Podcast: Fama CEO Ben Mones on the Technology of Background Checks

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Transcript

Mark:

Welcome to PeopleTech, the podcast of the HCM Technology Report. I’m Mark Feffer.

Mark:

My guest today is Ben Mones, the CEO and Founder of Fama. They use AI to examine the behavior of candidates and employees. Just like everything else, today background screening is becoming more complex and more reliant on technology. That’s what Ben and I are going to talk about on this edition of PeopleTech.

Mark:

Hi, Ben, thanks for coming by. To start, can you tell me a bit about what Fama does, and how does it do it?

Ben:

Yeah, sure. So Fama’s the world’s largest social media screening company. You can kind of think of us as like the modern background check. Instead of looking at were you low level criminal offender six years ago, we’re much more focused on what we think employers and customers care about today. So things like intolerance, threats, harassment, the sorts of things that might alienate customers or make good people want to leave a company if those sorts of employee behaviors are left to kind of thrive within the organization. We do it by giving employers the tools and insights they need during the candidate screening process to bring in insights from the publicly available web, whether it’s social media, news media content, offline sources like LexisNexus, for example, but really enabling customers to sort of productize insights from the public web, bring them into their talent screening process and get ahead of risk related to things like intolerance, threats, harassment, that kind of thing.

Mark:

Now, is this all social media when you talk about the public web or is it coming from other sources as well?

Ben:

Yeah. So think about anything that’s publicly available online about a person. So anything that you can discover it’s really accessible, nothing on the dark web, deep web, anything like that, but yeah, consider publicly available social media, news, web content, anything that might appear on Google, for example. We offer a few different products so customers, for example, that might need to check every database, for example, we’re able to go look at things like litigation, offline news, et cetera, things that might have appeared in college newspapers, for example, that maybe don’t appear on the publicly available web. So really depending upon your requirement as an organization, we can arrange a level of depth and comprehensiveness that fits the kind of role that you’re hiring for today.

Mark:

Now, is the idea to uncover bad behavior or is there more to it than that?

Ben:

Yeah. So maybe just taking a step back. I like talking about what it’s not. So Fama is not a score. This is not a thumbs-up or a thumbs-down. It’s not a yes or a no or a recommendation on a candidate, but instead it’s a way for employers to identify the sorts of things that are relevant to building a great brand or building a great culture within their organization. So companies want to look at things like intolerance, threats, harassment, sorts of things that I alluded to, but they may have very specific needs. They might want to look at references to company leadership. They might want to look at references that are maybe industry specific, but really what we’re doing is not telling you as a customer if this person who’s coming into your organization is good or bad. We think it’s very difficult for a third party to kind of put a score on a person especially using automation, that sort of thing.

Ben:

So we decided to focus on getting really good at identifying the sorts of things that employers care about today that they’ve already demonstrated sort of a policy or an interest in screening for today, but bringing in and encompassing the publicly available web to do that screen. So customers, for example, when they come on board, they can set up and say, “These are the things that we care about. We want to identify any reference to call it sexual references, illegal drugs. We don’t care about cannabis because we’re hiring California. But these are the things that we want to know about should they exist in a candidate’s publicly available digital identity,” and Fama will do the work of the finding the right person online, filtering through their content on your behalf and only escalating for user review the sorts of hits that they’ve defined in their setup process as relevant.

Ben:

So really think about it like clients can in background screening terms, build an adjudication matrix directly in our software. Typically, that’s done in partnership with a background screening company or we have an integration today essentially allowing them to line up one to one any potential candidate behavior they could consider adverse and our technology’s ability to filter for that sort of behavior. So really what we’re doing is saying, “We’ll do the hard work of finding the right person and filtering through their content, but you, customer, you’re the one who defines and tells us what’s relevant to building a great business,” because you can have … We’ve been doing this for seven years now and customers in the same industry, in the same geography, of the same company size, may look at very different things when it comes to what’s important to building a great brand of culture for them. So it’s really about us doing the hard work, the heavy lifting and allowing the customer to define and say, “Hey, these are things that we care about.”

Mark:

It’s an interesting term you just used. Adjudication-

Ben:

Matrix. Yeah.

Mark:

Matrix.

Ben:

It’s a bit background screening speak. Yeah.

Mark:

Yeah. So what’s an adjudication matrix?

Ben:

Yeah. Yeah. So think of an adjudication matrix as basically your ability to tell the technology as an end user, “These are the things that should they exist, we would want to know about them. Two, we want to have an escalation path within our organization should they exist that makes it clear how we deal with these sorts of insights in a legally compliant and consistent fashion.”

Ben:

So Fama’s technology, any sort of background screening solution, any time a third party’s engaging with another business and allowing that business to sell them public data that’s compiled about people to be used in the hiring, benefits, granting or credit decision, it falls into the FCRA. Part of the FCRA is saying, “We need to have consistent frameworks for how we make decisions. We need to be achieving things like maximum possible accuracy, for example, in our reporting.”

