Staffing Industry Spotlight: Mike Wiley, CEO of Chane Solutions

Mickey Pelletier Thanks for taking the time to sit down with me and do this interview, Mike. I want to start with a basic getting to know you question. So, who are you and what do you do?

Mike Wiley  I’m Mike Wiley, I'm the CEO of Chane Solutions. Chane is an accredited background screening business supporting clients across the US and 210 countries outside the US.

Mickey We'll get into Chane Solutions in a little bit, but maybe you can give me more information here about the background check and screening industry. There's plenty of background check companies that exist out there. Why did you start another background check company?

Mike Well, that goes back to my staffing days. I've spent close to 30 years in staffing and operating staffing businesses. In staffing operations, you've got a lot of compliance requirements and screening is a large part of this. Background screening, occupational health, drug testing all have deep compliance concerns as part of this service line. Through our staffing business, we tried many screening groups; many of the biggest players, smallest players, even some boutique screening companies, and we just became wildly frustrated through that process. Slow turnaround times and responsiveness were a reoccurring issue. Eventually being a typical entrepreneur, we just looked at each other and said let's take a shot at this and start our own screening business.

And we really built the screening platform on the back of our staffing company and learned an awful lot. We did this way early on back in like 06, 07, 08 timeframe before taking it to market.

Mickey Yeah, it's interesting. You found out along the way that maybe you can just do things a little bit differently than other screening and background check providers that you had worked with in the past. Tell me a little bit more about Chane Solutions and how you're changing that screening process, and things are done that make you more unique as a provider compared to what you had seen elsewhere in the market?

Mike Sure, back then, and even through today, there's always turnaround. Everyone needs an effective turnaround and cycle times of your reports. But, but more importantly, especially for say, the whole contingent labor space, not just staffing, it's the responsiveness, it's the clarity around the rules of engagement within screening: what you can do, what you can't do, what you need, what the pitfalls are.

What we found was that there was little-to-no responsiveness. When we had a question or we needed something and we were getting pressure from applicants, or we're getting pressure from clients, we don't have the luxury of waiting days and weeks for a response. So that was a major problem that needed to be solved, which is how built Chane - to have this hyper focus on responsiveness.

In addition to that, we also needed a partner in a screening company that could help us understand the rules, since we're not the experts as staffing providers in screening. We didn’t fully know the nuance; we don't know the guardrails all time and needed guidance – not legal advice but guidance. What we are allowed to do, what we're not allowed to do, and what the expectations are.

There are municipalities that have these funky rules and guidelines. There are occupational health pieces that have varying protocols, cut off levels, and as a staffing person, you just don't know what questions to ask your end client or dive deeper into products. For example, “Hey, we can provide this product versus that one and it has these benefits or that product is much faster and comes with these other benefits.” Collaborating on how to deliver services in the best way possible is what we were looking for in the market and have seen that this is still desperately needed today.

Especially in staffing, we could help them shape and create programs that were more efficient and faster and compliant.

Mickey The world of background checks and screening compliance, you think it's fairly straightforward. But, in your experience, does it change? Does it shift over time? Does it evolve or is it pretty straightforward on and forever? I'm just curious about does that space change much?

Mike Yeah, it's crazy. It's this micro-lane that is required in hiring across the board for most companies. You have you have municipalities across the United States, that have a set of rules that could be completely different to another municipality next door or across the country and a one-size-fits-all just doesn't apply.

In addition to that, you have the regulations that change, so you need to stay on top of what is ever-changing all the time. You need to make sure that the documentation you're using is being reevaluated on a regular basis. Because to your point, yes, it's constantly in flux. It's constantly changing. And some of the changes and little tweaks could occur in the background through legislation and if your documentation doesn't change along with it, and is stuck in a past iteration, that puts you in a vulnerable spot and opens up fairly significant risk really quickly.

From a compliance perspective, yes, you certainly need a screening provider that's paying close attention to all of this.

Mickey Oh wow, it sounds like these things can change fairly quickly.

