How to retain freelancers and gig workers

Alternative workers are looking elsewhere for work, but are critical for many companies. Here's how to keep them around.

Alternative workers are crucial for companies to maintain a competitive edge, picking up slack during high-demand seasons and helping to execute strategic projects. 

However, many alternative workers are unhappy, resulting in more than half (66%) of those dissatisfied to look elsewhere for jobs, a Ceridian report found. 

SEE: The gig economy: An insider's guide (free PDF) (TechRepublic)

Ceridian's 2020 Pulse of Talent report, released on Wednesday, explores the state of the alternative workforce. The majority of alternative workers (79%) said they are satisfied with their current roles, but this can quickly change, leaving organizations relying on that talent in a bind. 

"The alternative worker is somebody who works independently for one or more companies. They are generally either a freelancer or consultant to multiple clients," said Ted Malley, chief customer officer for Ceridian. 

"They could also be a contract worker that contracts with one or more companies, or they could be more of a blue collar person who is doing multiple gig jobs in the service industry, whether it's your Uber driver, cafe runner, Door Dash person, etc.," Malley said.

More than 40% of US employees work on a contingent basis, according to Deloitte's 2019 Human Capital Trends report, indicating the rising popularity of this working style

The perks of alternative work

Alternative workers are ultimately satisfied with their roles, mainly because they find the work interesting (57%), enjoy flexible hours or working remotely (40%), or have good relationships with colleagues (40%), the report found. 

When asked why they choose gig/freelance/contract, these workers primarily said they like the flexibility (50%), but they also enjoy the independence (41%) and money (32%). These perks are why 57% of respondents said they plan to continue with alternative work in the future. 

For individuals hoping to really see success in the gig economy, experience is crucial, which is why so many alternative workers want to stay at their assignments. However, 21% said they are unhappy, hoping to find success elsewhere, according to the report. 

Challenges for gig workers 

Of those who said they were dissatisfied with their current gigs, 75% cited bad pay as the main reason. Other contributing factors included uninteresting assignments (51%), poor benefits (50%), and lack of job security (32%), the report found. 

The media has shown that some companies don't treat contractors as well as salary-based employees. Because of this, 72% of those dissatisfied with gig work said they don't feel like their assigning company cares about them, and 61% said they don't feel like they are paid adequately. 

The majority of gig workers across all age groups are also worried about having adequate work in the next two years, given how volatile the job market can be, according to the report. 

Alternative workers cited their biggest overall challenges as income instability (45%), inconsistent work hours (36%), and lack of benefits (32%).

These challenges raise questions on how alternative workers should be treated. Companies are not obligated to provide contractors the same benefits as regular employees, but many gig workers still do the exact same functions as those with full benefits. 

California recently passed a law that makes it harder for companies to classify workers as independent contractors rather than employees. While the intent is to help the treatment of freelancers, this makes it more difficult for those wanting to stay in the gig economy to find work, the report found. 

More than half (56%) of alternative workers believe they should be able to unionize, allowing them to advocate for themselves. Respondents said unionizing would allow them to negotiate higher wages (69%), negotiate better benefits (59%), and ensure greater equality (55%). 

This motivation for action comes from the overwhelming negative impact job dissatisfaction has on gig workers' mental health. 

With the uncertainty and financial instability associated with gig work, more than 75% of alternative employees across age groups said their mental health has been negatively affected, according to the report.

How to engage and retain gig workers

Many organizations turn to gig work as a more affordable option for getting necessary talent, or use alternative workers for specialized projects and skills, Malley said. Keeping this talent is more important than ever, especially if alternative workers are looking to leave their jobs. 

"Alternative workers will represent more than 50% of the US working population in seven short years," Malley said. "That's a massive shift; this will be the new normal. 

"As an employer, we need to be thinking about how we treat [our] alternative workforce, which will be the new normal coming up as first-class citizens, as if they were employees," Malley added. 

1. Pay on time
One of the easiest ways to show freelancers and gig workers they are valued is to pay them on time, in full, every time, according to the report. New York's Freelancers Union found that 44% of their members reported having issues getting paid, averaging $10,000 in unpaid invoices. 

Paying employees accurately and in a timely manner helps build trust and give them a sense of security, the report found. 

2. Support financial wellness

Building on the first point, the report suggested companies also adopt technological tools that allow workers access to wages more often. Unexpected expenses come up, and alternative workers can find themselves in a pinch. Paying them in the middle of a pay period or at the end of a shift can help alleviate that stress, according to the report. 

3. Look past the transaction

Deloitte's 2018 Human Capital Trends survey found that 46% of HR respondents said they aren't involved in the onboarding of alternative workers. To retain these employees, leaders should treat gig workers the same as regular employees, involving themselves in their professional journeys, according to the Ceridian report. 

Contract employees don't have to stay on contract. Companies should look at all alternative workers as prospective full-time workers and treat them as such, the report found. 

For more, check out Deloitte: The alternative workforce moves into the mainstream on TechRepublic.

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