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General manager, North America, Xref Limited, a human resources technology company

The gig economy is growing – fast. According to research from Intuit QuickBooks, an estimated 45 per cent of Canada’s work force will be self-employed by 2020.

Overall growth is being driven by the changing habits of young professionals, with freelancing platform Upwork revealing that almost 50 per cent of millennials now choose freelancing as a career path – an option that allows for creative autonomy, flexibility, travel and quality of life. In response to this trend, companies are moving toward an agile workforce, one in which employers can source the talent, skills, and experience they need without incurring the costs (and risks) of hiring permanent employees.

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However, there are some potential downsides. In a gig economy, workers must live with the uncertainty of impermanent employment. Employers, on the other hand, run the risk of not ending up with the employee they thought they were hiring, as freelancers are rarely vetted as thoroughly as candidates for permanent positions. This despite the fact that gig workers can do just as much damage to an organization as full-timers, whether through benign incompetence or intentional malice.

But these risks shouldn’t define the outputs of a growing gig economy. The benefit it offers employers in finding great talent with the specialist skills required for a certain period of time can far outweigh any potential threats. Recognizing the opportunity simply requires us to treat candidates for short-term opportunities the same as we would applicants for permanent positions.

One task that’s often overlooked in order to quickly recruit the best contract employees is reference checking, but here are just three reasons why it’s still critically important in the gig economy:

Protect the house

Let’s be clear: most freelancers are great, but opening up your business to a newbie – without sufficiently vetting them first – means you’re giving a relative stranger access to a range of potentially confidential information, including client details, creative briefs, intellectual property, strategic plans and possibly even customer data. Your business is built on years of blood, sweat, and tears, so don’t let a snap hiring decision put it at risk. Reference-checking ensures your freelance prospects are trustworthy professionals with third-party confirmation of their respect for colleagues, companies and codes of conduct.

Find the right fit

Reference checking isn’t just about protecting your business – it ensures you’re hiring who you think you’re hiring. Now, you might be thinking, “Who has time to conduct a lengthy reference-check process for a short-term freelancer?” And maybe a lengthy process would defeat the purpose of the nimble gig economy, but luckily tools such as Xref let you vet candidates in minutes. You can make confident and informed decisions without falling behind the fast-moving world of freelancers. Reference-checking is also a good way to weed out candidates who make strong first impressions but aren’t actually the best workers. On the flip side, reference-checking can help you recognize high-potential candidates who maybe didn’t make the best first impression. Don’t just trust your gut instinct; combine your experience and expertise with accurate and reliable data-driven insights.

Level the playing field

Checking references in the gig economy can help the candidates, too. This is because what’s needed of freelancers is often different from what’s needed of permanent employees. What matters for these short-term employees is that the deliverables are clear so end results meet expectations. Reference-checking ensures acceptable candidates aren’t ruled out on irrelevant grounds. A marketer who’s tasked with sourcing freelancers, for example, might not know exactly what experience to ask about. But an HR-driven process will identify the necessary qualifications and ensure hiring decisions are based on a combination of what’s provided on paper and what the reference check reveals.

A changing workforce is all the more reason to ensure your business is safeguarded against malevolence by asking the right questions and finding the right candidates. Reference-checking – which, thanks to technology, is now easier and more reliable than ever – is a critical part of safely benefiting from the fast-growing gig economy.

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