The Need for Background Verification In a Gig Economy [2021 Updated]

The future workers will work for different organizations and have multiple jobs. The gig economy and the problems it will bring.

Background Verification In Gig Economy

Ever since journalist Tina Brown coined the term ‘gig economy’ in 2009, referring to the then state of the job market, the world has somehow gotten obsessed with it. People can’t stop talking about it.

Whether you’re hiring for gig economy jobs or you’re a traditional business that tends to work multiple gigs, you need an approach to background checks that work in both cases.

The gig economy in numbers!

So first, here are some astonishing numbers that can set the stage for the current state.

– In 2018, around a Billion hours per week of freelancing, a Billion with a ‘B,’ was clocked by US freelancers alone. That too on a single platform, Upwork. The same findings say that these freelancers were 19 points more politically active than an average non-freelancer. How this could help is beyond me, but here it is.

– Let’s try another one. More than $1.4 Trillion was the collective annual earnings of gig workers in America. The study also pointed out that as much as 55% of gig workers also have a full-time job, which makes up roughly 60% of their income. Hmm!

– And, if the gig economy keeps growing at a rate of three times faster than the overall US workforce growth, almost 50% of the Americans will be involved in the gig economy by 2027.

UK’s gig economy doubled in size between 2016 and 2019 to now 4.7 Million workers. Yeah, not that great of a number, but a number nonetheless.

The genius, I think, is in the word ‘gig economy’ itself than just the numbers. All credit to Tina, because a recent article in The New York Times begs to differ. It pointed out that a new California Bill makes App-Based companies treat workers as employees.

This means some of the biggest employers of gig workers like Lyft and Uber will now have to provide social security and medicare, making Uber drivers not so much of a gig worker anymore in California. Essentially the gig workers would be employees.

This is The New York Times argument for an economy steering away from the gig economy. I somehow expected more from them. But, a point to keep in mind.

“It will have major reverberations around the country,” – David Weil

Most other states will follow suit is what is expected.

“Today, the so-called gig companies present themselves as the innovative future of tomorrow, a future where companies don’t pay Social Security or Medicare. Let’s be clear: there is nothing innovative about underpaying someone for their labor.” – Maria Elena Durazo

This is something which could very well be the case all over the world. Or not!

The conditions of people working in the gig economy certainly need to improve, and this bill will bring changes to the working conditions of people. But, and it’s a big but, the gig economy is here to stay. 

The inevitability of the gig economy

The gig economy is an inevitability contrary to what The New York Times would have us believe. The numbers are a testament to it. And ultimately, the numbers don’t lie.

What would our future look like when more people work as gig workers and less work as full-time or part-time workers?

A good question, this, has most economists, behavioral scientists, and corporations scratching their heads for an answer.

There are different scenarios portrayed, and out of which, the one I like the most is the one that looks at the future as a pool of human effort that could be tapped into as and when required.

More like cloud computing as a service out there. People would be available in the open market with skill sets and experiences and with different compensations hired at a moment’s notice.

Well, a moment’s notice could be a utopia, but something close enough. Where we could ask a data scientist to come in and work on the big data, build models, and derive useful insights from it. And once the job is done, we’d pay the engineer, and she’d be off to another project for some other firm.

And by the way, this could happen remotely or at your office. Which pretty much opens the whole world to employ someone from. Similarly, it opens up the world as a whole for the gig worker to find a gig from.

So, back to the utopia model, I guess there would be enormous challenges the world of employment, in general, will face.

Challenge one

It would be a massive headache to keep a project completely staffed with people coming in and moving out more frequently than it happens right now. 

There would be a similar problem for the gig workers in finding jobs and making sure they have another company to work for once a gig is finished. Of course, there are different forms of gigs out there, but you get the problem.

Challenge two

The authenticity of workers and employers will remain a huge problem, as is now. In an employment marketplace, the only way to find out if you want to work for a company or not is derived from a minimal set of credentials available online. These credentials could be designed and influenced, and targeted to attract talent. And, sometimes it is not the true depiction of a company or an organization.

Similarly, if a company has to hire anyone on a contract or for a gig, the available information is not always the entire picture. There are so many facets to a potential candidate above and beyond the resume or the online profile.

The requirement of verified credentials (both for the company and for the gig worker)

Verified credentials or profiles of potential gig workers and companies will become an essential requirement. There would be better measures and systems which would help people understand and make a decision.

It will talk way more than just the education or the experience or the project one has worked on. And it will speak way more than what the company produces, or how many people it employs, or how much the company pays.

What exactly would evolve to become a potential perfect profile? We don’t know, and maybe we would never be able to. But, one thing which has pushed the current market to build is an authenticity to any limited credentials available online.

We at Springworks built one such profile building platform, SpringRole. It has the profiles written to the blockchain and has valid references and credential checks available against an incentive to make for as authentic a profile as possible.

Also, we have a background checks wing called SpringVerify, which confirms, with certainty, the available necessary credentials of employees and workers.

Combining the two has worked wonders for the hiring teams of our clients. And we feel that these services combined will help build a platform that will contribute towards the vision we are talking about.

Yes, it is not perfect, and maybe it will never be. But it is by far the best way to help build a platform where one could have genuine profiles of people.

The requirement of a super-employment solution (Again, both for the company and the gig worker)

HR would be the people who would be most affected by the rapidly changing trend in the employment sector. The requirement of skilled people for projects would change dramatically, and the hiring team would require to keep up with the pace.

This would give rise to hiring platforms that would have skilled gig workers to pounce on a project. Think of it more like Uber for data scientists, if you may, or Lyft.

Hiring people for projects needs to get as simple as finding a cab home from a really awesome and partly remembered Saturday night party. 

Teams should be able to tap into the ‘human-effort-pool’ if you will, when their chief data scientist had a meltdown and went for a soul searching expedition to the Amazon Rain Forest to experience the spirit molecule.

You get the idea. It is going to be tough for talent management staff. And God only knows what would unravel when your Chief of staff thinks that enough is enough and finds solace in minimalism.

It is slated to get pretty rough out there in the future. And yeah, this also means that the company will have greater flexibility in up-scaling or down-scaling the human effort required for a project.

So, in conclusion, the gig economy is the future, and The New York Times just messed up. This time!

FAQs

Why is the gig economy driving the need for fast pre-hire background checks?

As you can see, the rise of the gig economy has made employee screening more complex—and more important than ever. Equally important is working with a trusted background check partner who takes the time to understand your company’s specific needs.

I run a seasonal business and rehire most of the same people each year. Do I need to re-screen everyone?

YES. A lot can happen in six to 12 months—car accidents, drug use, criminal case, etc. Sure, most of your former employees will probably sail through the re-screen no problem. A bad hire could cost your business big bucks.

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Doing background verification yourself is complicated and time-consuming. Try our employee background verification platform, Springverify – where employee verifications happen seamlessly and with minimal effort required from both the company.

Last updated on May 19 2021

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