Storytelling About KarmaCheck With Eric Ly

Welcome to the Use Case Podcast! Today we have Co-founder and CEO Eric Ly from KarmaCheck and we’ll be talking about the use case or business case for why their customers use KarmaCheck.

KarmaCheck is a platform that offers background check services to individuals, companies, and organizations.  Eric explains that KarmaCheck’s goal is to provide a verified blue checkmark next to online profiles, ensuring that the information displayed is accurate.

The platform operates in a regulated space, and candidates have the right to request and receive a copy of their background check report. However, Eric notes that this right is often not disclosed to candidates during the hiring process, leading to a lack of transparency.

KarmaCheck makes the background check process transparent by informing candidates of the steps involved and allows access to their report. By doing so, the platform builds trust with candidates and promote a culture of transparency in the hiring process.

Give the show a listen and please let me know what you think.

GEM Recruiting AI

Thanks, William

Show length: 22 minutes

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Eric Ly
Co-Founder, CEO KarmaCheck

I am passionate about combining innovative products, technologies and business models to create highly successful companies. I was a co-founder at LinkedIn. I worked with a talented team to enable professionals to connect in fundamentally better ways with each other online. (Since you're on this site, you know the rest!)

I am an experienced entrepreneur who has seen a lot about what succeeds and what doesn't, and cares a lot about building great companies. There are a lot of important ingredients. You can ask me what they are if you're curious.

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Storytelling About KarmaCheck With Eric Ly

William Tincup: [00:00:00] This is William Tincup and you’re listening to the Use Case podcast. Today we have Eric on from Karma Check and we’ll be learning about the use case or the business case as prospects and customers have used to purchase Karma Check. So why don’t we jump in to introductions. Eric, would you do us a favor and introduce both yourself and Karma?

Eric Ly: Hey, thanks for having me on, William. Sure. So, uh, my name is Eric Lee. I’m one of the co-founders and the CEO of. Karma Check. Uh, my personal background is that I’ve been in tech for. Too [00:01:00] long, uh, multiple decades. Uh, I’ve, I’ve started, uh, numerous, uh, tech companies. The most, uh, well known of which, uh, is LinkedIn when I was one of the co-founders.

Uh, I’ve been a B2B software for, you know, all of my career basically. Um, and a few years ago, I, uh, really got interested in the space, uh, that Karma Check is in today. And it’s the unlikely space of, uh, background checks, but essentially what I was. Looking for was kind of that blue check mark, uh, that would go next to, uh, profiles online, you know, such as what you’d find on LinkedIn elsewhere.

Uh, and just basically confirm the information, uh, that you’re seeing about a person is, uh, truly verified. Uh, so that’s how we got to, uh, working on Karma Check. And what we’re doing today.

William Tincup: So, so one of the things that, that I love about what you’re doing is, um, again, making it easier for people to understand, okay, this has been, this is, you know, this [00:02:00] has been updated.

This is, you know, this is an old data, this is new data. Have you, have you asked or, or have, have customers asked or even, uh, the, the customers of their customers candidates asked, uh, can they get a copy of your karma check?

Eric Ly: Yeah. So, uh, you know, one of the interesting things about background checks that I learned as, as I got into this space was that, uh, this, this space is actually regulated, right?

And so there’s a right law called the, uh, you know, F C R A, and it does allow candidates to get a copy of, uh, whatever is found. About them. And so that is a right that every, uh, candidate, uh, has just like, uh, you know, when you, uh, go get a credit report, you know, if you’re getting, uh, a credit card or a loan, it’s the same way in the employment

William Tincup: situation.

I wonder how many candidates actually know that, though. You know what I mean? Like, I, I knew it because I’ve, I’ve studied it. But like, how many candidates when they apply just your [00:03:00] Joe average candidate or Jane average candidate, when they apply to a job, it’s usually not disclosed. Even though Yeah,

Eric Ly: yeah.

