This post aims to give an inside view of the industry to the customers who use employee background verification services. It will help them understand how the verification agencies compete and cooperate with each other to serve customers.
The background verification industry in India has emerged over the last decade to become a mature ecosystem with around 15-20 national and large regional players and literally hundreds of local players. India being a large country, with hundreds of cities and towns, 14000 police stations and 600 police offices, thousands of universities, it is impossible for a single player to have its own dedicated employees covering the entire nation. Relying on other verification agencies and providers to extend the geographical and logistical reach is the logical outcome.
Even the largest of the verification agency follows the outsourced model in which certain parts, if not all, of the verifications are conducted through a network of trusted partner agencies. At a certain level, the verification agencies may be competing with each other for the end user businesses, but at the implementation level, the agencies work with each other to extend their reach. For example, a large regional agency based in National Capital Region (NCR) may be in a position to manage all the verifications in the Northern region on their own or using their direct consultants. But they may enlist support of other regional agencies in Western, Southern and Eastern regions of the country. Also, they may select specific vendors for different types of verifications (viz. address, education, criminal) in each of these regions.
Using such a model would definitely mean sharing of the profits with other members down the value chain, but it will still be profitable than hiring their own employees in each and every part of the country and building the relationships that may be required for conducting educational and criminal checks. So the resulting value chain benefits customers as these lowered costs of operations lead to lower price for them.
In summary, the verification agencies ecosystem presents a very good example of ‘co-opetition’ where they cooperate and compete with each other to bring the best solution to the market.