Use Case Podcast – Storytelling About Sterling With Taylor Liggett

Welcome to Recruiting Daily’s Use Case podcast. A show dedicated to the storytelling that happens, or should happen, when practitioners purchase technology. Each episode is designed to inspire new ways and ideas to make your business better, as we speak with the brightest minds in recruitment in HR Tech. That’s what we do. Here’s your host, William Tincup.

Ladies and gentlemen, this is William Tincup and you are listening to the Use Case podcast. Today, we have Taylor on from Sterling and we’ll be learning about the business case or the use case his prospects and customers use to justify the spend with Sterling. Taylor, why don’t we do introductions first? Why don’t you introduce yourself and Sterling?

Yeah. Hey, good morning, William. Thanks for having me on. My name is Taylor Liggett. I am the head of identity services at Sterling. I oversee all of the identity related services that Sterling offers. And Sterling, for those of you who don’t know, we are one of the world’s largest background screening companies, so we have background check capability around the world. About 50,000 clients. Conduct just about 100 million background checks every year.

Small is [inaudible 00:01:17].

Yeah, we’re just finding our way.

A cottage business, family owned. Like a taco stand, but not. The identity services part is really, I’m really interested in it because I’ve obviously studied this space for a long time. And background screening, background checks, has always been extremely important, especially pre-hire.

(01:45)
It’s always been important in terms of the funnel for hiring to get to a certain point, whether or not you put it way out or you put it closer to when you do an offer letter, that you understand that someone doesn’t, especially criminal record and things like that. It’s always been a part of hiring, I mean as long as I can remember. But it’s also through the years, it’s been commoditized in some way or people have thought of it as commoditized.

(02:14)
I like that you and some of your peers are thinking about it more broadly as more of about their identity. Not just the check, which is again, as stated and covered, it’s important, but also looking at identity. Is this person really who they say they are? And then, maybe more of a continuous look at are they still who they say they are? Et cetera. Take us a little into a little bit more about the identity services part of Sterling.

Yeah, and I’ll just, something you said just got me thinking. Just an interesting anecdote, something that may help us frame the conversation a little bit is, I think that you’re right. Background check services are really ubiquitous at this point. Largely been commoditized in many ways, but there’s also a new revolution going on right now, which you’re getting at with identity services.

(03:09)
In case you didn’t know, so William Greenblatt, who’s the founder of Sterling, when he was first getting started in this and really helping create this space, it was really around lie detector tests if you can believe that. Back in the ’70s.

Oh, wow.

To early ’80s, that’s how this started. Then things, of course, evolved from there into criminal record searching and so on. Then, at the point in time of which this really changed into ubiquity was around 9/11 after that. In the wake of that, I think there are just employers, everyone had more of an awareness of this. We started to see huge shifts into that.

(03:48)
And that was also, let’s say fast forward into early point 10 timeframe, maybe a little bit before that, there started to be additional awareness of think about checking criminal records. How do you know where to check? And so, there were product development and innovation around trace and locator type products that helped employers feel more confident that, if I’m coming into their background check, there’s a tool that can essentially trace where I’ve lived to help them understand where to search for criminal records.

(04:25)
And there’s been a lot of innovation throughout the space since. But I think we’re really at a point now of the next big change. And this one I think is bigger than anything that’s come before it. And that’s on identity services. The way that I would just frame that simply is that how do you know that the person you’re going to run a background check is who they say they are?

(04:46)
And beyond, there’s a lot of middle ground here. This is not black and white. I think when people think about identity, they commonly think of just outright identity fraud. In other words, I’m Taylor Liggett and I’m pretending to be John Smith. That does happen. That’s actually happening more nowadays than I think it has previously.

(05:03)
But there’s also, I could say, “My name’s Taylor James Liggett. I could say I’m Taylor Jim Liggett,” for example. That would have huge consequences on my background check. I could transpose digits on my date of birth, mess that up, or my social security number. All those things are very impactful. When we talk about getting identity right, it’s one, weeding out outright identity fraud. But two, making sure that biographic data, as I would say it is also accurate so that you can have the best quality check that’s going to happen.

I love the fraud part of this because it’s risk management. It’s one thing that HR, finance, everybody in the organization cares about. The other part of this is I wanted to ask you about in terms of remote, like what we’ve seen through the pandemic and obviously what we’ll see for knowledge workers going forward. For a lot of knowledge workers, do you think fraud, the impetus to make sure that identity is verified? If Tim was coming into the office to do an interview or looking at his drivers, okay, fair enough. But if a lot of this stuff is done digitally or over the internet, et cetera, or Zoom calls, what role has remote played in the boom in identity services?