I mean, it isn’t, yeah. And that, that was one of the things that we, uh, you know, went out to, to solve is that there usually isn’t a lot of transparency in this process. You know, when uh, somebody goes and gets a job, right. Uh, you know, they often have to submit to a background check and. They enter in all this information about themselves and then they don’t know, you know, where that information went or what happened to it.

Um, but it isn’t a fact, a case that, uh, you know, individuals can get a copy of their background check and uh, you know, see what it says about them. I

William Tincup: think, I think the more we, yeah, I love that by the way. I think the main more we make that transparent, like how, okay, here’s the process. So you’re gonna go through this behavioral assessment, you’re gonna go through a criminal background check.

You’re gonna do, in some cases, maybe even a credit check if you’re, if you’re dealing with money or whatever, the bid is like taking ’em through those steps. And it’s like, and by the way, if you’d [00:04:00] like a copy of that, You know, click here and you know, then you can get that as well. I just, I just think the more transparent about the, the entire process, the better the experience for the candidate, but also just for us, like, just like we don’t have to hide these things.

But, um, I did wanna get your take on something I saw. At, uh, at HR Tech back in October was a lot of, you know, the, the huge, the publics, the, the publicly traded, uh, folks that play in our space is they’re, they’re moving. It seemed to me at least, again, one guy looking at this, it seemed to me that they were moving, uh, they still do one and dones, you know, signing up people and they could do that, but they were doing also kind of extending that into monitoring.

Okay, so once you pre-hire, you wanna do a background check, of course check. Got that. But then the person then gets employed and three weeks later they get arrested for murder or [00:05:00] whatever. They don’t, they don’t really necessarily, unless it’s in a handbook, they don’t necessarily have to disclose that. So how do you know?

And so I think one of the things I found fascinating is that moving into not just pre-hire, Assessment and checking, but also kind of employee monitoring. Monitoring kinda gets a bad rap cuz it sounds negative when I say it like, oh, you’re monitoring. It’s like, no, it’s, you’re actually, it’s risk assessment.

It’s risk management. You want to just make sure that things are still the way there. They’re were, were When you did pre her. Do you, did you see the same, first of all, if not HR Tech, do you see the same thing with kind of not just doing pre-hire stuff, but kind of doing post hire?

Eric Ly: Yeah, I mean, that’s a great point, William.

Uh, you know, we’re seeing more and more of that, you know, in the monitoring space. I would definitely say that it’s a emerging field. Uh, but you know, more to the point of, you know, why it’s important, you know, why. [00:06:00] Uh, you know, employers should look into it. I mean, if, you know, flip it around and, you know, imagine that, uh, you know, you are a, a writer, you know, of, of Uber, right?

Right. Uber’s hired all these drivers. Uh, you know, they’ve all gone through background checks when they were first brought on board. Uh, but you know, what if, uh, you know, someone, uh, you know, while they’re working for one of these services, uh, you know, has a dui, right? As, as a. Uh, you know, writer, uh, you certainly would love to, you know, about that.

So, um, you know, that’s why, you know, things like monitoring, uh, you know, create value. Uh, there are, you know, even industries like, uh, healthcare where, you know, you want the, you know, uh, physicians and the nurses to continue to, you know, have, uh, their licenses, for example, up to date, uh, other kinds of. Uh, credentials, like drug tests and so forth.

So those are all kind of, if you will, you know, monitoring scenarios. Um, so even the word choice of word may not be [00:07:00] the best. Uh, it’s still a valuable function that is, is really valuable in, uh, some industries and I would say is actually growing into, you know, more and more industries that may, you know, may not be obvious, uh, right now.

William Tincup: I love that. Do you, uh, obviously from industry to industry, depending on the compliance that they have to adhere to, uh, background checks can be, uh, like again, it can be a pick box of the things that they require, right?

Eric Ly: Yeah, that’s right. Um, you know, different industries have, uh, different, uh, things they, you know, want to check of their workers.

