Written By ESR News Blog Editor Thomas Ahearn
Employers and Human Resources (HR) professionals will be bombarded with meaningless marketing buzz offering new HR technology that promises to disrupt stodgy old industries and radically change outdated business models in 2016. However, these new techniques may largely be without substance. This is the number 4 trend selected by Employment Screening Resources® (ESR) Founder and CEO Attorney Lester Rosen for the 9th annual ESR Top Ten Background Check Trends for 2016.
“It’s popular these days for start-ups worldwide to claim they are disrupting stodgy old dormant industries and are radically changing outdated old business models, including Human Resources processes such as pre-employment background checks,” says Rosen, author of ‘The Safe Hiring Manual’ and a noted background check expert. “However, it is important to really understand if an HR disrupter is really just an outstanding marketer who has convinced investors that they have done something new instead of just taking old processes and repackaging them with a pretty new bow.”
Rosen, a frequent speaker on background check issues, adds that “buzz” is real in the sense that perception trumps reality. “For example, in the HR space there are firms that have done the equivalent of taking a number two pencil and claiming they have re-invented and disrupted a dormant industry by putting the eraser on the other end,” Rosen says. “In other words, HR professionals need to be on the alert for HR and background check solutions that come packaged as disruptive but, in fact, do not really accomplish anything new.”
According to Rosen, much of this buzz is coming from the so-called “gig economy” that focuses on temporary work, or “gigs,” where people run errands for other people such as driving, walking dogs, cleaning rooms, doing laundry, cooking dinner, or shopping for food. “As one commenter put it, the gig economy does everything your mom use to do for you when you lived at home,” says Rosen. “It’s not just transportation applications or house sharing services but numerous websites and apps where people advertise their part-time services.”
This trend is growing fast. A 2015 American Action Forum Report estimated the “gig economy” accounted for 30 percent of new jobs and created new income sources for 2.1 million people in the United States between 2010 and 2014. According to a report from Intuit, a business and financial management solutions provider, 7.6 million people will be part of this on-demand economy by 2020, and that slice of the labor market will grow by 18.5 percent per year over the next five years.
The Intuit report also revealed a broader trend in the U.S. within the “contingent” or “independent contractor” workforce which has grown “from 17 percent of the U.S. workforce 25 years ago, to 36 percent today, and is expected to reach 43 percent by 2020.” However, Rosen says that this type of “part-time” economy should still be subject to some sort of background check process used in the “full-time” economy to ensure safe workplaces.
Other research documenting the rise of this growing trend in America indicates it is much bigger than the employment data suggests. A story at Fusion.net revealed that the number of Americans filing a 1099 tax form that “gig economy” workers must file increased in the 2000s. Another Fusion.net story found increases in the share of 1099 workers in many major U.S. cities and that a recent survey revealed 60 percent of “9 to 5” workers get at least 25 percent of their income from work outside regular jobs.
Rosen says the problem with applying this part-time economy approach in HR technology – especially in the background check process – is that background checks are closer to rocket science in terms of its sheer complexity than simply data retrieval and distribution. “Background check laws are constantly subject to legislation, regulation, and litigation,” explains Rosen. Along with the federal Fair Credit Reporting Act (FCRA), there are laws for all 50 states and Equal Employment Opportunity Commission (EEOC) guidance on using criminal records.
Although HR processes like background checks may be attractive to the technology sector since it appears on the surface to simply involve slicing and dicing data, in fact it is all about domain expertise, accuracy, and legal compliance as discussed more in detail by Rosen in Trend 5 of the ESR Top Ten Background Check Trends for 2016.
Rosen says compliance expertise and accuracy is the name of the game in the background check industry. The background check firm he founded in 1997, Employment Screening Resources® (ESR), has long utilized robust proprietary technology that includes several integration Application Program Interfaces (API) and Applicant Generated Report (AGR) release forms.
“There is nothing new about this technology but some ‘tech’ firms claim they are revolutionizing the background check process when they are in fact doing the same thing ESR and numerous other firms have done as early as 2008,” explains Rosen, who says that many firms, including ESR, have long utilized an API, including a Representation State Transfer (RESTful) API, to connect with partners and employers. “That is old hat in the background screening industry,” adds Rosen. “The real question is how technology promotes legal compliance and internal processes to ensure accuracy.”
ESR Background Check Process Offers Assured Compliance Technology
Employment Screening Resources® (ESR), a leading global background check firm, understands that compliance with laws that govern the background check process can be confusing at best. ESR Assured Compliance® technology – only from ESR – is constantly updated with required changes in hiring and employment laws making compliance with new regulations virtually painless in a totally paperless environment. To learn more about ESR, call toll free 888.999.4474 or visit http://www.esrcheck.com/.
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