July 28th, 2020 | Jim Hickey, Managing Director, Sterling Backcheck

Outsourcing workers without insourcing risk

Background checks as essential for gig economy as they are for full-time employment

The nature of how we work is changing. Through the advent of new technologies, every day, more and more people are finding different ways to earn a living than ever before. Part-time work, extended contracts and service-oriented business models are taking shape and creating a situation where a fast-growing segment of the population is forming its own economy, popularly known as the gig economy. The gig economy is unlike the established full-time employment model. When employees are full-time, they earn a regular pay check and receive benefits that include retirement investments, holidays and paid-time off breaks.

Workers in the gig economy, however, are choosing a non-traditional career path, opting to be contracted out on a short-term employment basis or to provide a single-use service such as rideshares, hospitality shares, in-home care, dog walking, and labor, to name just a few. In fact, research suggests that in 2019 10% of  adults worked in this way within the UK.

Dealing with inherent risk

One of the biggest differences between full-time employment and the gig economy is that, by its very nature, the work that creates the gig economy requires that on-demand services be delivered in what is widely described as the vulnerable sector. With rideshares, for example, a driver picks a person up in their own vehicle to drive them to their desired destination. With in-home care, be it for senior citizens or young children, a career comes into a person’s home to care for their loved ones. Indeed, those who earn multiple sources of income are enjoying a great amount of work freedom but, at the same time, they have the potential to create a great amount of safety risk for the companies that employ them, as well as their customers.

To combat the creation of unsafe environments for customers, gig economy technologies are designed to offer digital rating systems through which users generate and share their personal approval or disapproval of services performed. Additionally, some gig applications offer GPS monitoring to track the whereabouts of contract workers. But there’s something missing: Not that many gig economy applications will tell you the employment or criminal history of the person who comes to a customer’s front door to deliver groceries or drive them around town. It would be highly disruptive to the safety of employees, customers and the company’s brand should an incident occur. So, the question is this: Is the owner of a gig economy business willing to risk the brand’s reputation and everything it has built? Perhaps more than most, the employee-customer relationships created by the gig economy prove why conducting background check for gig workers is so essential. Companies are placing much on the line in unmonitored settings, so a proper background check will go a long way to detect a criminal past that could signal future safety or character issues.

Going beyond the minimum

But it should be noted not all background checks are created equally. Some background screens offer the bare minimum of information or attempt to contact an employee reference. A search that is not robust can result in missing or outdated information. What is needed most is a background check that can help create safer environments, mitigate risk, and enable compliant practices. That means using providers that rely on the most advanced digital platforms, use a multi-step process to deliver reliable results, and uncover criminal records that can be missed by others. Also, access to primary information sources is paramount to obtaining the most current, up-to-date information. Just as important, deep market and industry expertise can help clients deftly navigate through the complex, ever evolving international regulatory landscape.

Jim Hickey is the managing director for Canada at Sterling Backcheck in Toronto.

Reprint: Created with permission from the Canadian HR Reporter from the December 1. 2019 © Key Media

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