May 15th, 2018 | Sterling

Why a Robust Background Check Programme Should Include Non-Permanent Workers

The UK workforce is evolving. In a report, The Office of National Statistics spotlighted the labour force for the first three months of 2017. The report found that there were 23 Million full-time workers, 8.5 Million part-time workers and 5 Million people working in the gig economy. The temporary or contractor worker sector (or the gig economy) is growing at a rapid rate and will influence the economy and political system in the UK for many decades to come. Today’s contingent workforce includes highly skilled specialists and consultants that can be found in nearly every industry. Large corporations are continually hiring more flexible, contingent workers to fill their staff. The contingent workforce is growing at a phenomenal rate in the UK and is showing no signs of slowing down.

In the recent webinar, “Background Checks for Non-Permanent vs. Permanent Employees,” Sterling’s Steven Smith and Lucy Evans took a look at the evolving workforce in the UK and discussed an important best-practice gap as this workforce continues to change shape. Sterling’s research shows that 40% of employers are not conducting background checks on independent contractors and freelancers. The webinar shared what risks may exist by not thoroughly checking non-permanent workers and the key considerations for background screening non-permanent vs. permanent workers.

2018 Background Screening Trends Report

In April, we released our Background Checks 2018: UK Trends & Best Practices Report, which surveyed over 300 UK-based employers in 33 industries about their use of background checks to gain key insights into emerging trends, technology and more. We wanted to better understand the screening landscape, why folks were screening (or what the reservations were if they weren’t!), the types of checks they were carrying out, what their challenges were and how they anticipate things changing in the future, see gaps for improvement to help prepare their business for the future and make sure their screening programme continues to be robust.

The survey found that nearly 80% of businesses do conduct some sort of background screening on their employees. There are many types of the workforce that could be screened including permanent, vendors, contract workers, temporary workers and those that are working in the gig economy. We asked our survey respondents which of the following types of the workforce does their organisation perform background checks?

  • 89% screen full-time employees
  • 83% screen part-time employees
  • 60% screen contingent workers
  • 31% screen volunteers or other unpaid workers

While it is encouraging that 60% of organisations screen contingent workers, compared to 53% in our last survey in 2016, there are still 40% that don’t currently screen this section of their workforce, revealing there is a gap between the number of businesses that hire contingent workers and the number that screen them. As more contingent workers enter the labour market, it’s advisable for employers to have documented policies in place to screen them, too. Choosing to not screen contractors, temporary staff or volunteers can pose a significant risk for employers, such as employee fraud and theft or hiring migrant workers who have no legal right to work in the UK.

Hiring Process Discrepancies

Uncovering discrepancies during the hiring process can cause concern for employers, but it does highlight the importance of screening to ensure the person you hire for the job has the right experience and qualifications and provides you with accurate candidate information. If you do find a discrepancy, always give the candidate the opportunity to explain, as they may have made a genuine mistake, then review the situation again before making a final decision. Our webinar attendees stated that the most common discrepancy that they found when hiring a new worker was unexplained gaps in employment or education history with education discrepancy in dates or falsification coming in second.

Why Do Organisations Conduct Background Checks?

The number one reason our survey respondents gave for screening candidates was improving or meeting regulatory compliance. This is to be expected as highly regulated sectors, such as financial services, legal services and security, have specific screening requirements, while there are other hiring processes, such as Right to Work checks, which are obligatory for all employers.

Risks of Not Conducting Background Checks for Permanent and Non-Permanent Workers

There are four possible risks that are associated with no performing background checks on permanent and non-permanent workers. The first is the cost to the business, including replacing staff and potential fraud. The second is damage to the company’s reputation. The third is there could be issues with workplace safety. Lastly, by not performing background screening, an organisation could be in non-compliance with hiring or privacy regulations. An example of what could happen if the non-permanent employee was not properly screened was recently reported by CNBC. In the US, a temporary worker at a financial institution was arrested for stealing his co-worker’s identity to apply for credit cards.

When screening both permanent and non-permanent workers, it is critical to evaluate potential consequences of not screening. Employers must remember to consider performing relevant background checks for the role they are hiring for, whether they are permanent or not. By doing so, companies can maintain transparency with their candidates and employees as well as set expectations in a consistent manner. Having a policy in place will ensure a company can respond to any privacy complaints and help avoid inadvertent discrimination.

It is crucial to follow key best practice steps to roll out a robust and compliant screening programme for your complete workforce, whether they are permanent or non-permanent workers. Find out more insight into our Trends survey and best practices for background screening by downloading the On Demand version of the webinar today.

Please Note: Sterling is not a law firm, and does not dispense legal advice. The information provided herein is general business information, is not based on any particular facts or situations, and is not to be relied upon as legal advice, even if you are currently a client of Sterling. You are encouraged to seek advice from your own legal counsel concerning matters covered in this presentation.

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.