Uh, actually varies across, uh, industries. Uh, you know, in some cases it’s required. So there’s a specific set of. Uh, things that need to be done in other industries, it’s, uh, really nice to have, um, you know, just for, you know, sort of safety and risk, uh, mitigation as you were, you know, saying. Um, and yeah. Uh, you know, the, the interesting thing about background checks is that, uh, there’s some [00:08:00] statistic out there that says 96% of employers actually run background checks of one sort or another.

So it’s pretty much ubiquitous.

William Tincup: I love that. Okay, so from a workflow perspective, uh, I’ve always thought of background checks, especially on the pre-hire side. I’ve always seen those kind of, you can do it out further out in the funnel. I. Um, or you can do it closer into, once you feel like you’ve got the candidates, like, uh, want to get your, or I want to get your take on where, where they should, where, where you see your clients, apply background checks.

And then the second thing is, I’m assuming that y’all are integrated into ATSs or in, into that workflow of ATSs, but I don’t, you know, I wanna make, I wanna make sure of that.

Eric Ly: Your favorite question, right, William? Right? Yeah. Um, you know, so these days, uh, background checks do get run, you know, fairly late in the, in the process, you know, candidate, uh, you know, has a job [00:09:00] offer, um, uh, or, you know, maybe even shortly, you know, after they start, uh, there’s a background check that, uh, you know, gets run.

And, um, you know, I think the reason for that is it’s, um, you know, it’s historical in that it’s. Uh, been relatively, you know, uh, uh, lengthy, it’s taken some time to run background checks and they, you know, do, uh, cost, uh, you know, fair bit of money in, in some cases. And so employers, uh, in general don’t wanna incur that cost until they’re pretty sure about a candidate.

Now what we’ve seen is that, uh, you know, there are, uh, you know, definitely companies, uh, a lot of, uh, tech platforms, I would say, that have this idea that there’s actually maybe an advantage to running, uh, them sooner or at least part of a background check, uh, sooner. And the reason for that is that, uh, it helps, uh, kind of separate, uh, [00:10:00] you know, candidates that do have, uh, issues with their background, uh, from ones that.

Maybe, you know, don’t, um, and that’s, uh, accrues a couple benefits. One, it it, it sort of allows, uh, you know, platforms to, you know, to figure out, you know, which people they could potentially, you know, place faster. Um, and it also allows the candidates to kind of separate themselves, you know, with kind of a clean bill of health compared to other candidates that might have issues, uh, on their record.

William Tincup: Right, right, right. So before we hit some of the buy side stuff, where do you, where do you see, you know, in 2023, you know, from a product perspective, where do y’all see all kind of going, where do you see your clients kind of pushing you? Cuz you know, obviously you, you’re listening to your clients and they’re, they’re, they’re always asking you for new stuff.

Where do you, where do you kind of see, without anything proprietary, of course, but just where do you see the product going?

Eric Ly: Well, we see a number of exciting directions. You know, I think one of the things that are on a lot of [00:11:00] business owners’ minds is, you know, how’s the economy mm-hmm. Do in 2023? And, and one of the things that we’ve learned, you know, having seen couple cycles is that, you know, when there are downturns or the potential for downturns, there’s uh, actually the rise of, uh, contingent labor.

You know, that’s to say companies tend to hire more temporary workers than they. To, uh, full-time workers. Um, and that’s where companies like us really place, uh, you know, to the strengths of that kind of situation. Because, you know, to the extent that a company is able to, you know, find, uh, contingent workers and, uh, you know, place them faster, maybe there’s, there’s some churn and, uh, that area, you know, to replenish those workforces.

Um, you know, that’s where, you know, having a fast. Background check company, uh, really, uh, helps and, and that’s what you know, is one of our, you know, value propositions is really the [00:12:00] speed and the turnaround times of how quickly we’re able to. Um, you know, turnaround,

William Tincup: uh, background checks. Oh, I love that.

Yeah. It’s, it’s almost like response time. Uh, it becomes a kind of thing is, can we do this in, you know, what, what used to take, uh, historically, what used to take weeks, uh, you know, now we we’re, now it’s days. Now it’s hours. Now it’s minutes. Now it’s seconds. Like how fast. And doing and, and maintaining quality.