Mike They're ever changing and yes, they change quickly. They change all the time, and it could be something within a state regulation, tweaks, or changes, and then suddenly downstream from that you have a local municipality within that state that tweaks it even further. So yes, it's constantly moving.

Mickey That’s fascinating, and challenging. It’s easy to think that background checks and screening compliance are just part of the onboarding process. It just goes on in the background and unless you're doing it yourself, you may not know all those intricacies and the changes. I knew of the nuances of municipalities and that there's specific requirements by States. But I was not aware of the changing dynamics and requirements, so I appreciate your insight there. You started to touch on this earlier, but I wanted to shift gears a little bit to the type of clients that you're working with now. Are you mainly working with staffing suppliers? Are you working more with enterprise clients that are bringing on full-time employees? Who are you working with? Is there any difference in how you engage with each one of those sorts of clients?

Mike We certainly have a lot of staffing providers and folks within that contingent labor space. Your EOR, your MSPs, even VMS players, but outside of that we also work with your traditional enterprise commercial businesses, like say a bank or financial services or pharmaceutical company. In my opinion, if you can solve and stand-up solid support and service delivery and provide all of this service lines needed for staffing, you can support just about any enterprise or sophisticated customer that comes your way because they touch so many different end clients.

Staffing tends to be the neediest in terms of responsiveness and their mix of end customers is incredibly diverse. We've done a lot in the staffing space, and we've opened that up. We've worked with financial institutions, health care, education, energy and manufacturing and a lot more. I think a byproduct of our experience in staffing has made supporting these types of companies pretty easy to support.

Mickey Staying on the topic of screening and credentialing, are there any misconceptions that people have about the screening and credentialing space? Because I certainly have my own, and in having you talk this through has been enlightening to me. I'm curious if there's ones that you run into pretty often as you're working with various clients, their own misunderstanding and misconceptions of either the process or just the industry itself.

Mike It seems like credentialing and screening should be much simpler, much more direct, and instantaneous, and it's just not. It's just not the reality. There are different layers to this and as you peel each layer back, each layer has its own complications and nuances.

Whenever we engage with customers, I want to educate. I've learned so much, just coming from a hiring position to an executive in a screening business. I want to educate others in this space and help them understand the potential pitfalls, risks, and bottlenecks that occur in the type of screening because every screening event has its own potential risk & constraint in the process. We want to make sure that the client understands what those risks & constraints are and then if there are elements that we can impact to remove those, or at least reduce these wherever possible, we want to present that to them and let them make an educated decision on their program and their business.

But to your point, yes, it's riddled with layers and layers of different things that impact – could be speed, could be just the experience how the applicant moves through the journey of screening, even though this is just a tiny little sliver of the hiring event, it's critical that we get this right for applicants clients, and our internal users as well.

Mickey What are the various screening, compliance, and credentialing checks that you do for companies, are there any that you don't do?

Mike I'll paint it in a broad brush like this, we do all of the criminal screening and that's county, federal, state, national, sex offenders, and those kinds of things. That's one big bucket. Your next bucket is your verifications. Verifications of education, verifications of employment, professional licenses. Your third bucket is occupational health, which also includes drug testing. Those are areas that we perform regularly – tens of thousands per month. We know it inside and out and we deliver them every single day.

But over time you will start to see things occur in the landscape where you have to revisit some of the subcomponents that you sell or deliver to customers. Service lines like credit reports, I would say most of my competitors are still delivering credit reports, but interestingly enough, we're starting to get guidance on sunsetting that and we've already begun to sunset that service line. It's simply based on feedback from some of the best employment attorneys out there saying a credit report technically is evaluating someone's credit worthiness, not their employability.

So, what's occurred, through plaintiff attorneys for example, is if your credit score is five hundred. You're denied a position. A plaintiff attorney takes that, files a lawsuit and then looks to roll up additional employees that have been impacted by that same employer, turning it into a class action fairly quickly, if it's a large employer it gets out of hand very quickly. So the guidance at this point is to move away from that service line altogether not ignore this shift in the market in order to retain revenue at the potential detriment of end clients.

