June 28th, 2022 | Sterling

Hiring Trends in the Staffing Industry: Sterling’s 2022 SIA Report Reveals Identity Fraud Is on the Rise

Over the past few years, the staffing industry has experienced a number of unpredictable twists and turns. Since the emergence of the Covid-19 pandemic, it seems like almost everything we’ve known and come to expect — whether from the hiring process or from the workplace as a whole — has had to be dramatically re-evaluated, putting staffers on high alert to keep up with the latest challenges and trends.

Needless to say, today’s hiring environment can be confusing and stressful to navigate, which is why Sterling has been particularly focused on our research efforts and on offering valuable insights to the staffing industry whenever possible. As a company dedicated to enabling safe and efficient hiring processes, it’s critical that we not only understand how workplace trends are shifting, but also what the evolving compliance landscape requires of businesses in order to hire with confidence, while providing security for both their existing employees and potential new hires.

For our latest research report, we teamed up with Staffing Industry Analysts (SIA), a global advisor on staffing and workforce solutions, to explore recent staffing trends and what they imply for the future of identity verification in the hiring process. While the report dives more specifically into the need for increased verification of contingent and remote workers, it also reveals some surprising (and troubling)—trends regarding identity fraud that all hiring professionals should be aware of.

Here are just a few key takeaways:

Fraud Is Becoming a Serious Problem for the Staffing Market

First of all, while we remain strongly optimistic about the overall state of today’s staffing market, all of us must also acknowledge its various challenges, particularly the recent considerable rise in instances of fraud and identity theft.

Of 188 staffing companies surveyed for our report, 40% said they had an end client discover that an employee had lied about their identity in the past year. Moreover, and perhaps even more chill-inducing, more than 30% cited incidents in which the person who showed up for a job was not the same person who took the pre-employment assessment.

So why is this happening? For one thing, cases of identity fraud in the hiring process are easy to underestimate, or at least they have been until recently. While we have all heard isolated stories, identity fraud isn’t something most staffers expect to encounter on a regular basis, especially when they are incredibly careful about performing background checks on all potential new hires.

However, despite the widespread utilization of background checks across industries, we also found out that many misconceptions remain regarding exactly what a background check includes (and does not include). More specifically, nearly two-thirds of respondents admitted to falsely assuming that their background check provider was also performing identity verification as part of the hiring process.

While it’s reasonable to consider identity verification as an integral part of any background screening , HR staff need to be increasingly thorough when acquiring these services in today’s hiring environment. Rather than rush into an agreement with a background screening provider, it’s important to know what their services include, with an eye to avoiding subpar processes or technology when it comes to ensuring employee safety.

Competition and High-Volume Hiring Both Demand Focus on the Candidate Experience

The Covid-19 pandemic and subsequent “Great Resignation” has created a unique problem for the staffing industry: Businesses often need to execute high-volume hiring initiatives in a job market paradoxically defined by an increased competition for talent. And in light of the aforementioned rise in identity fraud, optimizing the candidate experience to remain competitive should never be done at the expense of security in the workplace.

The good news? HR staff don’t need to come up with a creative solution to this problem on their own. The right background check and identity verification provider will be able to offer enhanced security against fraud, in addition to more intuitive tools for optimizing candidate experiences and hiring multiple candidates in a short period of time.

At Sterling, we help our clients resolve this issue through the use of a frictionless mobile candidate hub, an easy-to-use client platform that makes it easy to access relevant background information related to multiple candidates. Additionally, Sterling’s candidate hub leverages a diverse range of analytics to help staffing firms make more educated hiring decisions, while our dedicated client services team is always available to help our clients whenever necessary.

Rise in Remote and Contingent Workers Underscores the Need for Identity Verification

While no one can predict exactly how remote work will continue to transform the workforce in the next five or ten years, the fact remains that more people are working from home today than ever before. According to Owl Labs, 16% of companies across the world are still operating 100% remotely, and of the businesses we surveyed for our report, around 30% of their contingent or independently-contracted workforce continues to work off-site.

Importantly, our research also reveals a clear link between remote work and the threat of identity fraud, with 70% of respondents expecting instances of fraud to increase along with remote work arrangements, as well as the advancement of manipulative technologies such as “deep fakes.”

If staffers expect to satisfy remote and contingent work requirements safely, they will need to employ hiring processes that are uniquely vigilant surrounding fraud and identity theft. But how exactly should they go about it? The simple solution is to utilize identity verification as the first step of any background check, and in fact those who read through Sterling’s full report will find some interesting data to support the fact that this strategy is absolutely vital to mitigating fraud during the hiring process.

Although it may be true that we haven’t seen the last of novel challenges for the staffing industry, that’s all the more reason for hiring professionals to protect their clients against the often-preventable risk of identity fraud. To learn more about how recent hiring trends are underscoring the need for more thorough and sophisticated background screening solutions, click here to download the latest report researched and written by SIA and Sterling: “The Future of Identity Verification in Contingent Work: Flipping the Paradigm.”

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.