The Gig Economy is often associated with ridesharing and food delivery organizations, such as Lyft, Uber or DoorDash, but this industry has expanded to include a variety of other types of businesses. Consumers can get anything from takeout and groceries to prescriptions delivered or can use one of the many home services apps to have someone assemble their furniture, fix plumbing in their home or to hire a personal support worker.
What is the Gig Economy?
Also referred to as the on-demand industry, the gig economy is a free market where individuals are paid for short term jobs or tasks. The term gig economy comes from each work task being similar to an individual “gig.” This type of employment gives people from all over the world the chance to provide services, on-demand, to people who need it.
On-demand organizations provide a platform, typically a mobile app, that allow consumers to locate a service they require. These apps usually connect a consumer, with an individual who can complete the task they need done. Examples include, ordering groceries through an app such as Instacart, where a consumer places the order for their groceries, and they are connected with an individual who will do the shopping for them, or a consumer looking to have work done around their home, goes to an app to find a contractor who is licensed to complete that task.
Although the use of on-demand services was on the rise before 2020, the COVID-19 pandemic quickly increased the demand for gig economy services. With stay-at-home orders across Canada for many months, Canadians relied on food and grocery delivery services more than any time before.
How is On-Demand Work Different than Traditional Employment?
The individuals who complete the tasks as part of on-demand services are not employees of the organization, but self-employed contractors and freelancers, also known as contingent workers. Working as a contractor for an on-demand organization gives individuals freedom and flexibility to work as much or as little as they want, and to set their own hours. Contractors are often working for multiple organizations or doing different tasks. Individuals working in the Gig Economy are often using it as a way to make additional income outside of their full-time employment.
Organizations that utilize freelances enjoy the perks of not having to pay for office space and benefits, as well as having a larger pool of candidates to choose from. When looking for someone with a specific skill set, companies can now access a contractor from anywhere around the world.
Why are Background Checks Important?
Every organization should have a background screening policy in place for both its employees and contractors. Despite freelancers not being employees, they still represent the organization to the public and impact the business’s reputation. The hiring process for gig-workers tends to be less complex than hiring full-time employees but background screening should still be a step in the onboarding.
Organizations need to protect their brand and part of this is ensuring that the necessary due diligence has been done on employees and contractors. If a position requires delivering food or driving people, it is imperative that the person doing the driving has a valid driver’s license and is a safe driver. If a company is contracting out home renovation services, it is necessary to confirm that the person doing the renovations has the right certification. Criminal record checks should be conducted, especially for those contingent workers that will be driving people or going into consumers homes, to ensure there are no relevant convictions that could impact the work.
Gig Economy Background Check Components
The gig economy is known for providing services to consumers on-demand – in other words as soon as the consumer identifies the need - and the contractors applying to fill the positions are no different. They don’t want to have to go through a long and complicated process to become a delivery driver. Ensuring that your background screening process can seamlessly integrate with your mobile app or platform helps avoid a lengthy application process, allowing the individuals to quickly complete their background check as part of their application process, without having to go to a separate website or wait for an invitation to start their background check.
Remote ID Verification
ID verification, although required for criminal record checks in Canada, is also important when onboarding contractors, as often no one from the organization is meeting them in person. Verifying that an individual is who they say they are, is a step that all organizations should take, especially with the growing number of identity thefts in Canada. Traditional ID verification methods have often required the candidate to attend Canada Post in person or go to their Hiring Manager if they are not able to pass the initial electronic ID verification process. These manual steps create excess candidate drop off, especially for gig economy organizations. Using a background screening process that has a fully online ID verification method, such as LiveVideoIDTM, reduces friction for applicants during the onboarding process, resulting in more contractors filling open positions.
In the on-demand economy, most companies always have open positions. In order to have an easy sign-up process for their contractors, there needs to be as little intervention from the company as possible. When an individual applies to be a driver for a delivery company for example, they should be able to go through the entire application process, including the background checks, on their own, from the company’s website or within their mobile app. The process should be mobile optimized so that the candidate can complete their background check on any device, at any time.
Using a candidate driven method also provides the option of having the contractor pay for their own background check which eliminates the cost associated with background checks for the organization.
With over 40% of Millennials working in the gig economy, it is an important part of the future of work in Canada. Organizations need to adapt to ensure they have a streamlined onboarding and background screening policy in place for hiring contingent workers. Speed and technology are two of the most important components of a background screening process for on-demand companies and all background check providers should be evaluated with this in mind.
For more information on how ScreeningCanada helps some of Canada’s largest on-demand companies with their background checks, contact a product expert here.
If you are looking for more information on how to improve your candidate experience, check out these 5 tips.