Yeah, it’s played a big one for sure. It was a perfect confluence of events that’s happened over the last couple years. COVID coming and just, there was a couple things that happened there. One was were tremendous fraud rings that started in terms of access to government benefits associated with some of the pandemic fallout around unemployment and government assistance programs and so on.

(06:54)
It just created this, I don’t know, marketplace criminal operations, for lack of a better way of saying it, focused around identity fraud. There was a lot of investment in identity fraud because the payoff was significant. And also, the risk factor’s different than what some of these folks typically do. And so, that happened. That’s the overall backdrop.

(07:16)
And then the whole shift to remote work, where virtually every employer in some capacity or another starts supporting remote work. Some all in, some middle ground. And that created the space for significant increases in opportunities in identity fraud for employment. What we’ve seen is a couple things.

(07:38)
One is the obvious that is maybe a little bit more innocent where people maybe just want to hide something about themselves to get a job. They don’t want their employer to know about criminal record or whatever. They commit some level of identity fraud, change their information, line of background check, that type thing.

(07:56)
But what we’re also seeing is we’re seeing people who are either outright unqualified for a job that may hire someone else to do an interview for them or pass an assessment test. That’s happening quite a bit and a lot easier in the age of remote work. And then secondly, we’re seeing people who will commit outright identity fraud to get into an organization to then have access to their proprietary systems, customer databases, things like that, to further their teams. Those are some of the things that we’re seeing on the fraud side of things.

Let’s back up real quick on and just unpack the services layer. Because I would assume, obviously a lot of this is driven by technology, of course. For the audience sake, where do we start with them. If they’re a Sterling client so they know you. All right. And all that good stuff. Now you’re going to go to them and say, “Okay. By the way, here’s something else you should be looking at.”

Yeah, yeah. This is a big effort we’ve been under really this year is when this started. And so, some of the discussions that we’re having, and I think the things that folks should know about the service side of things is that we have basically, what we have tried to do is all of the hard work so that employers can implement this as easily as possible.

(09:25)
In other words, they can essentially make a change. Background checks are set up typically in packages. Employers would say, “I want these type of components, these type of checks when I’m hiring this type of employee.” And they create a package around that. Adding identity is essentially as simple as adding it to a package. And then, once that happens, the employer would choose what level of identity verification they want.

(09:52)
There’s different levels in the same way one background check typically doesn’t fit every organization and every hire. Similar with identity. You may want to have something that has relatively low friction but still is going to accomplish a basic sense of identity verification. Or you might want to scale all the way up to something that introduces more friction but also has a higher level of confidence on the identity side.

(10:18)
For example, something like identity assurance level two or IAL2. And there’s in between options there. They would pick what identity verification solution they wanted, add that to their package. And then, the workflow essentially kicks off the rest. The way that we’ve configured this is it basically just becomes the first step.

(10:36)
Think about it as the proverbial bouncer at the door. Just make sure that the person who gets in for the background check is who they say they are. And that the information about them, their name, date of birth, social security number and address, that those are accurate and those are validated. And then the way that we have it set up is that that takes place during this first step. And then that information just automatically imports into the Sterling system.

Oh, cool.

That saves data entry, but also once it gets in there, we lock it down. We don’t allow someone to change it since it had just been verified. And then all of that verified information is then just used to process the background check.

Obviously, we use trust but verify, as a backdrop. But do you see this either now or in the future also verifying skills?

Yeah, I mean look, that’s a great point because one of the things that skills based hiring and just this move towards that is a big discussion right now. And here’s what I would say. For Sterling, it’s not just about verifying identity, it’s also about this move towards digital identity, reusable identity. It’s about giving people control of their identity, of the information about themselves. Privacy preserving principles, all of these things.

(12:05)
And so when someone goes through our workflow, we’re partnered closely with ID.me. And they essentially come out the other side with their own trusted digital identity that they can control and use in many different ways. And the real vision here expands beyond identity into digital wallet and other capabilities. And that’s where we get into skills.

(12:28)
Someone could have skills or certifications or other things about them that could be essentially validated, added to their digital wallet. And something that moves with that person. They come into an interview or a background check or whatever and they’re able to share those types of things about themselves.

I like that. I like the transportability. I believe you referred to it at one point, is just being able to take that wallet and then move around from job or internally, from one job internally to another one and not have to go through the paperwork again. It’s like it’s already there, it’s already been verified, et cetera.

