In the Midst of the Gig Economy, How Can Your Business Attract Contingent Workers?

April 4, 2019
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Category: Compliance, Culture, Talent

in the gig economy, how do you recruit contingent workers?

There are almost 6 million contingent workers in the US, according to the Bureau of Labor Statistics. These include a variety among the workforce: temporary workers, freelancers, independent contractors and more.

Gig workers help small businesses get through large projects or peak times, or become a long-term part of the team. Attracting contingent workers seems easy: everyone wants to work remotely these days. But finding the talent you need requires a bit of work and planning to assure the best fit for the worker and the company.

Small businesses often use remote workers for projects, but they can also be a great help for technical, clerical and administrative functions. A website fix or periodic assistance can be a contractor’s specialty.  If you don’t have an HR Department, but occasionally need advice or new job descriptions, a contractor can fill the bill.

Many types of contingent workers

The most commonly used contingent workers come from temporary agencies. Staffing agencies fill over 15 million slots per year. About 3 million workers per week have been placed through a staffing agency, the majority of whom work full-time.

Agencies cover all sectors of the workforce: about one-fifth of temps say they like the scheduling flexibility agencies afford them. Business pays a fee on top of the employee’s hourly rate to hire these workers. For many temps, their agency offers them access to benefits, like healthcare coverage, which can help attract a more skilled workforce for placements.

Freelancer platforms offer a contingent workforce that’s on the rise. These sites allow business to hire for a specific project or for ongoing work that doesn’t justify a full or even part-time role. Workers are paid through the site, and typically pay a flat fee or percentage of their earnings to stay on the job.

Another contingent workforce is the contractor or independent contractor. These work directly for a company, either as needed, on call, or for specific projects. The work they perform can be remote or in-house and the run the gamut of skill sets. Contingent workers aren’t just ride share contractors. They can be entry-level workers through highly skilled scientific, technical and executive staff.

Finding contingent workers

The majority of contingent workers, 65%, who weren’t placed by a staffing agency report they found their opportunity through professional and social networks. Job boards that cater to gig workers accounted for 32% of placements and 26% found their job from a company career site.

For businesses looking to attract contingent workers, professional and social media sites can be the most promising avenues. Posting your position should include the keyword “remote” if you can allow a worker to do the job from home. The largest job boards and career sites now allow workers to search for gig jobs using that keyword.

Word of mouth is a great way to attract contingents. Your own employees likely know someone who is looking for work or for a bit of side-hustle. They are your best brand ambassadors: they can boast the benefits of working for the company and sell the candidate before they even apply. Your employee referral plan should include looking for contingents as well as in-house staffers.  

Attracting contingent workers

Apart from working remotely or having a flexible schedule, what can you offer a contingent worker to make them beat a path to your door? When it comes to wages, the amount of money you may save on benefits and taxes can afford you a way to pay a higher rate to a more qualified independent contractor. But money isn’t the only lure for this growing gig workforce.

The majority of contingent workers want to be a one of the team, even from thousands of miles away.

For some contingent workers, being on their own is part of the lure. But the majority want to be a one of the team, even from thousands of miles away. When posting and hiring for contingent staff, make sure to include them as part of the company. Proactively include them in group meetings via conferencing tools to make sure they’re up to speed and feel involved.

You can also utilize software specifically created for contingent workers to include them in the company’s org chart and help them become more accessible to your employees. And it’s not just for their benefit: siloed employees miss out on relationships, yes, but they also miss opportunities to collaborate and innovate.

Can you offer an opportunity to develop? For many, contingent work is a way to boost their skill set. A recent study put about half of these workers citing learning new skills was very important to them.

Contingent workers are looking for many of the same characteristics in a company all workers want: a strong culture, career growth and cutting-edge tech to get the job done. In a recent study, 40% wanted a role that allowed them to have an impact on the organization.  When posting and interviewing this workforce, promote their value to the team, and every opportunity for career and personal growth no matter how large or small your business may be.

Risks of misclassifying contingent workers

Some independent contracts are paid with a 1099: they are responsible to pay their own taxes. The US Department of Labor has strict guidelines for independent contractors and business will need to carefully assign the designation under the law. In general, independent contractors have three types of control over their work and workday: behavioral; financial and relationship. All these factors determine whether or not a worker can be gig workers.

Behavioral

If the company has the right to direct the behavior of the worker, when and where they work; what tools they use; how they are supervised and evaluated, they may not considered independent contractors.

Financial

If the worker is exclusive to the company and has no financial control over their work, they may not be an independent contractor under the law. If they work for or are able to provide their services to more than one business (like offering HR assistance)  they likely are contractors. If they are paid a flat fee for the work (like fixing a website glitch) they can be considered contractors.

Relationship

The status of the relationship is also a determining factor. Is there a contract that outlines the work and duration of the project? Undefined work or duration typically signals a regular employee-employer relationship that would not be considered independent.

Business looking to structure a 1099/independent contractor relationship should consult a professional advisor before the first paycheck is issued. Misclassifying a worker as an independent contractor can result in businesses being required to pay back taxes, penalties, and fees. One estimate put employers at risk for over 40% of the employee’s wages when there is a misclassification.

For businesses looking at a contingent workforce, the possibilities are endless. They can provide help during peak times, offer specific expertise or even give employers a chance to assess workers with on-the-job training for a potential permanent job. The first steps in hiring gig workers are determining what you need and what you have to offer this growing demographic.

About

Riia O’Donnell is a Human Resource professional with over 15 years of hands-on experience in every discipline of the field. A subject matter expert, she has written for the online HR market for over 8 years. Her first job, at age 15, was working the early morning shift at a local bakery on weekends.

Category: Compliance, Culture, Talent


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