September 30th, 2016 | Sterling

The Rise Of The Contingent Workforce (And What That Means For You)

The contingent workforce is growing at a phenomenal rate, both in the UK and the US, and is showing no signs of slowing down.

According to the Association of Independent Professionals and the Self Employed (IPSE), there are now 1.91 million freelance workers in the UK, which is a 36% increase since 2008. Plus, research in 2015 by the Interim Management Association found that the use of interims has increased by 93% since 2006.

Figures released earlier this year by the Association of Professional Staffing Companies (APSCo) revealed that the number of vacancies for contract work was exceeding those for permanent roles, particularly in the finance/accounting and IT industries. Temporary nursing and medical care workers were also in greatest demand, according to research by the Recruitment & Employment Confederation.

Meanwhile, a recent PwC report forecasted huge growth in the freelance and contract market over the next few years, with 46% of the HR professionals surveyed predicting that at least a fifth of their workforce will be made up of contractors or temporary workers by 2020.

Contingent workers are non-permanent employees, such as contractors, freelancers, agency workers and consultants. The meteoric rise of this group of workers is down to a few factors, such as changing economic and market conditions, skills shortages and a shift in general working patterns.

Yet it’s also a bit of a win-win for both workers and employers. Freelancers and contractors often enjoy higher job satisfaction as they have the flexibility and choice as to when, where and how they work; while employers can flex their workforce to meet immediate needs or demands, and tap into a rich pool of talent, skills and experience, without the burden of keeping them on the payroll.

“Organisations are increasingly turning to professional contractors when bringing on board senior talent as a means of harnessing first-rate skills and experience without the associated permanent headcount costs,” remarked Ann Swain, chief executive of APSCo.

However, behind the advantages to hiring contingent workers lie a few challenges, namely the hiring and screening process. According to our Background Screening Trends 2016 report, just 53% of organisations screen their contingent workforce, compared to the 91% that perform checks on full-time, salaried employees.

The Risk Of Failing To Screen

Freelancers and contractors often have the same access to company resources, sensitive information and customers as their full-time counterparts, so gaps in the screening process could pose risks to employers. It may only take one person to damage an organisation’s reputation or put existing staff at risk, which is why it is important to ensure that that your extended workforce has the necessary checks performed on them.

Some of the risks involved in not screening contingent workers include employee fraud, theft, data security breaches or hiring migrant workers who have no legal right to work in the UK. Also, many fraudsters are aware of gaps in the screening process of contingent workers, and unfortunately some may go after temporary roles in an organisation, knowing there’s a good chance they won’t get caught. It’s therefore vital your screening policy covers the entire workforce.

Why Are Employers Failing To Screen?

One of the reasons why fewer employers screen contingent workers may be because they assume the recruitment agency has already performed checks. However, if that is the case, the background check may not be as thorough as the screening process you perform on full-time staff. It is therefore important to keep the lines of communication open with agencies, and ensure they understand your screening requirements when it comes to hiring the right worker. And remember, it is the employers’ duty to ensure everyone who works for them has been adequately screened – and that includes the extended workforce.

Another reason could be that employers feel they simply don’t have the time or money to carry out thorough background checks on workers who may only be with them in the short term. Yet the potential risks of making a bad hiring decision far outweigh the initial costs of screening, no matter who you are employing, so it’s worth taking the time to perform comprehensive checks.

With ever increasing numbers of contingent workers entering the labour market, it’s vital that effective, robust policies are in place to screen them. Employers must also make sure that HR teams and managers are aware of the risks of not following correct procedures.

If in doubt, consider using a third-party screening provider, for both peace of mind and to ensure your legal obligations are met. It’s also a good idea to carry out the exact same checks as you would for your full-time employees. By using the same screening provider and the same process for all workers, you can be sure that the hiring process is fair and equal for everyone, and that you thoroughly understand an individual’s background before recruiting them.

For more information on all of your employment background screening needs, please get in touch with us here. We’re here to help.

This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.