Prices have increased slowly as businesses hire more people, boosting demand for background checks
Los Angeles, CA (PRWEB) August 28, 2014
Reference and background checking services have a buyer power score of 3.9 on a five-point scale, which reflects a high level of buyer negotiation power. Service prices are expected to increase in the three years to 2014, albeit slowly. According to market research firm IBISWorld, rising demand for services has helped boost prices, but the high level of competition in this market has limited price growth, favoring buyers.
This market is characterized by a significant level of competition due to the low level of market share concentration. In addition, IBISWorld estimates that high profit margins and low barriers to entry have prompted players to enter this market, driving up the total number of suppliers. Major vendors include ADP LLC, First Advantage, Kroll Inc. and US Investigation Services. As a result of the saturated market, price-based competition is prominent, reinforcing buyer power.
A significant portion of reference and background checking services are conducted online. Because services are performed online and are increasingly automated, wages have gradually decreased as a share of revenue. Furthermore, electronic equipment required by the vendors has been decreasing in price. Consequently, suppliers of reference and background checking services enjoy increasing profit margins. Strong profitability in the market benefits buyers by giving room to negotiate prices down.
Over the next three years, service prices are forecast to continue rising at a slow and steady rate. During the period, competition will intensify further as more firms enter the market, helping to moderate price growth. For more information, visit IBISWorld’s Reference & Background Checking Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of reference and background check services. Reference and background check services are used to evaluate employees before job placement. Reference and background checks look into the history of past employment, possible criminal records, drug use and other relevant issues.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.