Business The Future of Work

The Gig Economy is Here to Stay. Employers, Get Ready.

Today, nearly 45 million Americans work in the gig economy – either as full-time independent contractors, freelancers, or “side-hustlers” – and that number will grow. In September, California passed a bill that effectively changes the way gig workers are classified, entitling them to minimum wage, workers’ compensation, and benefits. Many people expect the new law will have a major impact across the gig economy.

As protections continue to emerge, the 67 percent of full-time employees who are interested in gig work as instead of their current jobs could dramatically increase, according to recent findings from the gig economy report based on MetLife’s 17th annual U.S. Employee Benefit Trends Study. Soon, employers will find themselves faced with a two-pronged struggle: how can they keep current employees from defecting to the gig economy? And, how can they attract new talent to join their teams? 

To stay competitive in today’s war for talent, employers must focus on boosting their “curb appeal” to attract new workers while also modernizing internal culture to keep current employees from answering the gig economy’s siren call. 

Here are three critical steps that can help companies accomplish this:

1. Dispel misconceptions about gig work and gig workers

Today’s gig economy is radically different from the traditional freelance and contractor worlds. Historically, the power balance favored employers, with gig workers depending on them for financial security. The gig talent pool was also smaller, and employers were less likely to seek out freelancers if they had talented and reliable employees in-house. Today, talent is flooding into the gig economy, meaning employers must actively court gig workers, even for small or short-term projects. Today’s gig workers also have more tech-driven tools and resources available to them than ever before – meaning it’s increasingly easier for them to find their next job. In fact, 77 percent of gig workers find enough consistent work to be considered employed full time. These trends denote a power shift from employer to gig worker – and companies need to remain cognizant of this.

There are also misconceptions about who gig workers are. It’s not just young, single millennials hoping to travel the world while making money in their spare time. MetLife’s recent report on the gig economy found gig workers run the gamut when it comes to age, gender, marital/family status, and education. For example, baby boomers make up a quarter of all gig workers, 62 percent of gig workers have a bachelor’s degree or higher, and 47 percent have children under age 18. Employers need to understand that any of their workers could join the gig economy at any time. So,  incentives for full-time employees must also satisfy the full spectrum of workers’ needs.

2. Understand why workers leave companies to freelance full-time

Employers, take note: Your full-time workforce may be unhappy. Sixty-seven percent of full-time employees are interested in pursuing gig work over their current jobs.  To develop an internal culture and incentives that attract new talent and keep current employees happy, employers must understand why the gig economy is so appealing. MetLife’s research found that the gig economy’s appeal focuses largely on flexibility. Three in four gig workers say being an independent worker gives them the flexibility needed to manage  work and life, as well as support their families and save for the future. Nearly a quarter  say they choose gig work because it allows them to pursue their passions. So, employers must do their best to meet rising standards of flexibility and autonomy if they want to attract and retain top talent.

3. Strategize how to retain and attract talent

The first instinct many employers have when it comes to attracting and retaining talent is to bulk up salaries and offer promotions – appeasing current employees with a pay bump and courting gig workers into full-time contracts with a hefty and reliable source of income. But in reality, only about 50 percent of workers – full-time or gig – say that higher salaries alone would keep them from pursuing gig work, and only about 20 percent could be swayed with a promotion.

Employers must think broadly: 49 percent of gig workers say that not being able to work remotely is the reason they left full-time positions. It’s critical that employers prioritize this if they want to keep a competitive edge. The same goes for well-rounded benefits packages. Better benefits could entice 43 percent of gig workers to accept full-time offers, MetLife’s study found, and 29 percent of full-time workers who intend to leave their jobs for gig work in the next five years say better benefits may make them stay. To design the benefits packages that appeal to a broad range of talent – and meet the needs of the employer – companies should consider offering a mix of traditional benefits (i.e., medical and dental) and nontraditional, which are increasingly more common, such as free and healthy lunch, gym reimbursements and on-site flu shot clinics.  

Ultimately, to keep pace with the gig economy, companies must stay attuned to the changing needs of their employees – constantly evolving cultures and benefits packages that allow employees to not only achieve work-life balance, but also enjoy and progress in their careers.

Leave a Reply

Your email address will not be published. Required fields are marked *