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Human Resources Outsourcing (HRO) is the fastest growing subset of the more comprehensive Business Process Outsourcing (BPO) sector. In a BPO arrangement, an external provider assumes responsibility to own, manage and administer a particular business process. The broad category of Business Process Outsourcing includes such outsourced functions as information technology, logistics, facilities, finance and accounting. Within the huge realm of BPO, HR Outsourcing is a large and complex universe in itself, encompassing the many different functions associated with the HR department. One of these outsourced HR functions, pre employment screening, is quickly growing into a multi-billion dollar industry.

Pre employment screening is "a non-discrimination action that weeds out any fraudulent data and misrepresentation provided by potential employees." The Society of Human Resource Managers estimates that 53% of all job applications contained false information in 2003. Checking on the previous education, employment, and criminal activities of an applicant provides companies with documentation in negligent hiring and retention suits, and is a tremendous tool in preventing violence in the workplace. Many companies find that, when they engage in pre employment screening, turnover plummets, as do security and safety problems.

Consequently, employment screening can save companies a great deal of capital.

• On average in U.S. businesses, at least half of all new hires don't work out and it costs $7,000 to replace a salaried employee, $10,000 to replace a mid-level employee and $40,000 to replace a senior executive
  
• Workplace violence costs employers $36 billion annually
  
• Annual losses stemming from computer breaches in Fortune 1000 companies amount to $59 billion, including inside and outside breaches (with inside jobs costing businesses an average of $450,000)

Beyond the cost saving realized by performing pre employment screening, companies can save even more by outsourcing this function. Outsourcing the employee screening function has several advantages over performing the activities in-house. Pre employment screening firms can pass savings from their economies of scale on to their clients. Additionally, companies can forgo investments in pre employment screening technology that would be required for streamlined in-house employee background checks. Furthermore, in relinquishing control of this function to a firm with expertise in the domain, the HR department can shift its focus to more strategic functions.