Employee Benefits in the Gig Economy
How do you reward and incentivise temporary or seasonal staff without alienating your permanent or long-term employees?
The trend toward a gig economy has begun. Temporary positions are becoming increasingly common and organizations are contracting with independent workers for short-term engagements far more often. A recent study has predicted that by 2020, 40 percent of workers will be independent contractors. This change in contract type is due to a number of factors but the most crucial is the increase of remote workers. Employers are now able to choose from a wider pool of freelancers, anywhere in the world, and still receive the same results.
One key issue for those moving from salaried work to freelance work is setting a day rate. If you have a target annual income of £21,000, then it might be tempting to set your day rate at £21,000 divided by 240 (the average working days a year). However, nowadays it is important to take into account the monetary value of employee benefits – something that employees often overlook. Research shows that 96% of employees underestimate the amount their employer spends on their benefits – with four in 10 (42%) believing it is around 5% of their salary or less. However, it is typically between 20 and 40% of an employee’s yearly salary.
The traditional contractor model goes something like this: they do a specific job and you pay them for it. But there’s a strong argument to offer freelancers more than just money and present them with the same, or more, benefits that you would provide permanent members of staff.
It is important to get a clear picture of the temporary employee, as we may imagine that the typical gig worker is not in it for the support and protection an employer can offer and therefore assume they don't engage with, or really, want benefits. However, it is equally true that short term workers may be the lowest earning and most vulnerable employees and are in need of extra reassurance and protection.
Sure, you know they may not be around for long given the nature of their contract. But you can still give them opportunities to learn and grow whilst they are there.
Why not offer a learning and development programme to your benefits offering for short term staff? The process of learning itself promotes wellbeing and self-esteem which in turn can result in staff feeling more enthusiastic about their job. As engaged workers are more productive workers, encouraging learning has the added benefit of boosting productivity and reducing staff turnover, even amongst short term employees.
So, it is crucial to find out what motivates your freelancers or where they’re perhaps lacking in confidence and help them improve where necessary. Perhaps send out targeted pulse surveys to gather information about the issues that are really affecting your part time staff. As they may be learning less money and feel less financially secure, it is important to offer a good programme of financial wellbeing benefits.
Personal Group have included an employee mapping service in Hapi, our employee engagement platform, which allows employers to target certain staff members with push notifications. Employers are able to target using department, location and contract type, making it far easier to send personalised surveys to short term employees.
This service can also be utilised to offer a personalised selection of benefits to employees based on their needs, such as a larger financial benefits package to short term employees, and pension details to permanent staff.
It might seem like a small gesture, but to that individual you could be the rare company that treats that worker like a highly valued member of the team which may work in your favour if you are ever looking for contractors in the future. Without paying competitive rates and giving people the opportunity to do great work, you’re never going to attract the best contract talent.
If you can start to change the way you view freelance workers and treat them with the same care and attention as your permanent staff, you will be leagues ahead of the majority of companies out there. As the freelance economy booms, the competitive edge that employee benefits bring to your organisation could be your ticket to attracting the very best talent in the business, who can transform your company and elevate it to the next level.