The alternative workforce has been a burgeoning part of the american economy for the past couple of decades. From a survey of 8,000 people across europe and the U.S., the Mckinsey Global Institute determined that between 20-30% of workers are engaged in different types of “independent work”. In a Global Human Capital Trends study from earlier this year, Deloitte projects that gig work participants will triple to 42 million people in 2020. Intuit disagrees- they forecast a staggering 76 million people, or 43% of the workforce, as engaging in some form of self-employment next year. MBO is predicting 60% of the American workforce as being in the gig economy by 2027. It would seem that our society, economy, and workforce has reached an inflection point from a trend that has been long building.
People employed in this style of work may be contractors, freelance or independent workers, gig workers, or crowd workers. Their terms of employment are constantly beginning and ending throughout the year, and they present some unique unique identity management hiring and procedural challenges. How can they be trusted? How can their identity and credibility be established in a way that is authoritative for companies, workforces, clients and customers? And can that be done quickly and smoothly- so that gig works proceeds with the fluidity it is intended to?
While not contractors or gig workers, the remote workforce- those who never directly interface with the core of the company operation, present similar challenges. Their identities must be vetted, and their ID markers must be authoritative.
Complications for Human Resources
Deloitte’s report and survey of HR departments reveals even more information:
“Seventy-five percent of this year’s survey respondents indicated that HR supports sourcing alternative workers; 66 percent reported HR is involved in training them, 65 percent said HR negotiates work arrangements, and 63 percent reported HR is involved in benefits management”.
We see that the majority of HR departments show a willingness to engage with alternative workforces. However, a report from our partner Sterling, on another survey of HR departments, indicates some obstacles. 64% of their survey respondents express that the gig economy is affecting their hiring and staffing methods (with some confusion about laws and standards regarding background checks for these workers). 48% of their respondents have dealt with identity fraud in new hires, and most do not employ continuous background monitoring services- though 38% of those who do have uncovered criminal activity. There also appears to be some confusion in HR departments with regards to shifting drug decriminalization laws, and when and where to test for drugs in hires.
While many human resources leaders would like to capitalize on the alternative workforce, their efforts are not without complications. Without appropriate identity management systems to handle and background check the influx of unknown freelancers and contractors, HR managers might be going through as much effort as they would to administer full-time employees.
For ensuring the safety and the competency of a company’s workforce, a fully effective identity management system would utilize alternative worker background checks, identity authentication-including biometrics, drug testing, continuous screening, and standardization with labor laws and regulations. For keeping the speed and flexibility of operations, the self-onboarding process must be smooth and rapid. For those gig work companies who interface with the public in a b2c format, their customer base must also buy in to a worker identity verification system that is considered trustworthy and authoritative.
Digital ID badge systems can unite all of these preconditions into one solution, and solve the age old question of “whom do I trust?” while meeting the rapid demands of the modern, gig-oriented workforce.
The flexibility of digital IDs allows for a wide range of advantageous integrations. In the case of Virtual Badge, our partnerships with Sterling, Clearstar, and Hireright enable us to link rapid online background checks to virtual identification. The records our partners monitor include, but are not limited to: driving records, criminal records, license status, drug test screening, education history verification, job history verification, verification of the possession of licenses, certifications and accreditation, fingerprinting, civil court case histories (e.g. breach of contract cases), sanctions, violations of Fraud and Abuse Control Information System (FACIS), Office of Inspector General (OIG) violations, and Office of Foreign Assets Control (OFAC) violations. Our platform encompasses virtually every type of background check, linking the screened identity to an authoritative employee ID badge. The screening criteria may differ from company to company, but the full spectrum of screening is available to any organization looking to establish trusted relationships with their gig workers.
As discussed in previous posts, our self-onboarding process is extremely simplified and rapid. For HR departments who may never actually meet face to face with their gig and freelance hires (or remote workers), digital ID self-onboarding is a boon.
A Necessary Industry Standard
In the bigger picture, Virtual Badge can become a unified solution across platforms, companies and industries- as the ultimate gig worker identity verification system. The standardization of such a system would benefit all parties involved.
As gig workers, freelancers, and contractors jump from company to company, an industry standard employee ID platform would allow their transitions to be seamless. The growing portion of freelancers who work in multiple industries would find ID standardization doubly useful.
In contrast to controversies that have dogged gig companies with unsafe workers (e.g., abusive cab drivers) a nationally recognized ID badge, identifying strictly vetted workers, would do much to restore public trust and confidence.
By embracing an industry standard platform with a streamlined and thorough background verification process, human resources departments would have vastly reduced burdens of workload and legal liability. Those aforementioned HR departments who have grappled with identity fraud and criminal activity could massively reduce their legal exposure, should such a platform come enjoy widespread adoption.
Extending the Solution
Virtual Badge integrations with payroll services could also ease the burden on HR and accounting departments by uniting time tracking, payroll processes, and direct deposit into one automated step. If adopted as an industry-wide platform, standardized, automated payroll further increases the fluidity of gig work, hiring and staffing.
Linking identity profiles to skills, certifications, work history and preferences could also create a facilitated talent-matching system, placing gig workers with jobs and tasks that are an ideal fit for each individual. For particularly large organizations, this can eliminate a variety of HR headaches and clumsy trial-and-error staffing.
Contingent workforce, freelancers, gig workers- they may go by different names, but their presence is felt all the same. Structural changes in the economy have led to contractual employment becoming a major portion of the global workforce. With human resources departments struggling to accommodate the new changes, workers straining to fit as many gigs into their workload as possible, and a beleaguered public who has become wary of the low barriers to entry, an identity verification vacuum has formed.
Digital ID badges and identity management systems are progressive solutions that can rescue this sector from it’s current identification morass.
Of course, comprehensive screenings and ongoing background monitoring, rapid self onboarding, secure identities, and a concomitant public relations campaign can do wonders for any company. With digital ID systems, companies can smoothly commission and decommission trustworthy contract workers. But with industry wide adoption, a leading digital ID platform could collapse inefficiencies across the entire contingent workforce and it’s industries.