(13:05)
I’d probably be remiss if I didn’t ask you about degrees or things like that. Is that a part of the verification process as well, is just a merit? Because years ago, back when there were resumes, people would say attended. In my case it would be intended SMU, but it wouldn’t put graduated. You never could tell. Okay, did they graduate from SMU or did they just attend? Did they go to a semester?

(13:34)
There’s a wonky bit. Do y’all look at these that now or in the future as something where you actually go to the school and verify that a degree was completed, et cetera?

Yeah, absolutely. In the scope of Sterling services, we can check just about anything that you can think of or that would be the type of check that you’d consider. Some of the standard ones that many employers set up are exactly what you’re saying, education. They want to check for example, the highest degree that the person has listed. Some do more than that, you can check employment history. Did this person actually work at this place? Did they have the title that they said? Those type things.

(14:18)
There’s a whole suite of services that employers can get at. You mentioned some of the other ones, criminal history, driving record checks, certifications, someone a nurse or a doctor. All those things, because to your point, it’s important and you want to make sure that what someone is saying is what it should be. And there’s different levels to this.

(14:44)
One is you’re hiring someone and a college degree is required, that type of thing. But another is, if you’re hiring a medical professional, you definitely want to make sure that that person is qualified and certified. Yeah. Those are all things we can offer. And I think where it starts to get very exciting is through the lens of identity. Those things in today’s world have to essentially be like we verify.

That’s right.

Every time someone gets a new job or moves, which is crazy because a lot of that stuff doesn’t change. It’s immutable data. And so, once we can shift that and move it so that that information’s verified once, goes under control of the individual. And it moves with that individual job to job or beyond that, that gets really exciting.

Yeah, I think what I’m looking at is with the identity services in particular where it’s credentialing around highly regulated industries, like you mentioned nurses. But I was also thinking about investment bankers and real estate agents, where they have to keep their license current. Someone could easily put that they’re a real estate agent in pick a place. But their license might not be current, et cetera. I could see where that actually, there’s a lot of that’s fluid.

Yeah. No, that’s a really good point. And one of the things, so Sterling recently. Recently, time flies. Well, this is maybe a year or two ago, we won a contract with FINRA, which is the Financial Industry Regulatory Authority. They work at the capacity of SCC. They essentially regulate the securities industry.

(16:19)
And that one of the things that they do is, if you’re going to be a broker dealer and involved in that space, you have to go through a number of checks. And one of those is an FBI-based background check where you have to go and get fingerprinted. And then the fingerprint is essentially channeled to the FBI. The results are returned to FINRA and the respective employer, the financial institution. And there’s a whole lot that goes into this. And Sterling, we now manage essentially that whole program.

(16:51)
And there’s a lot of innovation that could be done in a space like that. From the individual needing to go typically every year to get fingerprinted and have those checks done. Imagine in a space where someone could, instead of having to go and get fingerprinted and do all that. Have control of their own biometric and share that, release that information on a regular basis. There’s just a lot of things that can be done. And financial services base is another great example.

I love that. Let’s do some bio side stuff for a second. One is questions that practitioners should ask of you and your team in terms of this is their first time buying identity services in this way. What are the questions, what do you love to hear? If you could script it, what should they be asking you?

Yeah. I think what I would say to employers, whether they’re existing clients of Sterling or working with their own background check provider, is when you’re talking about identity services, the first thing is finding a product set up that makes sense for your hiring space. As I mentioned previously, that’s going to differ. What type of candid experience are you trying to provide? How much fraud or risk do you perceive you have right now?

(18:19)
And based on some dialogue around that, typically we can really get into the right type of setup. Do you want to verify, for example, one piece, one proof point of identity? Do you want two, do three? Those are the types of questions initially that I think clients and prospects need to get into.

(18:46)
Additionally, what I would say beyond working with Sterling is as… This is something, William, that employers are really finding their way on. We’ve done some surveys where up to 75% of HR practitioners either mistakenly believe this is already happening as part of the background check, or don’t know if it’s happening. We have a huge uphill climb to just educate employers on what is and isn’t happening. And I appreciate podcasts like this because hopefully employers listen to this. And say, “Oh, shoot. That’s actually not happening as part of the background?”

(19:21)
I mean we estimate 99% background checks done in the US don’t have identity services. We’re just getting started out on this. I think that’s the biggest thing for employers to dig in on. Is what is and is not happening in your hiring process right now from an identity perspective. I think that’s just the starting point. And once that is established, then I think talking with a company like Sterling and understanding what you can do to implement identity services is a really important conversation to have.