Ben:

So when I say adjudication matrix, what I mean is that clients can essentially take their policies that are internal to them, the consistent frameworks, for example, that they use to adjudicate background screening hits, meaning determine the appropriate kind of course of action and pathway within the organization to follow when they do get a hit. We allow customers do that natively within our solution. So rather than taking the tech and bringing it into an existing process, we’re much more focused on how do we take your process today, allow you to set that up inside of Fama so you don’t have to do any other outside work out of the application, but really adjudicate the hits that come back in a process that’s consistent with how you’re doing it today.

Mark:

Now, it seems like the universe you’re working with, as it were, social media or landscape or public web landscape has probably become a more complicated thing to deal with over the last say, 10 years. Is that right? Am I right about that? Your technical challenge has gotten harder?

Ben:

I would say the industry itself from a social media usage standpoint, especially post-COVID, post-pandemic, people are sort of relegated to their homes and spending more time online, more time on the internet. I have to get the exact study, but I think social media usage is up 75% post-pandemic, and posting is actually up north of 50% compared to the same period prior to the pandemic. Interestingly enough, the ways that people post, the areas that they engage online has changed, but that’s in the normal course of business, the evolution of new social media sites that are popping up, new sources, new ways that folks are engaging online. The bigger changes that we’ve seen have been in more, the different sorts of flags that customers might care about.

Ben:

I’ll give you an example. Prior to the pandemic, we had no clients that were interested in anti-vax behavior, for example, but suddenly we started seeing companies in the healthcare industry, for example, in the pharmaceuticals industry, those that were either manufacturing the vaccines or distributing them that wanted to identify, “Hey, is there any anti-vax, for example, promotion that this person is making. If they’re coming to join a company where we’re either procuring or distributing the vaccines, that’s a real risk to our business.” So it’s really interesting, Mark, that it’s less of the sources … That’s kind of just like standard course of business of where the information exists online … It’s much more about the sorts of risk, I think, that have evolved over that same period. That’s really been the thing that’s changed. That means that our team has to do things like develop new algorithmic models to suss out and identify anti-vax behavior online in the same way we’ve done with things like intolerance, threats, harassment, illegal drugs, sexual references, that kind of thing.

Mark:

How about the business? Do your customers have different kinds of concerns than they did in the past? Are they looking for different kinds of things?

Ben:

Absolutely. That is one of the reasons that we’ve done our best to enable a solution where we’re kind of handling the rails of the process rather than deciding what goes in and what goes out. So if you came up with a score, for example, and you’re a business that’s saying, “Hey, we’re going to score people on a scale of one to 100,” you would really have to, I think, evolve the definition of that score over time, as the sort of expectations of consumers from the brands they purchase from, expectations from employees that join those companies, as those have evolved over time, the company would need to, in that scenario, evolve its matrix of the things that it’s filtering for, screening for and scoring on.

Ben:

With us, we knew that those sorts of things would change over time. That was a very intentional product step that we took. So we said, “Let’s get really good at the things that won’t change: finding the right person online, reading text and image just like a person can and enabling our clients to customize and configure their own criteria with ease without us having to do any new technical work.” I would say that while the things that companies have identified as risky per se have evolved over the past seven years or so, it hasn’t required us to make too many changes from a product standpoint because of the foundation of configurability and customization that we built in from day one.

Mark:

Now, in the last two years or so during COVID a lot of people were working at home. It seems to me you’d probably have a really interesting perch to look at what folks are doing online that they might not otherwise be just because they’re using it so often. They’re online more. They’re isolated. So did you notice anything particularly interesting, work-related or not, that happened during COVID that was going on?

Ben:

I would say in the … Hard to believe it’s been 24 months now at this point, I mean even framing it that way, it’s hard to comprehend … But certainly as you outlined, we talked about previously, people spending more time online, posting more. That means the digital universe expands and so too does the potential universe of risk to the employer. That’s kind of just a simple fact. More content online, more potential that there could be risky behavior out there.

Ben:

The real business change that we’ve seen was really an increase in adoption. It’s one of the reasons that Fama was able to raise a $10 million Series B earlier this year, something we’re really excited about. It’s only on the heels of the post-COVID growth that we’ve really seen the momentum pick up. I think it’s really because employers are getting fewer and fewer opportunities to meet their people in person.

Ben:

There are so many, call it qualitative, call it anecdotal, but these different elements of the candidate onboarding process, whether it was, did someone show up on time to an interview? Did they send a thank-you note? Did they, in some businesses, bring their resume in on the nice paper? Did they make eye contact? Did they comport themselves in a way that’s reflective of the values of our organization? That’s all out the door when you’re hiring remotely. We’re in these Zoom engagements, these Zoom meetings, where the only thing you can really comment on is someone’s lighting and what time they logged into the meeting. So I think companies are now starting to identify, “How can we begin ensuring that sure, this person is qualified, sure, this person has the experience, sure, they referenced well, but how are they going to reflect the values that we know make us great, that make our brand so attractive in the eyes of our clients, that make customers want to keep coming back? How do we ensure that person is going to extend those values in the eyes of our customers or our employees rather than detract from them?”

