Databases

Many clients want to know the databases we use in our process. Employment information is primarily available from two types of databases, Credit Bureaus and Electronic Verification Companies and only to companies that have a “permissible purpose” under the Fair Credit Reporting Act.  We use a number of Credit Bureaus and a large array of Electronic Verification Companies to provide us information. This provides us with employment information from the very largest to the very smallest employers.

Let’s look at data from the Bureau of Labor Statistics-National Business Employment Dynamics Data by Firm Size Class. Tables 1 and 2, break down the distribution of firms and private sector employment by number of employees.

Table 1
Distribution of Private Sector Firms Size Class:2012/Q1
Number of Employees Number Percent Cum Percent
1 to 4 2,692,000 55.50% 55.50%
5 to 9 956,000 19.70% 75.20%
10 to 19 583,000 12.00% 87.20%
20 to 49 378,000 7.80% 95.00%
50 to 99 126,000 2.60% 97.60%
100 to 249 74,000 1.50% 99.10%
250 to 499 22,000 0.50% 99.60%
500 to 999 11,000 0.20% 99.80%
1000 plus 10,000 0.20% 100.00%
4,852,000 100.00%

As the above table shows, most US employers are very small. 87.2 percent of all private sector employers employ fewer than 19 employees. Only 10,000 companies employ 1000 or more employees.

The distribution of Private Sector Employment is also heavily weighted towards small employers.

Table 2 shows that almost half of all private sector employees work for firms with fewer than 249 employees. And only 39% of all employees work for large companies with 1000 or more employees.

Table 2
Distribution of Private Sector Employment by Firm Size Class
Number of Employees Number Percent Cum Percent
1 to 4 5,508,000 5.10% 5.10%
5 to 9 6,287,000 5.80% 10.90%
10 to 19 7,850,000 7.30% 18.20%
20 to 49 11,392,000 10.60% 28.70%
50 to 99 8,638,000 8.00% 36.70%
100 to 249 11,204,000 10.40% 47.10%
250 to 499 7,739,000 7.20% 54.30%
500 to 999 7,591,000 7.00% 61.30%
1000 plus 41,769,000 38.70% 100.00%
2012/Q1 107,978,000 100.00%

This data addresses a common mistake many collection organizations make in their employment skip tracing process. Many collection organizations believe that by using  one source of employment information that they have a good source of current employment information.  Employmentskiptracing.com’s system taps into multiple databases that cover from very large to small employers.  That means we cover more employers and deliver higher hit rates and therefore higher collections for our clients.