Businesses are beginning to pick up the pieces that were shattered by the pandemic and Great Recession, and slowly returning back to a degree of normalcy. In many ways, however, they have also changed forever, but that doesn’t come as a surprise considering the mass societal disruption. For instance, the 1918 flu pandemic influenced the mass adoption of telephones.
The Great Depression sparked the development of Social Security. The post-war age of prosperity led to the start of modern advertising. The Cold War put space exploration on overdrive, which in turn led to strides in computing, telecommunications, and consumer technologies.
In the case of the 2020 pandemic, there were a series of changes that stemmed from technological adoption, essentially converting businesses to virtual operations as much as possible. Businesses that had to close their physical offices had to pivot to become a remote work environment.
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It quickly became clear that the widespread remote work setup was more than just a temporary bridge to get through a difficult time. Business and consumer behaviors adapted quickly, and naturally changed, with many even having mixed feelings of attempts to go back to the pre-pandemic ways of business.
The virtual environment certainly offers many perks for employees, but there is one recent oversight by businesses that need to be ramped up in the post-pandemic world regardless of how physical or virtual the business environment may be, and that is due diligence.
Important for more than just finances
The due diligence process is most popularly attributed to HR, finances or taxes, but there is much more at stake when the process is ignored. From an operational standpoint, due diligence covers the diagnostics of key aspects of target organizations.
Commercially, it covers the collection of data on main market trends and customer perception of brands and target companies. Due diligence takes on many forms, and according to a report by Deloitte, it is already possible to anticipate some effects caused by the pandemic that will impact the performance of due diligence. As far as “the new normal” is concerned, the report states that:
“Although the financial impacts of the crisis are not perpetual, we expect changes in consumption habits in the post-crisis, which should become permanent business drivers for companies. For some industries in particular, during the due diligence process, it will be necessary to consider aspects of the “new normal”, which means differentiating which factors do not represent perpetuity from those “came to stay” and will permanently impact the company.”
This directly impacts financial, commercial, and operational due diligence, which places great importance on background checks.
Background checks must come back into full swing
Since the onset of the pandemic, there have been many delays with background checks due to processing time. In most cases, this was caused by temporary closures of offices such as courts, businesses, and the administrative sections of higher education facilities and correctional facilities.
Many records these days are virtual, the delays in verifying the other pieces of information have made it difficult for companies to make business decisions with confidence. According to Elvis Dzebic, the Founder and CEO of Trazi Ventures and spokesperson for free background check service Unmask, there are many reasons why businesses need to go back to conducting background checks.
Dzebic, sheds light on this and says, “It all comes down to risk management,” says Dzebic. “Regardless of the size of the company, or whether business operations are in-person or virtual, background checks are needed to ensure safety, reputation management, protection of physical/digital assets, and so much more.”
Due diligence going forward
There are many digital tools and solutions available that can help businesses conduct all forms of background checks—including FCRA-regulated background checks, such as employee screening and casual public records checks of third-party vendors and suppliers.
Now that restrictions are being lifted from larger offices, higher education facilities, and government facilities, background checks can go back to being done in a thorough manner, even in the most virtual of business environments.
Of course, this needs to be done with respect to concerns over sensitivities. It is important for all confidentiality policies to be clear to each team member that is tied to the due diligence process, and they must understand the context of the deal and the level of information disseminated so as to avoid miscommunications.