The Alternative Workforce: It Isn’t So Alternative Any More

Over the last few years we’ve talked extensively about the alternative workforce; contract, contingent, gig, and crowd-sourced workers. Well, we now know that this workforce is bigger than you think.

First, only 42% of companies tell us they use primarily full-time employees. The others have a wide range of contractors, part-time employees, and gig workers of various types. If you go to any tech company in Silicon Valley, for example, you find “red badges” (or another card) identifying people who are not on the full-time payroll. These individuals may be service workers (cafeteria, cleaning), manufacturing, or even engineers.

Second, we also know that globally, more than 77 Million people are freelancers. (This is almost half the size of the total US workforce.) These people find work through their friends or gig sites like Upwork, Fiverr, 99Designs, Toptal, and hundreds of others.  Upwork, which is now a $250 Million public company, claims to be leveraging $1.8 billion of contingent projects and has more than 101,000 clients.

The company just announced a partnership with Microsoft to introduce the Microsoft 265 Freelance Toolkit, designed to help employers manage freelancers directly from their Microsoft IT tools. (Now there are rumors Upwork could be acquired by Microsoft.)

Third, as many as 40% of younger full-time workers also now work part-time. These “side-hustles,” as they’re called, are very common among younger people. Why?  Because they want the extra income and frankly it is now easy to do. Using websites like the ones listed above, full-time employees can do design work, social work, teach Yoga, or even start companies on the side. So some of the contractors you see at work might be full-time workers elsewhere. And with the cost of living continuing to rise, this trend is likely to continue.

In my conversations with HR departments, most are doing a good job hiring and paying these people, but few are sure how to manage everything else.

Should we have onboarding and online training (like Uber does)? Should we give them some types of benefits? (Employees are often embarrassed to be working alongside peers that have no vacation or retirement.) What kind of pre-hire assessment should we use? And how do we implement performance management and rewards programs for these people?  

Google, for example, has created an entire training program on how to “not provide perks” to alternative workers by accident.  It’s not a particularly flattering article, but if you read it you’ll see how important it is to take these policies seriously. I personally believe the policy of “not providing benefits” to contract or part-time workers is going to go away over time – these are real “workers” even if they aren’t classified as “employees.”

Well based on lots of input from our clients, we are embarking on a study to understand this area. Working with HRPS (the CHRO division of SHRM), we are embarking on a large study of this area.  We will highlight best-practices and give you lots of practical examples how to best manage this important part of your organization.

Please click here to join us, we look forward to publishing results in early 2019.