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3rd Degree Screening Inc achieves PBSA Accreditation and HRO Today’s Bakers Dozen List for Top Pre-Employment Screening Agency in 2021

Jimmy Waters


3rd Degree Screening


Jimmy Waters

Office: 712-256-5701 Cell: 402-740-7730

Interview conducted by:

Lynn Fosse, Senior Editor, CEOCFO Magazine

Published – January 31, 2022

CEOCFO: Mr. Waters, the tagline on the 3rd Degree Screening site is “Background Checks Done Right does “doing a background check right” mean?

Mr. Waters: First and foremost, in our industry, compliance is a huge deal. Therefore, one of our main focuses, with the tagline “Background Checks Done Right,” is to offer our clients compliant background checks. Then, to take that a step further, to us internally, it also means providing accurate, thorough, and timely background checks for our clients, but most of all, it also comes with a sense of customer service. We believe in the background check industry, doing things the right way also includes treating our customers the right way as well.

CEOCFO: What is the state of background checks today? Given the state of the economy, people working from home or many still not working because of COVID, are background checks more or less important?

Mr. Waters: We have definitely seen an uptick in the amount of background checks, not only for us, but in our industry. I believe it is something that is not going away. People want to know who they are hiring, and whether or not they will be a fit for their company culture, they want to put them in the best position possible to be successful with their company.

We believe that part of that is conducting a good background check to know who you are hiring and the type of person you are hiring. It can be detrimental to a company to hire someone that does not fit into their company culture, especially if it is something that you could have found out before hiring and going through all the onboarding and training, until you realize you could have found out beforehand.  

CEOCFO: What are some of the things you look for in a background check? How many layers are there, or does it depend on a company or position? What do you understand about getting up to date accurate information that less experienced companies have not quite figured out yet?  

Mr. Waters: When people call in and say they want a background check, we first ask them, “what information are you looking for?” There are all sorts of levels of different types of background checks out there. There is everything from criminal checks, and that is everything from nationwide data bases to county criminal records, all the way to federal criminal records.

I believe that many people get confused that there is just one big data base that contains all of the information, when that is not the case. I can rob a bank in my county here where I live and if I went to that county courthouse, I wouldn’t be able to find that record, because it is a federal crime, which can only be found in the federal court system. Obviously, knowing where to find the records at is very important. However, when you are looking at a background check too, it is not just criminal information.

Nowadays it is reference checks, it is previous employment checks. It has even gone to where we are now screening applicant’s social media accounts. It can be more than just a criminal check.  

CEOCFO: Do you have any liability for the information you provide? Is a social media check ok or frowned upon?

Mr. Waters: We have to abide by the Fair Credit Reporting Act, the FCRA, and all of our reports that we provide are FCRA compliant, so that tends to mitigate our liability on those sorts of things. I do know that social media is kind of a hot topic in our industry right now, about “should we be looking at it, should we not.” The thing is, your HR managers are already doing it. What we try to bring to the table is a more consistent manner of doing that, consistent in what we are always looking at, and consistent in the parameters of that type of search. Therefore, we do everything possible to mitigate any type of liability by providing the most accurate and most up to date information on the candidates.  

CEOCFO: Do you typically work with companies on an ongoing basis? What is the business model?

Mr. Waters: We are a B2B company, and we work with clients on a continual basis. We sign up clients to a service agreement. We tend not to lock our clients into a set amount of year contracts, just because we are trying to earn that business every day, every month. However, in the last 5 years, with the clients we have signed up, we have a 98% retention rate. The companies that have left us have been mainly due to acquisitions or going out of business, which I think is a sentiment that we are doing things the right way and treating our clients right.  

CEOCFO: What might a client ask you to look at that is a little harder to discern? For example, political views or activism. Does that come up much? Can you, should you, do you look at those things?

Mr. Waters: As far as the social media aspect and those type of things, we realize that things on a computer can be taken out of context of maybe the way that someone was trying to speak on something. At the end of the day, I think that if you are seeing things that are being posted that are not going to fit into your company culture, or if you are worried about how others might view your company if this employee is posting these types of things, at least it is a conversation starter that you can have with that applicant, about appropriate uses of the social media, how you want them to represent your company and brand online moving forward.

I think a lot of it is not dealbreakers, it is more, “Okay, we need to have this conversation about how we would like to see these types of things handled, moving forward,” with the clients. However, at the same time too, when you are talking about criminal records, it is important for the employers to look at the offense, look at the circumstances of the offence, how old was the applicant at the time of the offense, have then been clean for X number of years since that offense. You need to take all of those things into consideration when looking at their background check.  

CEOCFO: Do you provide a summary report? Do you provide all of the various things you look at, just “here it is?” Are there different types of reports you might provide for different clients?

