As economists are beginning to predict that the economy is showing signs of a turnaround, the first area in which the economy is seeing an uptick in hiring is the contingent workforce. In fact, a Bureau of Labor Statistics report released last month pointed out the significant and steady growth in the contingent labor sector. It stated that while 85,000 payroll jobs were lost in December, temporary employment rose by 47,000 jobs. In fact, growth in the temporary workforce has been steady since July and all indications show that the growth rate will continue.
Facing a potentially slow recovery, companies are reluctant to hire permanent employees and are instead turning to contingent staffing (contract, temporary, part-time) to cautiously begin workforce expansion. This portion of the employee base can represent a critical security gap, however, as they are often not background screened as rigorously as permanent hires.
HireRight’s recent Background Screening Benchmarking Report found that only 31 percent of respondents screened their extended (or contingent) workforce, indicating that over two-thirds of employers may have a major hole in their security policies. As contingent staff is typically not hired through the same on-boarding process as permanent hires, the stringent employment screening requirements applied to the permanent workforce are often not applied to this category of worker. Background screening can often be just an after-thought.
Failing to screen the extended workforce is always a security risk, but in today’s economy, contingent employees make up a more significant percentage of a company’s staff and they fill more critical positions, thus increasing the risk both to the company’s workplace safety and to its performance as business-critical functions may not be staffed by the most qualified person. In addition, the phenomenon of adverse selection comes into play as individuals who know they might not pass a thorough background check apply to companies they think are less likely to run background checks – staffing firms and small to mid-sized companies that may not have formalized screening policies in place.
These issues point to the need to incorporate background screening of the contingent workforce into the organization’s comprehensive workforce screening program. A best practice to follow is to mirror screening procedures and policies of the permanent employee base. In addition, some programs would benefit from incorporating technologies and solutions that are specifically designed for the unique requirements of the extended workforce. These solutions can include collaboration capabilities that allow both the organization and its staffing vendor to view the background screening reports in real-time, as well as incorporate enforcement capabilities such as not allowing a security badge to be issued until an individual has passed the background check.
While nearly all large companies are conducting background screening, two-thirds of companies are not effectively screening their contingent workforce, indicating a significant security risk in the majority of organizations. This is an often overlooked aspect of the screening policy that must be reviewed and addressed. Consider working with a background screening provider to help you eliminate these vulnerabilities.