Ben:

So I think that has been one major element since COVID. The remote work shift where you’re just seeing new tools and techniques that hiring managers, talent screening professionals have to pursue as this sort of external pressure is placed on the business, which is to say, “Hey, look, we can’t use the same tools and techniques before. We still need to get to the same outcome of a well-vetted candidate, but we maybe don’t have the same process and workflow that we could go through.” In a pre-pandemic environment we say, “Hey, just bring Jane down to the office, and we’ll do the full six-hour session with her and see what it looks like on the other side.” That’s all happening remotely now for a good number of companies, at least our clients, today.

Mark:

Okay. So how do you see the business evolving in the next few years? What are the sort of trends or directions you’re keeping an eye on that you think are going to influence your product decisions, your roadmap and all of that?

Ben:

Well, I think you have a few kind of key trends. One of them is certainly COVID and remote work. I think that will have a continued effect on the overall kind of screening mix and the tools that users are accessing today. If you think about talent assessment, talent acquisition, you think about hiring shared services, these are all teams within organizations that are facing external pressures that they haven’t before. I think the screening mix is one of them. We’re starting to see, “All right, what are the tools and techniques we’re using?”

Ben:

I think the second piece that’s sort of shaping how we think about product in the future are some of the changes in the compliance arena. We’re starting to see that there are certain counties and certain states that are restricting the amount of information that companies are able to use when running a background check. For example, there’s legislation in Los Angeles County, where we are here, where Fama is headquartered, that doesn’t allow employers to use date of birth when running a background check on an individual, which makes it very difficult to match accurately and identify and say, “Hey, these are the background check hits on the individual in question.”

Ben:

Now, this is all part of the broader Fair Chance argument, Fair Chance legislation that essentially is trying to give folks that maybe have a criminal record a clean shot in the future. They did their time, time to reintegrate, et cetera. It’s something that a lot of people can get behind. Me personally, big proponent of second chance hiring, wrote a piece about it last year. It was right in the middle of everything going on with COVID, but last April Biden called it Second Chance Month just as a way to kind of get the workforce expanded and bring non-violent offenders back into the workforce and really pushing that as a way to kind of manage some of the labor concerns that we’re having as a country right now. I think you’re going to see more of that.

Ben:

I think you’re going to see more of those compliance changes that in addition to the remote work external pressure, you’ll begin seeing companies that are saying, “All right. Well, now we have compliance changes on the types of data records that we can access, that we historically access today to solve this problem of what’s the risk this person is bringing into our organization.” Now with these compliance changes coming into play, you have the same user, the hiring manager, the talent assessment user, that is essentially saying, “Okay, I have fewer tools to use. I agree.” Many folks are on board with Fair Chance hiring. It’s something that both employers and customers can get excited about something. I think that we can all align around, but that still leaves the HR manager or the talent assessment person with this question of, “How do I ensure that this person is going to again, extend my brand in the eyes of my customers and build my culture along the value lines that we’ve sort of identified as being critical for our business?”

Ben:

So I think that’s the real question where it’s not expectations from the market has changed on hiring a great person, but they have fewer tools to access and fewer tools to use. I do think you’ll see employers with these compliance changes, that external pressure on the screening tool mix is going to drive more adoption of solutions like ours and really require us to start thinking about, “Okay, well, how do we arrange product configuration, for example? How do we arrange data sources, price point, turnaround time, ongoing monitoring?” All of these different elements of background screening that we’re not in today, but areas that we’re interested in pursuing, how do we begin evolving our product mix to fit these sort of external pressures that our users are facing today? I think those are two elements, the kind of remote work piece and the compliance piece, that are really driving changes in our industry right now.

Ben:

I think more generally in backgrounds, you’re just seeing a huge amount of consolidation and M&A activity where I think the folks that can innovate, the folks that can differentiate in a highly consolidated market will be the ones that win. So really exciting time to be in screening. Obviously, hiring’s never been at the pace that’s happening right now, and all those folks are getting checked. It’s a good time to be in screening, but it’s a time of, I’d call it great dynamism, where we’re going to see a lot of changes over the next few years as a result of some of these remote work and compliance changes over time.

Mark:

Ben, thanks very much for taking the time today.

Ben:

Appreciate it. Thanks for having me on, Mark.

Mark:

My guest today has been Ben Mones, the CEO and Founder of Fama. This has been PeopleTech, the podcast of the HCM Technology Report. We’re a publication of Recruiting Daily. We’re also a part of Evergreen Podcasts. To see all of their programs, visit www.evergreenpodcasts.com. To keep up with HR technology, visit the HCM Technology Report every day. We’re the most trusted source of news in the HR tech industry. Find us at www.hcmtechnologyreport.com. I’m Mark Feffer.

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