According to the Mercer’s 2020 Global Talent Trend Report, at least 79% of executives predict that contract and freelance workers will replace full-time employees in the future. But a vast majority of organizations haven’t considered these issues in depth and still struggle to achieve harmony and a cohesive cultural identity within their current models. As the independent workforce and open talent models grows, businesses will need to rethink rewards and engagement tactics to include freelance or contract and full-time workers.
1. Are you thinking ahead about potential legal challenges?
More contract workers means employers are no longer paying for the costs of regular paychecks, benefits, and automatic withholding for taxes and retirement. This is a significant shift in worker and company relationships. While on-demand platforms navigate the regulatory and legal challenges regarding worker classification and rights (California’s controversial Assembly Bill 5 [AB-5] took effect January 1st, 2020), they also need to make strategic decisions to stay ahead of the learning curve.
2. Have you looked at engagement through the eyes of a contract worker?
Are your contractors included in your company’s engagement studies? In a time when the employee-employer relationship bond is weakening overall, measuring accurate employee engagement is critical. As the open talent workforce grows, companies would be wise to track all employee engagement (including contractors), to ensure they are building a robust and resilient workforce.
3. What about benefits?
Traditional benefits’ packages do not reflect the current balance of contract and full-time employees and they are no longer attractive enough to entice employees to work full-time. Upwork’s 2018 report on Freelancing in America suggests that a significant number of people are opting for freelance work by choice. This may seem like good news (companies might see significant reduction in benefits costs), but companies will still need strategies to keep their workforce engaged and happy, and to have access to the right talent at the right time.
