Employers face a dilemma when it comes to a future in which a workforce of independent, contract on-demand workers becomes the norm and not the exception, according to a major survey of employers conducted by Time magazine, the Aspen Institute, the Markle Foundation and Burson-Marsteller.

This pair of findings demonstrates the dilemma:

56% | Percentage of employers who say full-time employees make it easier to accommodate the ebbs and flows in work volume and who believe that contract workers are less loyal or invested in the success of the company.

60% | Employers who hire contract workers.

As explored in the SmallBusiness.com Guide to the On-Demand Economy, for reasons of choice, possibility or necessity, a growing number of individuals are becoming part of the on-demand economy; adapting to a form of freelancing that once was limited to certain trades or seasonal work. Many on-demand workers view their participation as part-time work, or as a flexible second job. Other people, however, are reluctant participants in the on-demand economy and prefer full-time employment.

(Note: In this article, the term “contingent” or “independent workers” refers to those who work for an organization on a non-permanent basis and handle their federal tax payments using a form 1099. Contract or non-employee contingent workers are also known as freelancers, independent contractors, or temporary contract workers. Full-time employees include workers, part time or full time, who are issued a Form W2. Learn more about the difference between  in this article that is a part of the SmallBusiness.com WIKI)

Why employers use independent workers

90% | Flexibility of hiring workers with specific skills as the need arises
86% | Cost-saving purposes such as taxes and benefits

When given the choice, employers prefer full-time workers

58% | Employers who say full-time hires are better for their company because they provide more value over the long-term
67% | Employers who say their companies try to limit the number of contingent workers in favor of full-time employees

Employers expect the on-demand economy will grow

57% | Employers who use contingent workers who expect to use more in the future
70% | Percent of all employers (who’ve used contingent workers or not) who believe more organizations will move toward an on-demand labor model

Employers are satisfied with the performance of contingent workers

97% | Employers who use independent contractors who say they are satisfied with their performance
98% |  Employers who use independent contractors who say they will use more independent contractors

Employers are looking for loyal, engaged employees but believe independent contractors don’t meet that expectation

58% | Employers who hire independent contractors who believe “non-employee contingent workers are not as loyal as full-time employee.”
54% | Employers who believe that non-employee contingent workers are “not always available when I need them,”
52 % | Employers who think contingent workers are “not as invested in their product.”

Benefits offered to full-time workers vs. independent contractors

79% | Employers who believe offering benefits to employees is a critical component of attracting talent
66% | Employers who feel they should NOT be responsible for providing benefits to independent contractors

50% |  Employers who don’t think they should be responsible for providing training or education to independent contractors.
22% | Employers who believe workers themselves should be responsible for providing benefits

80% |
Employers who hire independent contractors offering healthcare benefits to full-time employees
17 % | Employers who offer healthcare benefits to independent contractors

80% |
Employers who offer paid vacation to full-time employees
13% | Employers who  offer paid vacation to independent contractors

(HT to Steve King, Small Business Labs)

Photo: ThinkStock


Related Articles

The On-Demand Economy Workforce Continues to Expand | 2017

Two-thirds of on-demand economy participants say they are satisfied with their work

HomeAdvisor Buys Angie’s List to Grow its Home Services On-Demand Marketplace

To compete with the giants creating new, on-demand home services marketplaces, HomeAdvisor acquires Angie’s List.

Gallup: Most Employees Who Work Varying Hours Like Their Schedules | 2017

According to Gallup, the majority of employees who work variable hours each week report no problems or financial hardship with the variable hours.

Two Small Business Trends That Contributed to Ikea’s Decision to Buy TaskRabbit | 2017

Are the acquisitions of TaskRabbit and Angie’s List pointing to the consolidation of the gig economy?

How the On-Demand Economy is Changing Insurance Coverage | 2018

The rise of the on-demand (or “gig”) economy is creating new opportunities for creative insurance brokers.

Taskrabbit, IKEA’s Gig-Economy Home Service Marketplace, Gets Hit By Hackers

The on-demand home-service platform acquired last October by Ikea, announced that it has taken down its site and app in order to investigate a cybersecurity incident.

Why the Bureau of Labor Statistics Estimate of Gig Economy Workers Does’t Add Up

The BLS research excludes millions of people who do gig work as moonlighters or as a second job.

‘Last Mile’ On-Demand Delivery Battle Continues to Heat Up | 2018

The need for on-demand grocery delivery services heats up the battle for drivers and new models of work.

Freelancer Marketplace Upwork’s IPO is Another Thumbs-up for On-Demand Economy

Upwork’s initial market capitalization was nearly $1.6 billion.

Food Delivery Services Continue to Expand, Raise Funds

The growth of delivery services will mean more opportunities for small and local food stores and restaurants.

IRS Advice for Gig Economy Small Businesses | 2020

IRS provided advice for participants in the gig economy.

On-Demand (Gig) Economy Tips & Advice From the IRS (2020)

Gig economy income is taxable no matter what the source. This is true if the work is full-time, part-time or if an individual is paid in cash.