September 23rd, 2022 | Sterling
The Latest in Identity – Hiring Tools for the Tech Industry
Ken Schnee, General Manager of Sterling’s Tech, Media, Entertainment, and Hospitality Vertical, and Taylor Liggett, General Manager of Sterling Identity, sat down to discuss identity verification in the tech industry, new innovations with the digital wallet, and the rise of identity verification in a remote world. This Q&A will inform you about the latest innovations in identity verification and how these tools drive success in the tech industry.
Q: Can you provide a brief overview of identity verification and what industry trends we’re seeing in the space?
A: Taylor: At its core, identity verification is a very simple process and concept. Essentially, it’s making sure that you’re engaged with a real person – and that they are actually who they say they are. Currently though, identity is not a standard component of a background screen in the US.
Some countries perform more formalized standard identity verification during the hiring process. The US is uniquely behind in this area, so we’re seeing a huge trend of employers beginning to implement identity verification as the first step in their hiring process.
We’re also seeing a huge innovative movement towards digital identity. We don’t only live in an analog world anymore. The days of showing our driver’s license are few and far between. A lot of our daily transactions and interactions involve engaging in an online environment, but part of the problem is that we often go through disparate identity verification processes. We go through one process to open a bank account, another process to rent an Airbnb, and yet another process to get a new job. However, this inconvenient state of affairs paves the road to reusable identity solutions, which is a development we’re really excited about.
Q: What industries are you really seeing identity verification take off, and what are the advancements helping employers to adopt identity solutions in general?
A: Taylor: The tech industry has obvious innovators; and this is a focus area with the incredible disruption we’re seeing in the sector.
In particular, the gig economy is a major adopter of identity verification. In fact, I would credit gig with being one of the sectors that really brought identity verification to mainstream awareness. The gig industry was forced – prior to other industries’ timeframes – to have to deal with remote workforce.
Q: What are trends you’re seeing in the technology industry today?
A: Ken: The focus on gig that Taylor hit on is really what I’ll call the fulcrum of identity within our industry. Certainly Covid-19 was a catalyst here, and it jump-started a lot within the business sector, like the contingent workforce. It’s estimated that 83% of executives are reporting an increase in contingent labor. Organizations are replacing their full-time employees with contingent workers, with up to 50% of workforces consisting of contingent workers by 2050.
It’s critical that organizations get ahead of the curve. So, at Sterling, we provide our clients with the HR tech tools they need to create a foundation of trust and safety before they even have to think about how these changes are going to impact their business.
In addition to the growth of contingent work, there is also the competition for talent that all organizations are dealing with right now. It is fierce out there and it’s critical that every organization can optimize their hiring process from the very beginning to the very end. After all, why wait until you get to Form I-9 at the end of a process to figure out who this person is?
Times are changing, the economy is changing, and the entire evolution of business is changing. It’s important that criminal background checks continues to keep pace with the needs of businesses.
Taylor: There was a warning that the FBI announced a few weeks ago which essentially contained an all-points bulletin. They’re tracking stolen personally identifiable information (PII) identity fraud, and specifically called out the prevalence in the tech industry.
I think there was a common expectation that a lot of what we would see would be people altering their personal information or committing some type of identity fraud for the purposes of getting a job. Unfortunately, it’s worse; we’ve been seeing bad actors do this specifically for the purpose of getting access to proprietary information or an organization’s technology. We are seeing a lot of this happen especially in technology-related positions.
Ken: To add to that, I think there’s also a strong compliance element here – ensuring that you have really hired the right person.
We’re able to capture verified PII data with tools like identity verification. This not only helps prevent data entry errors, but it also streamlines workflows. Forward-thinking tech companies want to limit clicks and touchpoints for candidates. As a background screening company, we are on a similar mission to drive efficiency.
Q: What is the role of identity solutions in a remote work world?
A: Taylor: There’s no question that when people are behind a computer screen and face to face, their behavior can change. But I also want to be clear; we’re not just seeing a need for identity solutions just for remote work and remote employees. I can’t tell you how many anecdotal quotes we get from clients about one person interviewing and then another person physically showing up into an office. That’s right, this problem is happening in-person, not just within the remote workforce.
There’s another factor that is important for employers and technology companies to consider. Covid-19 brought an increase in fraud, particularly surrounding access to government benefits and unemployment. Criminals stole information that’s now being used and repurposed in all kinds of different ways.
A: Ken: Unfortunately, tech is one of the industries where it’s very easy to slip between the cracks in terms of identity fraud.
I recently read about an individual that was actually employed at two different companies at the same time, and had signed full employment contracts for each of them under two different, but very similar, names and three different SSNs. If you’re a tech employer, you don’t want to notice something like this six months into a big project because somebody is not being productive.
It’s critical that identity is identified on the front end for many reasons, especially in this world where being remote has created the ability to be a “ghost worker.” Frankly, identity is the ideal solution to help prevent this problem.
Q: How is identity verification fitting into the trends that we’ve talked about so far? For example, contingent workforce, remote work, etc.?