Of course. How fast can we do this? And, and you’re constantly looking at, okay, how can we do it, uh, faster, but also keep that same quality?

Eric Ly: Yeah. And, and there’s really another, you know, trend that, you know, has been going on for a while and. Seems to continue is that, you know, there, there is definitely competition for talent.

Mm-hmm. And so, uh, you know, the same workers, uh, you know, be they an hourly worker or even a, you know, skilled knowledge worker, um, you know, across a variety of different fields, [00:13:00] um, you know, a lot of employers are often competing for the same person. Yep. And, uh, you know, there’s been a really interesting trend.

Recently around the, you know, candidate experience, you know, how, how can, uh, employers provide a, a, a better kind of onboarding experience for the candidates that they want to attract. And because, uh, background checks are often one of the essential elements of onboarding, you know, having a fluid and pleasant friendly experience through that part of the process, uh, is becoming more important.

William Tincup: So let’s, yeah. So, so let’s do some buy side stuff. Um, what’s your favorite part of the Karma Check demo?

Eric Ly: Well, there’s really a lot of them. Um, what, who’s your favorite kid? Wouldn’t be surprised to, to know. Um, but, uh, you know, uh, you know, we, we’ve [00:14:00] definitely tried to, you know, make a different kind of, uh, experience, right?

A different kind of product. For both employees, uh, and candidates. And, uh, you know, one of the things that, you know, I, I think, you know, is starting to emerge is really this, uh, candidate experience as I mentioned before. Uh, you know, one of the challenges, uh, is that, you know, when candidates submit their information, they, they really don’t know what happened to, uh, that information or the process.

Um, you know, for getting through the background check. And so what happens now is that they tend to call up the employer, you know, if it takes a while, um, to run a background check and they say, Hey, where’s that, uh, background check. I’m really eager to start. And, uh, you know, by the way, have you finished it yet?

And so one of the, uh, you know, capabilities of our. Product is that we have a candidate dashboard that we show, uh, two candidates, and at any time they can go there, they can look up, uh, all of the [00:15:00] different kinds of, uh, checks that an employer has asked to run and find out the, the status of all that information in real time.

And, uh, you know, that really solves kind of the big pain point that employers have in having to answer that question. Uh, but it also helps the candidate to, uh, really, you know, figure out, you know, where they are if they need to provide some more information, or there’s a part of it that, you know, is blocked for some reason.

Uh, and we found that when we show this, you know, to, uh, our customers, they, they really, you know, get a big kick. Out of that, uh, not the least of which this all happens on a mobile device. And you know, as we know these days, uh, most people are on their mobile phones and, uh, they’re allowed to. They’re, they’re, they’re able to check on this information, uh, wherever and whenever they are.

William Tincup: I love that. Okay, so questions buyers should ask and, uh, it is, it relates specifically to, to, to karma check, but also to background checks in, in particular background screening [00:16:00] in particular, what. When a practitioner is thinking about this either for the first time or they’re thinking about moving from, from one, one to another, et cetera, what are the questions that they should be asking you?

Eric Ly: Yeah, you know, there, there’s, there’s, uh, in this industry, there’s, you know, a few things that always matter and, uh, you know, I think those questions continue to be important. And, and so those things, you know, are, uh, the speed at which a background check can be completed. Um, you know, how much does it, uh, cost and, uh, how accurate, you know, is it?

And so those dimensions, uh, you know, should never be sacrificed and they should, uh, you know, get the, the, the best, uh, outcomes, uh, out of those three factors as they can. But I’d like to offer maybe a couple other considerations. As, you know, businesses are shopping around for, um, you know, such solutions.

Um, you know, one is. You know, one of the things that we found is that [00:17:00] companies have had to rely on multiple systems to get their background screening, you know, work done. And so they’ve have multiple systems that they’ve had to, you know, weave together. And, uh, you know, that creates challenges because you have to manage multiple systems and they’ve talked to each other and yeah, like you were saying, you know, you have to link up multiple systems into, uh, an ats.