Who owns identity verification internally for the customer? Is that centralized in HR or in recruiting? Is it a role? Who does that? Because in my mind, I see it as the Wild West and it’s all over the place. And different people are doing it differently. But if we could just blank canvas it, how should it be done?

Yeah, I mean, look, this is a really important conversation to have. Because what has happened is HR has, in my opinion, just unfairly been tasked with the identity verification component. And if you think about it, this is really a security type thing. This is something that lives in that space. But because HR is responsible for bringing employees in, this falls into the sphere of background screening.

(20:41)
And then what has also happened, and part of what has complicated this is we do have an I-9 process in the US. And that process is largely based around work authorization. Are you a US citizen or otherwise have the ability to work within the US? But a component of that is identity verification. And so many employers just rely on that process.

(21:07)
But the reality is that process was created in 1985. It basically has not changed. It is predicated around a just in-person document check based around work authorization. And that is typically handled by HR. if you unpack that, the first thing that’s a problem is it’s happening after you hired the person. That’s already an issue because now whatever’s happened downstream from that, there’s already a vulnerability.

(21:35)
Secondly, the vast majority of employers we talk to when they’re going through I-9, they’re not taking the time to look at these documents and say, “Okay, is this the same name, date of birth, SN, et cetera, that the person gave us back when they did background check?”

(21:48)
And then thirdly, typically that’s done by an HR manager. And how many HR managers do you know that are trained in document fraud and how to detect? The fake documents that are out there are so good, most trained humans have trouble detecting. That’s why we use technology. There’s a whole lot that I think HR needs to look at there and tools that can help take that burden off them and reduce risk for companies.

Oh. We can spend another hour talking about this because this just fascinates me because I think when you framed it up, it’s like most practitioners, both in recruiting and in HR, probably don’t know exactly what’s being done as it relates to identity.

(22:33)
I think the background screen and the background check, they might have an idea of what’s there, but not with as it relates to identity. And again, it’s something that, as we manage risks, we need to be more proactive and understanding what we’re doing and what we’re not doing. I think all that’s fascinating.

(22:55)
Let me ask you, customer success without brand names. Stories that you just love to hear where companies maybe are using the identity services, Sterling’s identity services in a way. And you’re like, “Oh, that’s cool, that’s really nice.”

Yeah, look, I’ll give you two quick examples. Both very proud of these companies and what we’ve been able to do. The first is a national staffing company that, in this instance at least, placed people at big box retailer. And what they found was there was significant identity fraud that was happening where people would come in, they’d start working at this retailer. And within the first couple days, typically sometimes longer than that, they would steal huge amounts of stuff, tens of thousands of dollars sometimes worth of merchandise. They’d be out. And they’d say, “Oh, okay, go find William Tincup.” And then they’d find out, “Oh, wait. That wasn’t William Tincup.”

(23:50)
And so, people were committing this level of identity fraud to come in and commit that crime. And we were able to put identity verification right up front in the process, weed those people out. Caught a lot of fraud. And really stopped that from being a problem that happened. That helped tremendously with this company, with their client. That was a great success story.

(24:10)
The second one is a company that is in the financial services space that was hiring people. And what they found was there was numerous instances where they’d find criminal records luckily, or some type of issue would bubble up afterwards. They’d go back and say, “Wait a second. How did we miss this in the background check?” And it turned out the person was wise enough to throw off their SSN, or throw off their date of birth, or throw off their name. And that caused records to be missed.

(24:35)
They implemented identity. And in a six month before and after timeframe, we saw the rate of criminal records being delivered to them increased by almost 22%. And so, that’s another great success. And honestly, William, that’s a piece we are just scratching the surface of. We are literally just now getting into the data of before and after comparisons on clients implement this. And the increase in records delivered is really substantial. It’s really going to be compelling as we put this together more.

It’s almost terrifying on some level.

It’s terrify.

It’s like, if you ever really hung out with a hacker, if you really knew what was going on, you’d be terrified every time you got on the internet. This is happening. And instead of having your head in the sand as a practitioner, you got to pull your head out of the sand and go, “Okay, it’s happening now. Let me know to what extent it’s happening and then shore up some of the processes, so where it happens less.”

Precisely.

Taylor, this has actually been wonderful. Thank you so much for your time today.

Thank you. William, really appreciate it.

Absolutely, and thanks for everyone listening to the Use Case podcast. Until next time.

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