A: Ken: Identity is the solution to the problem that we’re faced with today around all the hiring unknowns. It’s not just remote. It’s also contingent. It’s the competition for talent. It’s the fact that recruiters on teams are working very hard, and when they finally get to a candidate, the background check is the last thing that they want to be worrying about. Unfortunately, people do everything they can to push the candidate through, and, as an organization, you need to have these safety nets in place. Identity is a core solution.
There are no ways around it. And it’s one way to lock in the security of your organization, your hire and your projects.
Taylor: The other piece I would highlight is that there’s a significant benefit to the candidate experience that comes with this.
Consider what we’ve done with a reusable digital identity. There are more than 90 million people part of ID.me’s digital network. What we’re seeing on average is around 30% of all candidates are pre-verified, meaning they just simply log in, share their information, and they’re off to the races. It’s an amazing experience.
These people get this tangible benefit by going through this process of a reusable digital identity that can be used with government, retail, and other organizations. This is helping streamline and modernize the overall hiring process.
Ken: One thing that’s interesting here is that most organizations believe that with their background check today, that they are doing an identity verification. There’s a service called a “Social Security number trace.” However, the unfortunate truth is that this service is not actually an identity verification.
I originally thought that SSN traces were doing more than they actually do. Now I think identity is something that will just become a norm within the industry as part of a standard background check.
Taylor: We’ve done a number of webinars and surveys where we’ve found roughly 2/3 of all employers mistakenly believe that an SSN trace verifies identity.
I think most screening companies tried to do the best they could before new solutions existed, but those effective solutions exist now. It is a security vulnerability and it’s something we need to fix.
Q: What does identity verification look like from a candidate’s perspective?
A: Taylor: Typically, the actual identity verification process is going to consist of an individual going through forms either using a mobile phone as a means of verification or using government-issued IDs.
Potentially, in some processes, you take a photo of yourself that’s matched to other documentation. Sometimes biographic data, Social Security number, and other personal details are used in this verification process. Typically, the individual is going to go through a few steps that verify they are who they say they are and they’ll provide supporting documentation or devices to help attest to that.
From this perspective, what we’re doing is asking people to verify their identity once, and it doesn’t have to be with Sterling. It can be with the IRS or California State, or any of the other numerous places that use ID.me.
When a candidate comes in, there’s this awesome opportunity to say “yes, I’ve already gone through the verification process with me, and I’ll share my information with Sterling.” The other thing that’s important to point out is that it is privacy-centric and controlled by the individual, so we believe there’s a huge benefit in people owning their own digital identity.
But if someone goes through this now and decides that they want to remove all their information or restrict it, they are in full control to be able to do so.
Even as you go through identity verification, you’re giving specific consent to share your information (name, date of birth, Social Security number, etc.) with Sterling for a background check. From a consumer’s perspective a lot of the feedback we’ve gotten is that it’s an easy process to go through. The whole process takes a couple minutes and there’s broad value.
Q: With the rise of identity verification, how will this impact tech companies moving forward?
A: Ken: The one thing that is important to most tech organizations is the candidate experience. The new hire onboarding experience is critical because it is the first impression.
What the candidate experiences from the moment that a tech organization decides to hire them until they’re physically sitting in their seat is absolutely critical.
We have developed other platform products on our system like our candidate hub and client hub. We call them mobile-first because they were designed to be built for ease of use for the specific users who are actually experiencing them.
I would say the same for our identity solution. We built out a workflow and solution that is seamless. We may be physically flipping on a switch to verify identity, but we’re doing so without changing the turnaround time. We’re instead gathering accurate candidate data and improving the candidate experience. This makes everything more seamless and easier for the candidate.
By combining all those pieces together, we’re not just building a product for background screening, we’re building an end-to-end product for the tech industry.
Q: What do you see as future possibilities with digital wallet?
A: Taylor: There are a couple things in the immediate future. We’re focused on identity becoming a foundational component of background screening. Our view is that every background screen should start with identity and then inform the rest of the downstream hiring processes.
The broader rise of digital identity is an important trend to take into account, and the US is arguably not as far ahead as some other countries. For example, the EU is scheduled to complete the technical framework for a government digital wallet. It won’t be long before we start to see this happen in other global regions.
The digital wallet and reusable digital identity are the future of where things are rapidly heading and are also part of Sterling’s focus areas. Candidates can store verified attributes about themselves so they’re not needing to constantly re-verify their educational degree, work history or other immutable data.
We’re focused on tying everything to the individual candidate with everything under the individual’s control. The future involves pre-verified candidates, and individuals entering a hiring process with verified data about themselves. I think that this “digital wallet” style of reusable digital identity is really the future, and it’s something that I’m particularly excited about.
Ken: I believe that identity will be core to every person brought into an organization. Identity goes beyond verified credentials. We’re going to start to see data stored about individuals that is very hard to verify today, like having certain certifications, or having coding experience. These certifications are issued from various places so it’s very hard for organizations to verify. As we look to the future, verified credentials will enable better quality and performance.
As Ken and Taylor discussed, identity verification is an essential component to every background check. Identity verification adds a second layer of protection in knowing your workers and are ultimately a stepping stone to building a foundation of trust and safety.
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