Traditional work structures are failing and a lot of us in the future of workspace are supporting new systems—like digital platforms that connect companies to a global workforce and connect workers to better contract assignments. This is all great news. But it’s also changed everything, including employment access to the perks that traditionally come with more classic structures, like a salaried job with benefits.
What will the employer-freelancer relationship look like with this new model? As the number of independent workers increases, fewer employers are fulfilling fiduciary responsibility like the regularity of a paycheck, benefits and automatic withholding for taxes and retirement.
Open Assembly wanted to take a closer look at this trend, so we recently sat down with Carl Camden and Hollie Heikkinen to explore the top issues affecting the rights and roles of independent workers. Camden is the Founder and President of the Association of Independent Workers, also known as, iPSE -US, and the former CEO of Kelly Services. Heikkinen is the CEO and Founder of iWorker Innovation.
“People don’t realize that Henry Ford truly institutionalized and created the concept of jobs and regular hours and benefits and security tied to the job,” says Camden. “And for 75 years, this country has tremendously thrived on the concept of ‘job.’” The policies and systems that defined the rights and roles of workers and employers in the 20th century aren’t so relevant anymore, now that digitization has transformed access and work models, says Camden. “There’s a lot of support and basic foundational things that we have embedded in our society and in the concept of ‘job’ without having paid attention to what the equivalence will be for an independent workforce,” he says
Organizations like iPSE.US and iWorker Innovation are building and supporting new systems that fit the needs of independent workers. They do this through policy advocacy work and by supporting freelancers with a membership model that is “almost like the HR department, but for independent workers,” says Heikkinen. Identifying the challenges is the first step toward transformative change. Here are three key issues affecting independent workers today:
1. Lack of health care and other insurance benefits
Independent workers are responsible for purchasing their own medical, dental, vision, life, and accident insurance. Additionally, they typically do not qualify for supplemental benefits offered by larger companies like elder care, childcare, and transportation. This isn’t just a problem for workers. It’s a problem for the whole system, say Camden and Heikkinen. A shift toward more freelancers may decrease business costs in the short term but it creates a ballooning problem for the government whose responsibility it is to ensure that everyone gets access to quality health care.
2. No systems in place to save for retirement
A similar argument can be made for access to retirement planning and 401K benefits. Luckily financial companies are “starting to pay attention to these inequalities,” says Heikkinen.
Heikkinen is working with Prudential to build a retirement planning product specifically for the independent worker. “Independent workers will be able to start this retirement plan for only a hundred dollars,” she says. “And then they can contribute as they need, with the support of connectivity that helps them know they’re doing it right.”
3. Company culture doesn’t treat freelancers as equal contributors
Many companies aren’t sure how to treat freelancers, says Camden. Some companies make independent workers wear different color badges, don’t let them eat in the employee cafeteria, or exclude them from employee parking options during bad weather.
To understand the issues, and to help organizations understand how to work well with independent workers, companies need a consistent feedback loop that includes freelancers, says Camden. “I don’t blame the CEOs or the boards for the treatment of freelancers—or for not getting all the productivity they should—because they’re not getting any data,” he says. “A lot of time is spent measuring employee engagement, which only represents 40 to 60 percent of the workforce, says Camden. Freelancers aren’t usually represented in those studies.
“It’s important that we recognize that they are a significant, major critical part of our talent. And so the question for leadership is how do we change the core culture management philosophy and training to embrace these individuals rather than treat them as the ‘other’?” says Camden.
Overcoming the barriers
Finding solutions will require awareness, advocacy, and a willingness to address the issues. “Right now, the U.S. department of labor isn’t looking out for independent workers, holding employers accountable for payment on services, for example, or adequately addressing fair employment classification structures,” says Camden. Periodically there’s an effort to reclassify independent workers as employees and move them back to old employment structures, such as California’s AB5, but “the government has been very slow to figure out how to advance regulations and protections to independent workers,” Camden says. “As business leaders, these are the challenges that we need to start really taking a look at, not only for the success of our own companies but for the success of this country.”