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)