Mr. Waters: Yes. Our reports pretty much provide everything that we have searched into one single report. You can obviously look at everything individually; like a checklist. We are doing a social security verification, we are doing a county criminal check, we are doing a federal criminal check, we just go down the line on the report and see the results and the searches completed. As I said, we are able to customize those reports to fit our clients’ needs. Sometimes, it is not always one size fits all in this industry.  

CEOCFO: What do you need to know about the person you are checking?

Mr. Waters: We typically take their personal identifiers, name, social, date of birth, if you are doing any type of motor vehicle check we need to have their driver’s license number. All of the applicants typically provide all of that information when they are filling out their disclosures and authorization forms that the employer provides, letting them know they are going to be running background check on them. However, the applicant has to give consent to the employer.  

CEOCFO: What about citizenship, green cards, undocumented people - the various categories an applicant might or might not fit into these days?

Mr. Waters: We have seen an uptick in how many of our clients are now utilizing E-Verify. Obviously, for any federal, or if you are doing any work for or with the government, you have to have your employers E-Verify, to know that they are authorized to work in the United States. We are also seeing many just private companies start utilizing that service. We have a nice online system that connects with the government portal. Obviously, you can go and do E-Verify yourself for free, it is a free government service. We just try to streamline that process as far as being able to connect to all that in one spot.

CEOCFO: Do you find that most of your clients pay attention to the information you provide, or are some of them just doing it because they have to and really do not consider it all that important?

Mr. Waters: That is a good question. I think at some level they all consider all of the information that we are providing them, and they base many of their decisions off of that information. However, I can definitely see where it might be a formality to some people, because, just due to the nature of the job. Maybe that job requirement really does not matter what the persons record is. It is just more of a sense of they just need to know if they do have anything on their background, that way, if there is a situation, they can make sure to put that person in a successful position.

CEOCFO: Are there particular industries of focus for 3rd Degree Screening?

Mr. Waters: Yes. Our primary industries that we work with are school districts, K-12. We work with various staffing agencies. We have a lot of industrial staffing clients. We have manufacturing clients, and oil & gas seem to be our primary industries that we have a lot of clients in. However, we are able to provide the background checks in all sectors of business.

CEOCFO: Is there a particular reason certain industries are in your wheelhouse or more opportunistic? How do you reach out to prospective clients?

Mr. Waters: For us, we have been growing a lot our first 10 years now. We did not do a lot of marketing or push a lot of marketing. We grew a lot by referrals and word of mouth from our current clients, which has been great, because we have been able to create something pretty big here, just based on providing great services to our clients.

Something I think is a testament to us is we will have a client, we will develop a relationship with that HR decision maker, and we will have that relationship for a couple of years. Then when they move to another job, they will typically be calling us within that first month, to get from their new business to switch over their new company to us, because they know what type of service, they are going to get with us. That is another sentiment that I believe that we are doing things the right way.

CEOCFO: What led you into this area?

Mr. Waters: Actually, my mother started the company. She was a wholesaler in the industry to many of the bigger players in our industry, like a LexisNexis, some of the biggest players in our industry. I had helped her out with that wholesale side a little bit, and then when I graduated college, I just really did not know quite what I wanted to do, I was still helping her out, and then we decided, “Why don’t we open up our own business to business background check company.” Therefore, we did that in 2012 and we really have not looked back.   

CEOCFO: Would you tell us about recognition in the HRO Today Bakers Dozen?

Mr. Waters: We are super excited about it! That has always been a list that we have wanted to be a part of. It is considered the most prestigious list to be on in our industry and every year it came out we had just never been on it. Then this last year, we were fortunate enough to have enough clients recommend us to be on that list. We are probably one of the smaller companies on that list right now. However, I believe being recognized is a catalyst for us growing in the future.

CEOCFO: Other than word of mouth, how do people choose a background checking company?

Mr. Waters: I think that many people who are very educated and versed in the background check space, they would look at PBSA accredited background check companies, first and foremost, of which we are one of them. However, I think it all comes down to the relationship they might build with a person and trust during that sell cycle.

We get a lot of companies that will reach out to us and their biggest pain point with other companies is customer service. They want to be able to talk to the same person about their account. They want to feel like they are their number one client, and that is what we try to do here, and that is what we try to show people.

CEOCFO: What is next for 3rd Degree Screening?

Mr. Waters: We are excited for 2022. We are actually doing hiring ourselves, here. I think that by 2023 we will probably double in staff. We are going to continue providing our clients with the best customer service possible, all while providing them thorough, accurate and timely background checks using the best technology.

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“We believe in the background check industry, doing things the right way also includes treating our customers the right way as well.”
Jimmy Waters