Background and challenge
A leading background screening company was seeking strategic growth opportunities in the broader preemployment and human capital management (HCM) solutions and services space. The company had developed a long list of opportunities to pursue and was looking for a strategic fact base upon which to set its go-forward strategy.
The company engaged L.E.K. Consulting to develop a robust fact base to inform strategic decision-making. In particular, we were asked to develop a baseline outlook for the core background screening market, assess the various growth opportunities available to the client and drive consensus on the best path forward.
Approach and recommendations
We began by evaluating the client’s core business, which included sizing the current market, segmenting the core market and customers, analyzing key market drivers and trends (e.g., the evolution of the gig economy), and examining the competitive landscape. After a thorough initial assessment, we created a custom framework to assess available growth opportunities for the client. To inform our findings, we conducted a comprehensive survey and interview campaign with market participants and analyzed secondary research.
We also assessed several growth scenarios for the client. First, we evaluated opportunities to penetrate white space and grow market share within the company’s core markets, specifically focusing on user conversion and competitive differentiation. We further examined the potential to capture additional value by expanding current background screening use cases into new industry verticals and customer segments. Additionally, we explored the option of launching adjacent services (continuous monitoring, tenant screening, preemployment assessment, reference checking, I-9 verification, Work Opportunity Tax Credit verification), estimating market attractiveness and fit with the company’s current preemployment offerings. Finally, we sized international markets to determine the most attractive geographic expansion opportunities.
We synthesized our analysis into an actionable set of strategic recommendations and worked with the client to determine the most viable options that will drive growth for its suite of HCM solutions and services.
Our research and analysis helped the client successfully uncover actionable growth opportunities in the background screening market and the broader HCM landscape.
Our insights built a strategic foundation to unlock future growth across a series of addressable areas, ranging from white space to value-add and adjacent offerings, thereby enabling the client to define its strategic direction with assurance and confidence.
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