How to Attract Top Talent in the Gig Economy
Have you heard the term gig work? It’s a fancy way to describe contract or part-time jobs, like freelance graphic design or community lawn mowing. In 2017, gig workers comprised 34% of the U.S. workforce, a number expected to grow to 43% by 2020.
In the gig economy, workers have the freedom to work from home, set hours and pick clients. They don’t have access to company health care or retirement benefits. Plus, when you work for an employer, the business pays half your Social Security and Medicare taxes. On contract, workers are responsible for covering the full amount.
The benefits of gig work outweigh the drawbacks — a reason why many are skipping traditional employment routes. How is this new style of economy affecting employers?
Traditional Employment vs the Gig Economy
Many traditional employers rely on gig workers to keep operations steady, especially when understaffed. Nevertheless, there are risks when hiring autonomous talents.
The average worker is hired onto a team for the foreseeable future. It could be years or even decades. A freelancer, on the other hand, signs a contract with a set deadline — three, six or 12 months. Perhaps they do stellar work and you want to extend the deal but they have found another assignment.
To prevent unexpected gaps in your team, keep lines of communication open, even with freelancers. Provide them with feedback on their work and give notice if you wish to extend the contract or transition to full time.
Another risk employers face is classifying workers. If an employee is misclassified, the company can be fined for:
- Violation of wage laws;
- Unpaid income tax;
- Unemployment insurance.
Large corporations can avoid misclassification of independent contractors by recruiting talent through a third-party agency. If a worker is misclassified, the agency is held liable. However, not all businesses can afford this protective luxury.
Even large companies are at risk, though. Consider Uber and Lyft, for example. The ride-share programmes rely on drivers who are considered contract workers. Both companies have faced high-profile lawsuits where drivers claim they are employees and should get benefits. Uber recently lost its suit and was ordered to pay drivers $20 million in a settlement. However, it will not change workers’ statuses to employees.
Both large and small businesses should consult with a lawyer to understand classification standards and properly label gig employees. Research and due diligence can prevent most misclassification problems.
Attracting Top Talent in the Gig Economy
Businesses that rely on in-office workers — the ones who come in at set hours, interact with customers and clients, perform routine duties, etc. — may experience difficulty with recruitment. How do you compete with total flexibility?
1. Injury and Illness Coverage
As a traditional employee, what happens when you get hurt in the workplace? You go to the doctor and bills are covered by the company’s workers’ compensation policy. However, most gig workers are not provided with such policies.
Ask yourself the following questions:
- Does the worker choose their own hours?
- Can they turn down client requests?
- Do they buy their own materials/equipment?
If someone answers yes to the questions above, they are likely a gig worker not covered by workers’ compensation. However, you can provide alternative perks that retain gig workers while attracting new ones. A few options would be providing portable benefits or creative perks.
2. Easy, Reliable Pay
The traditional workplace provides a sense of reliability. Each day follows a set routine, complete with the end-of-week payday. However, gig workers face some hassle when it comes to getting paid. According to one survey, 45% of freelancers claim they do not get paid on time.
Gig workers don’t have much recourse if they don’t get paid, as labour laws don’t protect them. Instead, they must file in small claims court, an endeavour that costs time and money. If the company is in another state, it may also require travel. For most, the process is a hardship and the money deemed lost.
Traditional employees have avenues of recourse when left unpaid. A worker can file a complaint with the state’s DLSE (Division of Labor Standards Enforcement) to seek payment for unpaid wages, overtime, bounced paychecks and more. Most cases get resolved before moving into the hearing. In the event of a hearing, a decision is made within 15 days.
3. Flexible Work Opportunities
Bill Gates, the founder of Microsoft, advises employers to offer flex-work opportunities if they want to hire the best talent. According to one study, up to 90% of workers in the U.S. say they’d like to telework part time, with two to three days at home and the remainder in the office. Plus, 76% of millennials would take a pay cut in exchange for flexible office hours.
Companies that offer flex-work can recruit talent with remote work as a top priority. Flexible arrangements have been proven to boost employee morale, engagement, satisfaction and more. Employees with control over their work schedules tend to stay in a position longer, leading to improved retention rates and reduced training costs.
Today, 40% more companies offer flex-work opportunities than they did five years ago. As the demand for autonomy and work-life balance rises, employees will seek workers that provide this benefit. You can attract top talent and stay ahead of the competition by understanding what people want.
The Future of the Gig Economy
Hiring gig workers comes with certain risks, such as employee misclassification and the inability to extend contracts. However, prior research, expert consultation and open lines of communication can help you navigate any rocky waters.
As more workers seek flexible work opportunities, it’s essential to provide the right benefits to attract high-quality candidates. Offer security through flex-work, a comingling of remote and office work. With this style of employment, workers receive regular, reliable pay. Plus, in the event of injury, they are covered by workers’ compensation, something freelancers can’t rely on.
Many tout the gig economy due to the freedom it brings to their lives. Employers should consider both the pros and cons of gig work when crafting a strategy to attract top candidates.
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