Why Gig Platforms Need Modern Background Screening Tech To Excel in 2022
Gig platforms are looking to onboard employees as soon as possible. But older identity verification methods commonly used are increasingly susceptible to fraud. In this article, David Bloom, general manager, Sterling Gig Identity, details how Gig platforms can use modern technology to stay competitive and avoid risk.
Over the last few years, the Gig economy, which offers digital platforms to connect customers with freelancers for short-term services, has been growing in importance. As we head into 2022, Gig has grown as an industry, but what business challenges have grown alongside it? While Trust and Safety teams focus on onboarding people quickly, they also face a very real and costly risk of fraud. How should you proceed when the safety of your customers, the trust of your community, and the protection of your brand are all so critical to your platform’s success?
Forgeries have become even more sophisticated and easy to obtain, but fortunately, so have digital identity verification methods. A more modern approach to identity verification uses technology partnerships to hire confidently, help protect against risk, and deliver a seamless candidate experience.
Contingent Workers Fuel Today’s Gig Economy
The state of the Gig industry is strong at the end of 2021 as we continue navigating the pandemic. According to a 2021 workforce report from ADP Research Institute, more than half (54%) of the global workforce is more interested in contract work since the start of COVID-19. Thanks also to the subsequent ‘Great Resignation,’ various industries have been transitioning more to a Gig model and tapping into a ‘contingent’ (i.e., on-demand) workforce such as healthcare and finance.
Today there are so many platforms people can contact to get work. Which do they end up choosing? Simple, they pick the highest earning potential with the quickest time-to-onboard. It’s why lots of candidates will go through your company’s entire hiring process to end up ghosting you. And it’s a repeatable loss to your Gig business.
We believe this problem will continue, and candidate activation will likely stay poor for Gig employers overall. The drop-off rates from candidates in the hiring process can be 70% or more, and it can be more than 50% after the background check. So Gig businesses always need ways to reduce their pure acquisition costs, which can amount to hundreds of dollars per candidate. In fact, Gig companies often tell us it costs them between $250 to $350 to hire a worker.
That’s why in Gig, we’re seeing an increasing business focus on operations, onboarding efficiencies, and frictionless background screening. These are all areas where an experienced background screening partner can help you reduce your time-to-activate and improve your acquisition efficiency.
Gig Platforms Drill Down Into Identity to Create Trust
Going into January 2022, Gig is fast maturing as an industry. Today’s Gig platforms have had time to refine their business model, and they know that the fundamental ingredient to their success is community. What exactly does this mean? It means your customers and your community need to feel safe when interacting with each and every one of your workers. For example, when you’re in the backseat of a stranger’s car or letting someone into your home to take care of your pet or your parent, you’ll probably ask yourself at some point: ‘Do I feel safe?’ Gig transactions like this are intensely personal, so your customers need to feel comfortable, or they won’t use your service again.
That’s why the Gig companies which will succeed in 2022 are the ones that already recognize this essential need to create and nurture a community based on trust. And if your business isn’t running a detailed background check, you’re likely going to feel this lack of customer comfort in terms of a competitive disadvantage. Because as we all know, once you’ve lost trust, it’s tough to earn it back.
A closely-related trend we’re seeing among Gig companies with the opportunity to scale up is that they’re operating their platforms in a more advanced and detailed way. For example, onboarding teams can now examine their platform and see where they can improve hiring efficiencies to reduce their acquisition costs.
By taking a more modern approach to identity verification, Gig HR managers can benefit in several ways, including:
- Reduced time-to-hire gives you a competitive edge
- Improved candidate acquisition ROI
- Help ensure your applicants are who they say they are
- Fraud protection helps guard your brand against loss of reputation and litigation
Modernizing Identity Verification in the Age of Online Fraud
For the most part, every Gig business at scale is already running some form of a background check for trust and safety. But many platforms aren’t following up by using modern identity verification methods to protect against fraud. Hiring managers are also afraid to scare applicants away by making the hiring process longer. But in 2022, Gig platforms will need to strike a balance between hiring quickly enough to retain candidates while also protecting themselves against fraud. So how can you try to solve both business problems?
We’re finding that Gig business owners are still unaware of how much fake data and PII (personally identifiable information) can be found online and how many threat actors are willing to use it. Criminals are now creating convincing forgeries of hiring documents like U.S. passports and state drivers’ licenses. Unfortunately, it’s all very easy and cheap to do.
And what’s the cost to your business? Verizon’s 2021 Data Breach Investigations Report reveals that the median cost of a single breach is $21,659.
True, taking a selfie and a picture of a driver’s license was state-of-the-art in 2017. But that’s no longer the case. Like any technology, identity verification is constantly-evolving. For example, the old security measure of (KBA) knowledge-based authentication was significant 10 or 15 years ago. Likewise, scanning a driver’s license and comparing it to a selfie isn’t the state of the industry anymore.
The new conversation we’re hearing in the Gig world is the need for platforms to think about identity verification in a broader sense. Many background screening companies are just looking for document images and marking off checkboxes, but comparing a photo of an ID document and a selfie isn’t solid identity verification anymore. Instead, think of identity as a backpack filled with several different items: your face, your documents, your PII, your personal history.
Not everything in this ID backpack will matter to every company, but to help avoid fraud and help protect their customers, Trust and Safety teams will need to see more of them in 2022. An experienced background screening provider can use new techniques (including PII verification and social media screening) to search for further proof of identity to help verify that your candidates are who they claim they are. A major added benefit — many of these new techniques are opaque to users. They don’t add time or friction and probably reduce both.
Thankfully, in 2022 Gig onboarding teams don’t have to spend their workweek playing catch-up with these emerging digital identity trends. Identity security solutions are helping Gig management to protect employers, their staff, workers, and communities. Modern background screening technology is now available to provide your platform with a fully-integrated trust and safety identity verification solution to replace yesterday’s outdated verification methods.
This article was originally published in Toolbox HR.
Sterling is not a law firm. 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.
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