February 1st, 2024 | Sterling

Recruitment Fraud in 2024: What’s in Store?

As we head into 2024, it’s a prime time to take stock of some of the compliance trends that those in recruitment and hiring need to be aware of. With the rise in sophisticated fraud and the growth of the gig economy, hiring teams must ensure they are equipped to navigate risks and tackle compliance matters in recruitment both now and in the future.

So, what key trends do staffing experts need to be aware of?

Tackling the growing sophistication of fraudulent activity

Perhaps the most predominant place to start is the sheer sophistication in technology that is making it much more difficult to spot issues such as identify fraud. Innovation in digital technology and Artificial Intelligence (AI) has made it easier for those involved in illicit behaviour to steal and use identities.

Fortunately, though, this sophistication has also been prevalent in screening and identity checks. Digital identity checks have evolved at an incredible pace in the last year and we expect this to continue throughout 2024.

Volume hiring and gig growth could expose greater risks

The gig economy has seen extensive growth that is predicted to continue for some time. The flexibility of this segment of the labour market presents significant opportunities for recruiters and employers alike. However, given the pace of change in this area, the high rates of worker onboarding and attrition, and the fact that individuals are often employed remotely, means there are associated risks that should be mitigated against.

Recruiters need to be able to verify that the person doing the work and the individual being paid are one and the same to help in the fight against modern slavery. Thousands of fraudulent applications are caught and prevented each month where individuals are falsifying identities of the individual carrying out the work — and that number is only going to grow.

Identifying ‘moonlighters’

While it may be more of an issue for in-house recruitment and talent management teams, it is important that everyone in the recruitment sector is aware of the rise of moonlighting. Remote working and the rise of the gig economy have created a level of flexible working that we wouldn’t have expected to happen at such speed a few years ago.

However, this again presents the potential for a new level of fraud. Being able to work away from the watchful eyes of peers allows some people to secretly work multiple jobs. We’ve seen growing instances of moonlighting in our vetting, particularly as global costs of living increase, stretching personal budgets.

Being able to work more than one job has its benefits, but when done in secret it is a risk for the end-hirer. Aside from potential issues around trust and productivity, moonlighting could also mean that company property such as laptops are being mis-used or data protection is being compromised.

Tackling fraud in 2024

Candidate fraud isn’t new, but how it happens will constantly evolve as individuals and groups look to circumnavigate processes. Screening and vetting will continue to adapt to this changing nature of worker behaviours, but for those in the staffing sector, it will become increasingly vital that they have a risk strategy in place that is not only flexible, but also tailored to the unique attributes of the sector and the workforces they service. That includes being able to identify risk factors beyond the usual suspects and clearly spot any red flags that suggest individuals may be inclined to be involved in activity such as moonlighting.

It will also become increasingly vital that firms utilise technology to combat the growing sophistication of fraud. However, while these are all more reactive drivers of change, it’s important to highlight that proactively looking at how screening and vetting can be strengthened and improved is also highly beneficial.

The tools that are now available to staffing teams can help reduce the administrative burden of many tasks while also eliminating the potential for human error. Embracing these in 2024 will become of increasing value to all.

This article was first posted at The Staffing Stream (https://www.thestaffingstream.com/2024/01/29/recruitment-fraud-in-2024-whats-in-store/).

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.