Welcome to the gig economy – a vibrant, ever-shifting landscape of short-term contracts and freelance gigs replacing the traditional 9-to-5 jobs. This new era is rewriting the rules of employment and posing intriguing questions for HR professionals. How do you adapt our hiring strategies?
And even more – should you (or can you) perform a background check on someone who isn’t a fulltime employee?
The gig economy complicates this traditional hiring process for a few reasons:
- The sheer volume and turnover rate of gig workers make comprehensive background checks for each individual a logistical and financial challenge.
- The nature of gig work, often short-term and project-based, raises questions about the necessity and practicality of in-depth background checks.
- The decentralized nature of gig work, where workers often find opportunities through third-party platforms, adds another layer of complexity in determining who is responsible for conducting these checks.
While these are valid concerns, the fact remains – comprehensive background checks are imperative for any hire, no matter how long they work at your company and in what capacity. A bad hire can, at best, derail a company’s workflow. At worst, it can put your business in potential danger.
When hiring contractors, that risk is even higher. Because they are not as closely affiliated with the company itself, it’s easy to feel like they don’t have to be monitored as closely as full-time employees. But in reality, the opposite is true.
Every person on your payroll is an extension and representation of your company, regardless of their full involvement or capacity. Background checks serve as a crucial step in your risk management strategy by ensuring:
- Accountability: Contractors often have access to sensitive company information, resources and even client data. As an outsider to the company, this poses a risk of potential information leakage or abuse. It’s vital to ensure that they do not mishandle information or use company resources and information for their own, or other clients’, benefit.
- Appropriate Representation: Contractors represent your company and its values, even if their involvement is less direct. Background checks help ensure they have a good character and will act professionally, reflecting positively on your company’s reputation. This is crucial because contractors may have less loyalty to the company and a personal stake in its success, potentially impacting their conduct and the way they represent your business. You need to ensure that they have good character and will not act in ways that negatively affect your company’s reputation – either in or out of the scope of work. Their actions reflect on your team as well.
- Protection: Every employee on your team deserves a safe, respectful working environment. When you bring in someone from the outside for any reason, you owe it to those currently at your company to make sure this contractor does not have a history of violence, negligence or any other character traits that can contribute negatively to the work environment.
- Compliance with Regulations: Depending on your industry, performing background checks may be a legal requirement, especially for positions that involve working with vulnerable populations, handling sensitive data, or operating in a regulated environment. Failure to conduct these checks can lead to legal repercussions.
- Quality Assurance: Background checks can help ensure that the contractor has the qualifications, experience, and skills they claim to have. This is crucial for maintaining the quality of work and services your company provides.
When hiring a contractor, there are several key pieces of information that are especially important to know to ensure a successful and compliant working relationship. These include:
- Qualifications and Experience: Unfortunately, it’s not uncommon for potential hires to lie about their qualifications, skills and experience. For contractors, the risk of deception is even higher. Verify their educational backgrounds, certifications and work history to make sure they are able to follow through on the tasks you’ve brought them in to perform.
- References and Past Work History: One of the advantages of hiring a contractor is that they likely have worked with significantly more businesses than a traditional full-time hire, which gives you the opportunity to check references across a wide array of projects to find consistencies in their work habits, skills, deliverables. It’s especially important to get a sense of how the contractor tends to react when issues arise throughout the project. Nothing goes smoothly 100% of the time, so you need to ensure that if you hit an unexpected snag, they aren’t going to up and run away halfway through the job.
- Legal Compliance and Licenses: Contractors aren’t necessarily able to just pick up jobs simply because they want to – it’s a specialized type of work that often requires licenses or permits to legally perform their work. This may vary from industry to industry, but it is especially important in any type of highly-regulated industry like construction, electrical and plumbing. Even freelance writers or marketing professionals often carry insurance to protect them (and you) from errors.
- Insurance and Bonding: Hiring a contractor can sometimes mean taking on more risk than you expected. Confirm that the contractor has appropriate insurance coverage, including liability insurance and workers’ compensation (if they have employees). This protects you from liability in case of accidents or damage during the project. Bonding ensures financial protection if the contractor fails to complete the job or meets contractual obligations.
- Criminal History: Conducting a background check can reveal important information about the contractor’s criminal history, credit history, or any other red flags that might impact their suitability for the job.
- Safety Records and Protocols: Especially in physically demanding or high-risk industries, understanding a contractor’s safety record and adherence to safety protocols is crucial.
Once you verify that this contractor is a good fit, leave no room for interpretation about their responsibilities. This includes providing a clear contract and scope of work agreement. This is a detailed contract outlining the scope of work, timelines, materials to be used, compliance with regulations, and terms of payment. It should clearly define expectations and responsibilities.
Gathering this information will help in making an informed decision and establishing a productive, professional relationship with the contractor.
Background checks can vary in depth and scope, which makes it vital that you conduct a screening that gives the fullest, most accurate picture possible. It’s important to choose a reputable background check provider that is compliant with relevant laws and has a track record of accuracy and reliability to ensure accurate and legal compliance.
First Contact HR plays a pivotal role in protecting companies from the pitfalls of bad hires. First Contact HR’s comprehensive background checks stand as a vital line of defense, ensuring that the agility of the gig economy doesn’t compromise the quality and integrity of your workforce.