The employment screening services market is expected to grow significantly, reaching an estimated value of $12.62 billion globally by 2030, according to a recent report by The Insight Partners.

This market expansion reflects the increasing importance of employee verification processes as a critical element of recruitment across industries.

Small and medium enterprises (SMEs) as well as large corporations are making considerable investments in employment screening and verification. This trend highlights the shift from traditional in-house verification processes to the use of more reliable third-party vendors who offer comprehensive pre-hiring and post-hiring screening services. However, the use of third-party vendors for these processes introduces potential risks, including data breaches, which has made companies increasingly vigilant about the security of employee information and compliance with regulatory standards.

Data Security and Regulatory Compliance in Focus

As companies outsource employment screening services, the security of employee data has become a paramount concern. The potential for data breaches when using third-party vendors has led enterprises to place a strong emphasis on protecting employee information. Past incidents of employee data breaches have further reinforced the need for robust data protection measures, prompting businesses to invest more in safeguarding sensitive information.

Key players in the employment screening services market, particularly in the US and Europe, are required to demonstrate strong data breach protection and information security capabilities to maintain their market position. Compliance with domestic and international privacy laws is also critical for these companies to operate effectively and gain the trust of their clients.

Regional Insights: North America Leads the Market

Geographically, the employment screening services market is segmented into North America, Europe, Asia Pacific, the Middle East and Africa (MEA), and South and Central America (SCA). North America dominated the market in 2023, holding a 49.1% share. In the United States, background checks are considered an integral part of the recruitment process. According to the Professional Background Screening Association (PBSA), approximately 95% of US employers conducted employee background screenings in 2023, with 77% having a documented background screening policy. Criminal record checks are among the most critical aspects of these screenings, with 94% of respondents indicating their importance in evaluating potential hires.

The demand for employment screening services in the US is also driven by the high number of immigrants seeking employment, which necessitates thorough background checks on migrant applicants.

Europe is the second-largest market for employment screening services, followed by Asia Pacific. The Asia Pacific region has seen a surge in demand for these services due to business expansions and the creation of new job profiles, particularly in countries like China and India. As the qualified workforce grows, so too does the risk of employee fraud and scams, prompting companies to intensify their screening processes to protect against potential risks and ensure a secure work environment.

Service Segments: Verification Services Dominate

The employment screening services market is segmented based on services, applications, and organisation size. Among the service segments, verification services held the largest market share in 2023. These services involve the thorough investigation of candidates’ employment histories, professional licences, and educational qualifications.

The verification process is essential because many job applicants provide inaccurate information on their resumes. According to the Wall Street Journal, approximately 34% of job applications globally contain false information. Verification service providers help employers mitigate the risk associated with fraudulent information, reducing the liability of having to scrutinise every detail themselves. The Association of Certified Fraud Examiners reports that false information on resumes has resulted in significant financial losses for companies, with costs in North America alone amounting to approximately $600 billion in recent years.

Future Outlook

The employment screening services market is poised for continued growth as companies across the globe place greater emphasis on secure and compliant hiring practices. With North America leading the market and significant contributions from Europe and Asia Pacific, the demand for comprehensive screening services is expected to rise. The focus on verification services, in particular, underscores the importance of accurate and reliable background checks in today’s competitive job market. As companies seek to safeguard their work environments and maintain trust, investment in employment screening services will likely continue to grow, driving the market towards its projected $12.62 billion valuation by 2030.