How to Attract and Retain Independent Workers in the Gig Economy
Here’s how contract work allows for greater flexibility within organizations.
Attracting and retaining independent workers in the gig economy is difficult. Bridget Quinn Kirchner, sr. director, client experience, WorkMarket – ADP, looks at the challenges for employers to consider (including the tight labor market, onboarding, paying workers on time, etc.).
Over the past two years, remote and hybrid work has solidified itself as part of the future of work, leading to remote workers having a lot more flexibility than ever before.
Because of this, independent workers- or contractors- are increasingly becoming an essential part of many businesses – sometimes to fill in gaps while recruiting for a full-time hire, other times for projects that require temporary experience or expertise. For both parties, contract work allows for greater flexibility. Flexibility on the company’s end to bring on extra help when business picks up without increasing their full-time headcount. And flexibility on the independent workers’ side to have a greater say in when they work and the organizations they work with.
No matter the reason, the use of independent workers – and the gig economy – is growing rapidly and is enabled by technologies designed to both source and manage a 1099 workforce.
Challenges to Consider
Like anything, the gig economy comes with challenges – particularly finding the right talent in today’s exceptionally tight labor market. With millions of open jobs and low unemployment, the search for top talent has never been so competitive. To find top talent, especially in the gig economy, leaders must ensure they are ready from day 1 to manage their independent contractors. This includes making sure to address any compliance needs. Issues could arise around employee location, classification, etc.
When you find your talent, the next challenge can often be onboarding. If this process isn’t streamlined and disparate manual systems are used, it can be extremely time-consuming for the organization and the worker. Leaders may see getting contractors up to speed quickly as a priority. But at the same time, those independent workers will want to be onboarded to the organization and the team/project they’re working on.
Once your contract worker has been onboarded, organizations need to ensure they are prepared to pay their workers promptly. The Challenge contract workers often face – is to wait for hours for their work to be submitted by their direct managers, then for the payments to be approved, and finally for their checks to arrive in the mail. Paying them in a timely and efficient manner, with flexible payment channels, can help make it clear that they are an integral part of the team whose work is of equal worth to their permanent coworkers.
Additionally, organizations can struggle with treating contractors differently than permanent team members, which can lead to frustration. Sources of friction often include incomplete onboarding or not being told about the company culture and vision.
See More: Gig Economy: Why Is It Growing and How To Leverage the Gig Workforce?
The Solutions
In order to better attract and retain independent workers, think about whether there is room for improvement in those areas above. Even modest investments in terms of time, engagement, and finances can serve you well in the short- and long term. Over time as your processes become smoother, your company will continue to evolve as an attractive option for independent workers.
Knowing where to start when ensuring your organization is ready for independent workers is always the first step- and for some, it might be the most difficult. Consider these questions when thinking about whether your organization has the right infrastructure to support utilizing independent workers in the way that you want to use them:
- Do you have the technology in place to support contractors in the same way you support your W2 workers? This includes onboarding, hardware, software, and communications channels.
- Can you pay your independent workers how you want to or how they want to be paid? Are modern, fast, and flexible payment methods being used to reduce the time it takes independent workers to get paid?
- What internal systems do you have to track your independent workforce to know you’re compliant? Depending on the state or locality, several guidelines must be adhered to when classifying a worker as an independent contractor.
- Can you manage a large number of independent workers at once? How many workers do you foresee having on the team at the same time? How many would you expect to onboard simultaneously?
When considering these questions, there are several factors to take into account. Firstly, compliance. It is critical that compliance obligations are met by classifying workers as employees or contractors. One way that can help you do this more easily is by having an efficient onboarding process. Not only will this help with worker classification, but it also allows for a singular process to garner all the information you need simultaneously. That onboarding process can also be key in training specific processes, internal systems, and important organizational values and goals. Lastly, strive to meet your independent contractors’ needs by providing a clear scope of work, including expected deliverables, payment terms, and so on.
Next, offering fast and flexible payment options is another way to help attract and retain independent workers. Today, many contractors expect real-time payments via ACH or similar, expecting to be paid quickly. These quick payments are good for your contractor and your organization’s reputation with 1099 workers. These payment systems can help make your organization a much more appealing prospect for new and existing contractors since they know payments will be quick and efficient.
Developing your employer brand through efficient onboarding and timely payment systems, and other means can also give 1099 workers something more to align with so that they can represent your values more effectively; plus they will feel like a valued part of the team. Creating a way for your 1099 workers to succeed in the short term will set up your organization for long-term success. As more and more workers join the gig economy, it is vital to develop and implement a workforce strategy tailored for independent workers – one that allows you to scale and grow while staying nimble.
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