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Duolingo hit the headlines earlier this year after announcing it would drop 10% of its contracted workforce in a shift to focus on AI-generated translation.
Contingent workers, owing to the flexible and ‘on-demand’ nature of their employment, are often inherently vulnerable to large fluctuations in hiring and firing. Moreover, employers have tended to focus on full-time workers when designing rewards, benefits programs, and engagement strategies.
Joel Kammeyer, Director of Contingent Workforce, Epiq, argues contingent workers have historically been treated as a different ‘type’ of worker by most organizations, mainly due to the potential risk of co-employment. “As a result, contingent workers don’t typically get the same type of experience from a perspective of onboarding, training, benefits, performance management, offboarding and everything in between,” he explains.
Kammeyer also argues the inefficiencies in many organization’s processes to onboard a contingent worker lead to frustration, delays and typically having to rely on a staffing agency for their communication. “This impacts the relationship they can ultimately have with the organization and also impacts the employer’s brand to each candidate due to that experience,” he adds.
Some cases are even more concerning. Tesla is among the companies to have fallen foul of treating contingent workers with the due level of care, having been ordered to pay a former contractor $137 million in a discrimination case.
According to a memo shared by the automotive company, the jury for the case heard that the defendant “never worked for Tesla” and was instead an employee at staffing provider Citistaff. Insight from legal experts at the time argued that buyers – like Tesla – are equally as responsible as staffers for matters of harassment and discrimination, and the fact the worker wasn’t a Tesla employee did not defend their actions. Clearly, the jury agreed.
Whether it’s headline-grabbing harassment cases like this; the constant threat of job insecurity; or the fact most contingent workers don’t qualify for company benefits, contingent workers are in an inescapable position of vulnerability. Is this to be accepted as part and parcel of contract work? Or should HR do more to protect the interests of its contingent workforce?
HR can no longer ignore the contingent worker value proposition
Contingent workers now make up 35% of the U.S. workforce, a huge jump from 15% in a decade ago. The flexibility contingent workers offer is increasingly helping companies to fix skills gaps and fill roles in a competitive labor market. From the employee perspective, a glass-half-full view is that this is also driven by talent seeking out independent work and reaping the rewards of flexible careers. A glass-half-empty (or more realistic) view is that millions of Americans are forced into taking multiple jobs just to make ends meet.
HR can therefore no longer neglect the need to create a meaningful relationship with a group of employees that make up, on average, over a third of their companies. Here are three considerations to make:
1. Develop a clear contingent worker value proposition: Contingent workers need to understand how your organization is using or plans to use contingent workers, including classification amid changing legislation. “Leaders can protect the interests of contingent workers by putting in place consistent hiring, onboarding, training and offboarding practices for their entire workforce,” explains Kammeyer.
Clear communication on everything from rules of engagement to future growth or cuts brings certainty, empathy, and understanding to an otherwise volatile set of circumstances.
2. Expand employee benefits to include contingent workers: Contingent workers cannot participate in many typical benefits or rewards programs such as retirement plans. However, HR should not use this as an excuse to avoid rewarding contingent workers or taking advantage of tenure policies to reduce risk. “Rather than managing out of fear of the risks contingent workers can present, lead by example and do the right thing by treating all workers as equals,” agrees Kammeyer.
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“While tenure policies have long been seen to reduce co-employment risk, these should be used more so in ensuring managers are making good business decisions for what is short-term versus long-term work, which should also minimize the risk for potential litigation related to unfair treatment,” he adds.
Beyond tenure policies, Creative options such as L&D opportunities, access to co-working spaces, and rewarding contingent workers for outstanding contributions to the business are all good places to start. Consult with your legal team to understand what you can offer contingent workers without stepping into the territory of reclassification.
3. Create a culture of respect between contingent and full-time employees: Cases such as Tesla where a contingent worker claims they are not afforded the due level of respect or care as full-time employees highlight that contingent workers may often feel like second-class citizens.
HR and contingent workforce leaders must work to create a closer culture of respect, understanding, support, care, and partnership between full-time and contingent workers. “Not treating contingent workers as second-class workers and ensuring a positive overall experience for the worker, with opportunities to further their learning and their career,” Kammeyer says. This could be as simple as communicating with full-time workers about the contingent worker value proposition, or ensuring managers and leaders take cases of harassment just as seriously for contingent workers as they do for their own employees.
Given the scale of part-time, gig economy, and contractor work in America in 2024, employers must give their contingent workforce the same attention they afford to full-time employees. Failure to do so brings risks from costly lawsuits to disengaged, unproductive workers.
“The contingent workforce is becoming more and more a fabric of our overall workforce,” explains Kammeyer. “There is a desire from the worker to feel more connected to the work they are doing.” Moreover, greater transparency about business practices online and examples of cases such as Tesla create an imperative for each organization to provide a positive experience and control their brand reputation. “This will lead to worker attraction and retention, better company culture and, overall, a more productive workforce,” Kammeyer concludes.
How are you engaging your contingent workers in 2024? Let us know in the comments.
