Leveraging Gig Workers in the Midst of Increased Regulations

178601726One of the biggest trends affecting the talent landscape in 2016 will be the continuing rise of the gig workforce. With more independent contractors and freelancers eager to step in and fill key gaps, companies can access talent on demand, without the costs and resources typically associated with hiring full-time employees. The benefits of such workers expand beyond employers, helping economies around the world to grow. Just consider recent data showing that online gig talent platforms could add as much as $2.7 trillion to the global GDP by 2025, and add 72 million full-time equivalent positions.

As more workers seek freelance opportunities to take control of their careers, and employers increasingly adopt new work models to find needed talent, it is clear that the gig economy will be the way of the future. But policy can be slow to keep up with the latest labor trends, and the rapid pace of change makes freelance work difficult to regulate. Government entities around the world are taking a closer look at how the gig economy impacts the traditional workforce and independent workers themselves, particularly around compliance and the lack of job-related benefits.

The heart of the debate focuses on the technology platforms used to connect employers with independent workers. Such platforms enable companies to source agile labor at a moment’s notice, while enabling talent to access employers they couldn’t otherwise reach. Through this model, worker participants are treated as independent contractors who are exempt from tax withholdings or benefits. Some government authorities counter that workers should be given employee status, due to the way they perform their jobs and are managed.

At the other end, there is a growing presence of freelance unions established to support freelancers, offering health insurance plans and other benefits they would typically receive through full-time employment. Meanwhile, others suggest the need for a new classification of worker beyond the traditional employee or non-employee distinctions — one that would allow for protection against mistreatment, while enabling them to still enjoy the freedoms associated with independent work.

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As the issue continues to take shape, governments and courts have handed down a number of decisions regarding the freelance economy and the distinction between independent contractors and freelancers. And there are many other cases moving forward in the U.S. and around the world with outcomes yet to be determined.

While there is some uncertainty around the future of the gig economy, there is much you can do to engage with freelance workers today, while remaining compliant with current regulations. Consider the following five tips to help build an effective strategy around gig talent:

  • Speed is key: Identify areas of your business that can benefit the most from rapid deployment of skills, and help hiring managers engage with the tools and platforms that can facilitate how you connect with talent.
  • Allow cost to be a driver: Today’s online talent platforms allow workers to compete for projects, creating a cost-effective way to connect with qualified workers.
  • Choose the right platform: Key to success in the gig economy is to adopt the right platforms to meet your specific needs. Current platforms offer access to freelancers with a wide variety of skills, while some also provide the technology to help find, engage manage and pay freelancers. There are also niche sites that specialize in certain kinds of talent, such as legal resources, for example.
  • Perform due diligence: Exercise caution when selecting your services to make sure your choice is compliant with all applicable regulations and internal standards.
  • Plan for complexity: The steps involved in adding independent contractors to your workforce may require significant process updates. Make sure you can address factors like how to submit payments and allocate costs and track deliverables and milestones.

Although the gig economy will continue to be a lightning rod for compliance concerns, the value of leveraging freelance talent to meet pressing organizational goals and fill key gaps is clear. As more services are introduced and new models come to market, they will present both opportunities and complexities to employers. Staying tuned to the latest rules and regulations around the gig economy will help you maintain a compliant approach as you continue to gain maximum benefit from your gig workers.

MORE: What the staffing industry should know about the contingent workforce

Scott Fraleigh

Scott Fraleigh
Scott Fraleigh is president of Managed Services Provider (MSP) and Payrolling and Independent Contractor Services (PICS) for Randstad Sourceright.

Scott Fraleigh

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