There are other types of components and reports that we can provide, civil searches as an example, as opposed to credit reports. These can give you a little bit more accurate information on employability. You can check leans. You can check if someone's been litigious versus a credit score, and that's the guidance that we've gotten. To your point, we have pieces and elements that we evaluate on a regular basis with outside counsel. And as they come up, this is one of the more recent ones that we've said, OK, we're going to sunset credit reports at this point because the climate is starting to move in the direction of becoming too litigious and we don't want to pull our clients into a hairy situation.

Mickey Yeah, I would think creditworthiness, shouldn't really impact employability, particularly if you’re not dealing with other people's finances. If I was dealing with some people's finances and handling a company’s finance, maybe there's some relevance to that, but even then, I struggle to see the relation between the two and that preventing people's employment.

It's great that you're advising clients on that and being able to factor it in as just part of the overall screening process and what companies should be doing to not only maintain compliance but ensure that they're doing right by the workers and they're not inhibiting their access to talent due to overzealous screening requirements.

Mike We all either have gone through or know someone that's gone through an event in their life. It could be a divorce. It could be a medical issue that's caused significant bills that they can't manage. Those events shouldn't preclude them from being able to gain employment, so I'm also looking at it from the employee’s perspective too.

Especially we saw that years ago a lot in the retail environment, people have access to cash and credit cards and the thought process was, “well, their credit score is not great. That may make them more vulnerable to being dishonest or stealing.” But the whole purpose of doing a background check is we're evaluating if there's been a previous incident.

Mickey Yeah, it's a tough spot. Companies want to protect themselves, but they also don't want to prevent good talent by having crazy requirements. That's fascinating; all this stuff on something so simple as a background check and screening, credit reporting and how that all ties in together just for people that just want a job. Even if it's just people running cash registers, right?

Mike Yep.

Mickey I appreciate you sharing all that. We’ll shift gears again; I want to talk a little bit more about you and your past. Tell me more about your background starting prior to Chane Solution.

Mike So my journey started out of college with a large international staffing firm. I had a had a nice run with them and stayed with them close to a decade, primarily on business development, running offices, and later running regions. I then got to the point where, like a lot of folks do and staffing, they go, “I think I can do this on my own.”

I launched a staffing business called McGrath Systems in 2005 That was literally out of my parents’ basement and pushed that business up a hill for the next 15 years until we exited in 2020. It was an amazing journey. I learned a ton. We ended up having offices from the East Coast to West Coast and primarily focused initially on the light industrial space. But as those businesses tend to evolve, you have customers asking you to support them in technology and accounting and finance. So, the initial path was light industrial and high-volume staffing and then that moved into some more specific lanes in your professional space and your tech space.

Mickey So you're doing temp to hire type labor. You're sourcing directly for clients. Why did you leave all that behind and solely focus on the screening and credentialing? You talked a little bit about that earlier, and you saw the opportunity, but why leave all that behind of what you built to start up something new in this space?

Mike Well, I would say it like this and anyone in the contingent labor space would kind of identify pretty well: after 30 years, it does feel like Groundhog Day a little bit in staffing. I wanted to be challenged more and I wanted to learn. I've been doing staffing and even though every single day there's a new scenario that you say to yourself, “I can't believe that just happened or that's a new one.” I wasn't being challenged.

The opportunity in screening that opened up for me was pushing me into technology which was a real challenge and opportunity for me - how to make these systems work and flow efficiently. Even though we've worked with many, there's probably only about three to five major platform forms in screening. We've worked with all of them, but building the internal tech workflows for this was interesting and fun for me because it's a completely different learning curve. It provided challenges and detail of the nuance of compliance I found to be compelling and interesting having lived so close to it as a staffing person.

When we made the decision to step into screening, there was a 100,000 a-ha! moments. I didn't realize that I didn't know it had so many intense layers of complexity. I didn't know it was so nuanced, and that's across every single subcomponent that we provide. We probably provide 1000 – 2000 subcomponents to clients, so each one has its own learning curve. Some are quite simple while others are complex. The complexity is typically around the compliance piece. The complexity is around how to deliver it efficiently. How to do it through technology and how to set it up intentionally and operationalize it? Ultimately it came down to the fact that I wanted to be challenged again and that's what I was looking for.

