About 34% of the U.S. workforce makes up the gig economy in the U.S. This means that many employed individuals and self-employed individuals are in some way a part of the gig economy, driving its capacities.
There is no denying that the gig economy is one of the fastest emerging industries contributing over $1 trillion to the U.S. economy. However, the more the gig economy grows; the probability of risk also increases. This is due to the instability and non-credible sources of talent that the gig economy is burdened with.
Today, we will discuss how identity verification is slowly being recognized for its importance and how the gig economy is in the mood to be stabilized for consistent growth and longevity.
What Is Identity Verification?
Identity verification is an age-old concept of validating and verifying the identities of an individual or an entity. The social security information, such as the name, date and place of birth, and residential address of the individual, are obtained to validate if the identities match the Social Security Administration records.
For entities, employer identification number or taxpayer-identification number (TIN) and the name of the entity are validated per the IRS records to ensure that the identities match the official records.
The process of validating and verifying the identities and the proof of identities against the authorized data lists of the government is identity verification.
What is The Primary Function Of Identity Verification?
The primary function of identity verification is to validate and check if the identity information obtained from the source individual matches the identity information recorded in the official data lists.
For example, when you’re obtaining the TIN from a vendor and checking that TIN against the IRS database, you’re validating the vendor’s identities per the authorized TIN matching data lists of the IRS, giving you accurate results.
Trends In Gig Economy: Identity Verification On The Rise
As true it is that the gig economy is on the rise, it is also true that the gig economy has a long-standing issue with identity. And this identity problem is impacting the hiring and staffing practices within the industry.
Many employers find it hard to employ reliable and credible gig workers. It is to be noted that many employed individuals are seeking a “side hustle” in the gig economy for extra income and this income is hidden from taxes.
This means that although the talent is plenty, weeding through the non-compliant profiles will be a daunting task for HR teams.
But this does not mean that the gig economy does not have reliable talent.
Vendors that diligently submit their TINs and other business information for verification purposes are the only consistency enablers for the gig economy. Taking care of the freelancing business is a full-time job for verified vendors, making way for tax and business transparency.
Think about it. Would you rather hire a freelancer that does not provide any identifying information but promises a good deal? Or would you hire a verified freelancer that gives you the same, “good” deal?
The priority shifts towards verified profiles.
The Covid-19 Pandemic & The Rise Of Identity Fraud
The gig economy boomed during the global pandemic. Interestingly, this was also the time where businesses reported almost double the cases of identity fraud. Another interesting trend is that the pandemic was also the time where businesses started to invest in identity verification solutions to combat identity crimes and associated risks.
The dependency on the gig economy increased during the peak of the pandemic and regulatory compliance played a very important role to push identity verification solutions.
This shows us that while the gig economy was in a highly unstable condition before and during the covid-19 outbreak, the introduction of identity verification is giving the gig economy the consistency and the pacification it really needed. And the trends continue to march in this direction.
Experts weigh in that the gig economy will transform into a reliable source of untouched talent and innovation that businesses from other mainstream industries can leverage as years unfold.
The bottom line is that the gig economy is still transitioning and finding its way around identity verification and shredding its toxic past with identity fraud and tax-evading practices.
With little time, optimized identity validation solutions, and consistent regulatory practices, the gig economy will build on its potency and create an ecosystem of talent and innovation.
