?

Yeah, I mean, so it’s referred to in different things. I think I tend to refer to it as a “digital wallet” or an “identity wallet” and you can think about it kind of like your real wallet, like what do you have in your real wallet? You have an ID, you may have an insurance card, you may have a business card, you may have credit cards, whatever.

(18:24)
Similarly with your digital wallet, your digital wallet, just of course because it’s digital and you’re not limited, you don’t want a Costanza wallet or whatever. You can have a lot of things within there. So I think it’s broadly referred to as a digital wallet or an identity wallet.

(18:38)
And I couldn’t agree more with you on the travel comparison, because I think that is an easier way for people to digest. And I think a lot of people have used Precheck or have used Clear and you know, can imagine the chaos if every time you had to walk through the airport.

(18:55)
Well, I guess we can, because you look at the lines that aren’t Precheck and you sort see how that goes. And this is arguably even worse because there’s more that has to, it’s not just looking at an ID, it’s collecting information, it’s more that goes into this.

(19:09)
And Clear is actually a great example of a digital identity network where you come in, you give some information, you give your fingerprints, et cetera, and then that streamlines every engagement past that point. We’re doing a very similar thing in our case in partnership with ID.Me, for the employment sector and related.

So dumb question alert, can I see my digital wallet? And I’m thinking about the screens in particular, because like credit check, I can go and run a credit check on myself and I can see, okay, the good, the bad, the ugly, whatever. I could probably do that with the DMV on some level, but I might not know that, maybe they’re not felonies, but I might not know that there’s certain things on my criminal record that shouldn’t be there or whatever. Do you have customers that maybe have candidates or employees that want to see on some level, want to have some visibility into their digital wallet?

Yeah, so I’ll answer that in a couple of different ways. One is I believe that for any digital wallet solution like this to work, there has to be complete transparency. And I mean complete transparency. You as the individual should have the ability to see every single thing that exists in there. You should be able to see what information was shared, whom it was shared with. That should never even happen unless you’re specifically consenting to it. You should be able to revoke consent after the fact. You should be able to completely remove all of your information. If at some point you decide, you know what, I just don’t want it there, you should be able to do that. So this is also a complete revolution from a privacy standpoint in the wake of how out of control data has gotten with the likes of Facebook and so on.

(20:59)
This is a movement to put people in control of their information and have privacy preserving principles wrapped around that. So that’s sort of the point number one on that. I think to the other piece you were getting at around, do individuals actually want to have some insight into this? I mean you brought up another great comparison. People commonly check their credit. They say, does this look right or something is wrong on here? Do I need to dispute it? People don’t commonly check their criminal history. So there’s two things that can happen. If you go through a background check with any company, you have a right under the Fair Credit Reporting Act to request a copy of that check. So if an employer does something on you, you can contact the background check company like Sterling, and request a copy and we will send you exactly what the employer saw every single thing [inaudible 00:21:47]

(21:47)
So that’s point number one. Point number two is another thing most people don’t realize, you can actually get an FBI background check on yourself. So it’s something called a Departmental Order. Sterling offers this as an FBI channeler, other companies do as well. You can go and sign up, you provide your information, you pay a fee, you go into a location that does fingerprinting and in our case that’s with the UPS store. You go in there, you fingerprint, and literally within an hour or two you can have a copy of exactly everything the FBI has on you, and you could use that for an assessment of is everything accurate.

Oh, I love that. You mentioned credentialing earlier, and I want to get back to that. Again, we’re talking about the future, do you see a part of this digital wallet and getting credentials verified as a part of their resume, LinkedIn profile, et cetera, the way that they apply to jobs, is there carrying in the wallet already, it makes it easier for a lot of folks to be able to just say, “Yeah, these things have been verified. How do you see that actually playing out?”

Yeah, look, I think the implications for recruiting, for candidates applying for jobs, for job boards, all that type stuff I think are incredible, because when you consider and you sort of fast forward on this and folks now have verified credentials about themselves or maybe their LinkedIn profile has verified check marks next to things, this has huge implications, and I think very positive ones.

(23:28)
If you consider from a candidate standpoint, you can stand out, so to speak, from an employer’s standpoint, you can more quickly onboard recruiters and so on are going to understand far further upfront who is and isn’t qualified to reduce any type of time that might be wasted, to better source candidates that might be interested in a position. You have other segments, for example, maybe I’m a veteran or what have you, and that might be of interest that’s been verified. So I think it’s got some really exciting innovations that will come along with this for where you’re getting at.

So last question, it’s the audience now listening to this is probably now thinking about, okay, now the next time they’re in a conversation, what are the questions that they should be asking, especially around digital identity? What are the questions that they should be asking of Sterling in the sales process, especially as prospects, it changes, now I mean it has completely changed since when I did background screening, but I mean it’s completely changed with digital identity and identification. But maybe I want to educate them as to what questions should they have in their arsenal?

Yeah, I think it’s a great way to end this. Because I think employers, whether they’re talking with Sterling or any other background check company, they should be asking explicitly what is being done? What can I do from an identity verification standpoint, what tools do you offer that support this and how do those work? I think it’s very important, employers are starting to get wiser around this. They’re starting to ask those type of questions, and the other thing I’d say is that similar to how background checks one size doesn’t fit all, right, you may background check an executive differently than an entry level worker, for example. Identity verification is also not necessarily one size fits all. The standard that you are going to put in place for, I don’t know, a high level defense contractor or for access to the IRS or what have you, is going to sort be one standard, it’s going to have more friction involved because the person’s going to have to do more things to prove that they are who they say they are.

(25:45)
You may scale that down, where there’s less risk involved in certain positions. And so employers should also be asking what type of options do I have within this space? And then the final thing I’d just say on that is that it’s really important from an equality and access standpoint, to do this right, you have to account for every scenario, including the person that doesn’t know how to use technology. So what are you doing there? How can tools work for persons who might not be in credit files or who might be disadvantaged in another way? Those are the things I think that can help employers make the right decisions about what to do.

I love it. This has been wonderful. Thank you so much Taylor, for your time and wisdom.

I really appreciate you having me on, William, a pleasure talking with you.

Absolutely. Thanks everyone for listening to the Recruiting Daily Podcast, until next time,.

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