And, uh, you know, there are solutions, uh, you know, such as ours out there today that, uh, you know, tie a lot of those things together. Kind of a one stop shop, uh, type of model so that, you know, there can be fewer systems, you know, to, uh, to manage this. I would,

William Tincup: it’s super helpful for people too, just because that’s the general kind of trend for a lot of practitioners.

I, I need less systems. I just, I need, you know, less logins, less systems. I just wanna be able to do this, this bit, uh, and, and not have to contend with [00:18:00] the 16 others. They’re different things, so I love that Again. I think that’s a great kind of question. Sta uh, questions for practitioners to say is say, how does this, how does this fit in this, in this, in this technology stack or the ecosystem that I’ve already built?

Is it something outside of it or is it something that it can easily kind of fit within it? I, I love that line of thinking.

Eric Ly: Yeah, that’s right. Um, and, uh, you know, the, the other point that I’d mentioned is, you know, to, to really look at the user experience, uh, you know, on this kind of, uh, sector, you know, it’s, there’s a lot of grumbling, you know, these days within companies and outside of companies, right?

Sort of, uh, you know, background checks or kind of a necessary evil nobody likes to do, but it’s, uh, And, and

William Tincup: I think that’s a bad, first of all, I just think it positions in our minds because I think that it, there goes, there’s a history lesson here because background checks a hundred years ago were done by private investigators.[00:19:00]

So they weren’t necessarily trying to find good stuff out about the positive things out about candidates. They were trying to find the negative things about, uh, candidates. And uh, and again, that was, you know, a hundred years ago. We’ve, we’ve slept since then. You know, the, these are not necessary evils.

This is about understanding the candidate and managing us from an HR perspective and, and from a recruiting perspective is managing risk. It’s about understanding your candidate in a deeper way, like it, like that necessary. I hear that almost every time. When people refer to background screening and background checks, they say, oh, it’s a necessary, well, I have to do it.

You know, I have to do it. You don’t have to do it. You should want to do it. Because it gets you to understand the candidate at a deeper level. But I, I, it’s a trigger for me when someone, when, when folks say that, and it relates to background screening, it’s like, you should wanna do it. Like why isn’t that it isn’t an evil, first of all?

Scratch that word. It’s [00:20:00] actually helpful.

Eric Ly: Yeah, that’s a really insightful point. And, uh, You know, we’re one of those companies that is, you know, certainly trying to, you know, create a new reputation for what background checks are all about and you know, how background checks can work. But, you know, one of the really interesting scenarios is, you know, imagine if.

As a result of a background check, you as a, you know, candidate that was looking for some kind of work, uh, you know, had a, had a badge on your profile mm-hmm. Uh, on that platform, you know, that indicated that you had some kind of, you know, specific, uh, experience or you were. You know, even cleared, you know, uh, of, uh, you know, any, you know, criminal, you know, history, right?

Um, you know, that would put you ahead, you know, uh, in competition with other workers that are, you know, buying for the same position. I think

William Tincup: that, uh, again, we, you know, goes back to a broad, a broader statement. If you have nothing to hide then, or nothing to fear, [00:21:00] then you should love these things. Again, you know, but I think that people there are just stigma, historical stigma, and also people that do have things that have, they don’t like credit checks, they don’t like background checks, you know, because they have things that they’d rather other people not know about.

Like, that’s fair. Like I get that. I mean, I understand that argument. It’s just, you know, from an employer perspective, I think the more you can know about a candidate, The more you know, the more informed hiring decision you can make. And then as it goes into employment, again, understanding the employee at a deeper level and understanding what’s going on in their life helps you.

It does, it doesn’t harm you at all. Eric, this has been fantastic. Thank you so much a for your time, but also for, for educating us on Carmen. Check. It’s a pleasure,

William.

Eric Ly: Nice to talk to you.

William Tincup: Absolutely, and thanks everyone for listening to the Use Case podcast. Until next time. [00:22:00]

The Use Case Podcast

Authors
William Tincup

William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.


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