Mickey Totally makes sense. Now I want to possibly compare apples to oranges in a sense, would you say between staffing and screening compliance, is one more complex than the other, or is that even a fair question to ask? I'm curious though, because they're somewhat relative, but they're two different things. I'm just wondering if going from one to the other it was, “Hey, this is way more challenging and staffing was actually fairly easier.”

Mike I think it's just a different challenge. As you know, staffing has its own complexity, especially when you have large dynamic programs and you're trying to manage. There's a whole host of complexity that comes along with managing high volume staffing, workers comp and margins. So, I wouldn't say one is more challenging than the other.

In the screening world, you're delivering reports, and these need to be accurate, compliant, and delivered very fast. Early on, I brought in some industry veterans that helped put the guardrails around the business to help keep us hyper-compliant, staying within safe lanes. We went through an accreditation process with the PBSA to make sure we're operating in strict compliance and within best practices. But generally, Mickey, yeah, I can't say that one is more complex than the other. They just have different types of complexity specific to their own lane.

Mickey When people go from one related industry job to another, where there's some differences, I was curious about that. But obviously the jobs are similar in the sense that they're helping getting people to work and they’re at different points of the process.

How did your experience and your time in the recruiting and staffing world help you shape Chane Solutions? As you came up with the process for Chane, did it give you a different view and vision of maybe how you wanted to operate and change the game as you moved into the screening and compliance and background space?

Mike Through that staffing lens, the whole reason to build a screening business was that we needed a supplier that could accommodate speed, compliance, hyper-responsiveness and a simple tech workflow. And even though this is a little micro-sliver event in the hiring process, it needed to be 100% compliant but also needed to happen super rapidly. If it was getting bottlenecked, we needed to understand the reason behind why it was bottlenecked and how we can resolve this so that the next one doesn't get tripped up.

That was the lens that we built the business from and just continued to focus on being hyper responsive. That seems to be a gap that's still sits out there in the industry today. We have calls every single day that are like, “this county is slow, this county is causing a problem.”

A lot of times when you have background checks that you're pushing through, you will have a county that's stalled, or something is happening because it's with a court runner. You'll hear those talk tracks. There are paths in many ways, and often times that you can follow by just taking it to a different vendor. A different vendor may be able to expedite that and not have it get stuck with the courts. Simply collaborating with a screening provider that’s willing and interested in listening can resolve these constraints and improve your program dramatically.

Mickey That sort of ties into the question I wanted to ask to wrap up the interview. Is there anything that staffing firms, EORs, enterprise clients, or anybody that needs to use background and screening services can do that can expedite the process or make it easier?

Mike Understand it. Understand it to the best extent that they can. Understand what the potential bottlenecks and constraints are. Collaborate with their screening provider on if there are other avenues to deliver the same results in a unique way. What I will say is that your larger providers out there really aren't positioned in the market to course correct or give that level of hand holding to customers. But a lot of your mid-size players like Chane will collaborate on a regular basis and if it's a monthly call you need, we'll do a monthly call and evaluate the overall performance of the program, the speed of the program, the cost of the program, ways that we can strategically impact it. I genuinely look at these, Mickey, through a lens of, “how would I do it if I were sitting in their shoes?”

I was a hiring manager forever, so I understand the pain that they're experiencing. We're looking at it through their lens - is it a budgetary pain point? Is it efficiency? Is it speed? How do we impact this to get the greatest result and the most consistent results and stay within the compliance lanes at all times and deliver a great service for the customer?

I think that can be done through ongoing collaboration and reevaluation. You can't just set up your program and then look at it in a year or two years or three years. There's a lot of ways to move, tweak, and improve along the way, and that's where we drive real value to customers.

Mickey I think that's really helpful and for hopefully for everybody reading here, these are some important things to consider regarding the complexities of it all and what they can do to possibly make it a little bit simpler. I want to wrap it up with that and thank you for taking the time to speak with us. It's certainly something that was interesting to me and I appreciate you sharing all your insights!

Mike Of course. Thank you for the opportunity. I appreciate it.