Background Check Services in the US Industry Market Research Report from IBISWorld Has Been Updated

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The Background Check Services industry enjoyed encouraging growth over the past five years; however, it was a period marked by mixed fortunes. For these reasons, industry research firm IBISWorld has updated a report on the Background Check Services industry in its growing industry report collection.

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Strong growth from businesses will be mitigated by an increase in vacancy rates.

The Background Check Services industry enjoyed encouraging growth over the past five years; however, it was a period marked by mixed fortunes. The industry performed poorly in the wake of the economic downturn, with revenue falling between 2010 and 2012. Rising unemployment reduced the need for businesses to screen for job candidates, while an increase in rental vacancy rates diminished demand from apartment leasing companies. Additionally, according to the Society for Human Resources Management, the percentage of businesses that conduct credit and criminal background checks slightly decreased from 2010 to 2012, limiting demand growth for industry operators. From 2013 onwards, the industry has exhibited steady growth. Improvements in the labor market and a decline in rental vacancy rates have boosted demand for background check services. As a result, IBISWorld anticipates revenue to rise slightly in 2015, following a great year in 2014. Overall, the industry is anticipated to expand marginally in the five years to 2015.

Over the past decade, the Internet has been the primary driver for the Background Check Services industry's growth. Traditionally, background check services were largely manual. However, the Internet has streamlined and automated many of the processes performed by hand. According to IBISWorld Industry Analyst Gavan Blau, “The growth of online services allowed operators to more easily enter this industry, intensifying Internal competition.” Competition has prompted a period of consolidation within the industry, as larger players strive to protect profit margins and achieve market dominance. In the five years to 2015, the number of enterprises is anticipated to fall marginally. High levels of internal competition, coupled with weak demand early in the period, caused industry profit to decline significantly over the past five years.

In 2015, the four largest firms are expected to account for less than half of industry revenue, indicating a low level of market share concentration. Historically, industry operators required considerable expertise to conduct investigations and detailed background checks. However, the growth of online technology over the past decade has provided an opportunity for firms to enter this industry. According to the National Association of Professional Background Screeners, most industry operators are small firms focused on aggregating public records. Less than 2.0% of industry firms are large background screening providers that operate at a national or international level. “Over the past five years, market share concentration has marginally increased due to some consolidation among leading industry firms,” says Blau. For instance, Sterling Infosystems' 2011 acquisition of Axciom's background screening business doubled the market share of one of the larger firms in this industry. Likewise, Symphony Technology Group acquired industry major player LexisNexis in 2013, forming First Advantage, one of the largest global screening analytics and identity solutions providers.

IBISWorld estimates that industry revenue will increase slightly in the five years to 2020. During that time, industry operators will benefit from a slow improvement in the labor market. Also, businesses will turn to industry operators as they hire more employees. This factor will be bolstered by an increasing number of cities and counties that have enacted laws banning companies from asking applicants whether or not they have been convicted of a crime. However, strong growth will be mitigated by an increase in vacancy rates, which will diminish demand from apartment leasing companies.

For more information, visit IBISWorld’s Background Check Services in the US industry report page.

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IBISWorld industry Report Key Topics

Operators in this industry offer tenant and employment background screening to consumers, landlords, corporations and other organizations.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
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