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Full-Time Benefits for Contingent Workers: The New Norm?

Thursday, May 30, 2019

Today’s workers tend to favor less traditional roles. A report from Upwork found that some 57.3 million Americans, or 36% of the workforce are now freelancing. Soon enough, contractors and freelancers could make up half of the American workforce. In fact, they already do at Google, with 54% of their global workforce represented by contingent workers.

Younger generations, such as millennials and Gen Z, have the most interest in contingent positions; the U.S. Department of Labor reported that in 2017, contingent workers were more than twice as likely as non-contingent workers to be under the age of 25. Deloitte’s research shows 62% of millennials view the gig economy as a viable alternative to full-time employment, and only 13% of Gen Zers rejected the idea outright. Seven in 10 millennials who are members of senior management teams or on boards would consider taking on short-term contracts or freelance work as a full-time alternative.

The short: the contingent labor market is only going to grow as baby boomers retire and millennials and Gen Z rise in the ranks; organizations need to start paying closer attention and address the needs of this growing and soon to be dominant population of workers, if they aren’t already. The biggest opportunity to reach today’s generation of contingent workers: complementing flexibility with full benefits packages.

Fairness in flexibility: The lines between full-time and contingent are blurring.

Employees across the board want more control over when and how they work. This flexibility trend has grown dramatically over the past year as remote work and other alternative work arrangements have become more popular. Full-time employees increasingly want to flex their hours, work from home, and take part in project-based work, giving them the ability to design their own careers on their own time, like the job structure of freelance workers.

On the other hand, contingent workers increasingly want the security that full-time employees currently enjoy. They are asking for more certainty, benefits, and worker rights.  Full-time workers are on board with these demands knowing that they too may be contingent workers in the future. In fact, according to USA Today, 74% of millennials are interested in freelancing, and 40% plan to abandon their job to freelance in the next five years. The support from full-time workers is apparent at SurveyMonkey, where an employee survey revealed that staff were satisfied with their own benefits packages, but wondered if they could be extended to contractors as well.

Organizations need to deal with these new dynamics and get more creative in bridging the gap between full-time and contingent workers through a universal approach to human resources and talent sourcing. This means not only removing barriers between full, part-time, and contractual roles in the hiring process, but also in talent management, i.e. treating the community of workers as holistically by offering similar benefits, no matter the job classification.

Workers asked, brands are starting to answer.

Recent shifts by big brands show companies are listening – and delivering on this fairness in flexibility concept. SurveyMonkey began offering its contingent workers full benefit packages last year to those working at its San Mateo headquarters. The benefits include medical, dental, and vision insurance, paid time off, and transportation subsidies. Since SurveyMonkey made this announcement, it seems that other companies have followed suit – especially in the tech industry where many organizations rely heavily on part time and gig workers to fill roles which require highly specialized skillsets. Ride sharing company Uber and the on-demand food delivery service Caviar are among the organizations that have begun to roll our more robust and traditional benefits packages to its contracted workers.

Organizations are increasingly embracing the contingent workforce, recognizing this strategy as a smart way to expand the talent pool and alleviate the pressures that come with a tight labor market. The challenge for some employers is attracting, retaining, and engaging these workers once they find them – which is best solved by understanding what motivates those in contractual roles and delivering benefits and other perks that make them feel valued.

Hiring and managing contingent labor comes with considerably more employment regulations and contract considerations – and blurred lines in benefits packages add to the complexity. When HR teams work with procurement departments and tap into their negotiation skills, regulatory compliance knowledge, contract expertise, and more, delivering on the “fairness in flexibility” concept becomes much more manageable.

As contingent labor and flexible work arrangements become even more mainstream, organizations need to start prioritizing how these workers are treated. SurveyMonkey and other tech companies have started to realize this, but it’s only the beginning. It will be interesting to see how workforce management strategies continue to shift as we make way for a new generation of workers who are transforming what a “traditional” role looks like. One thing we know for sure is it will be critical to partner with workforce management experts to ensure compliance, as well as leverage third party payroll solutions to minimize organizational risk as the blurring of lines continues.

For more insight on this topic, read our blog post: Creating Corporate Advantage Through Human Resources.

Fatime Doczi is Chief Human Resources Officer for Workforce Logiq. She is responsible for preserving the organization’s culture of positive engagement, driving a culture of continuous improvement and operational excellence strengthening the HR function’s alignment to business strategy. As a key member of the executive team, she provides strategic leadership and direction in the areas of organizational effectiveness, succession planning, performance management, talent acquisition, total rewards, and dive

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