ON-DEMAND WORKERS

Consumerization of benefits appeals to the on-demand workforce

Flexible workplaces are providing options for full-time employees, but as the on-demand workforce grows, employers are beginning to see the value of benefits for all.

BY CAROL BRZOZOWSKI

There is a growing inequality in today’s labor market that is creating a two-tier workforce between a company’s employ- ees and its contingent workforce when it comes to employee benefits.

Some would add contingent workers are being treated akin to second-class workers without access to benefits in contrast to the extensive, high-quality benefits afforded to full-time employees, although they perform the same tasks, according to John H. Ch- uang, CEO of Boston-based staffing company Aquent.

“That doesn’t mean an HR director wants to eliminate vari- able pay or a contingent worker,” he said. “There are obviously jobs where you’re going to hire someone for only a year. It’s OK to have a contractor and an employee work together. A flexible workforce is necessary to help American companies maintain their competitive edge.”

For Chuang’s company, that means offering benefits to con- tingent workers.

It’s part of the changing consumerization of the workforce, which is leading employers to consider transitioning from a one size fits all approach to wages and benefits toward a model that aligns with employees’ diverse needs.

A shifting workforce “For us, that means sharing an incredible amount of in

Driving this change of dynamics in the American workternal data and communications with candidates before place is a generational shift, an increasing interest in gig and they even join the company,” he said. remote work and new legislation establishing different emRather than imposing innovation from above, studies ployee classification metrics. show employers should use surveys and group discussions

Consumerization refers to those in the workforce — to explore employees’ feelings about new technologies and more than half of whom are now millennials — who seek elicit their help and suggestions through managerial collaban employment experience that empowers them to make at oration for successful implementation, said Dinkin. least some of their own choices about tasks and goals, thus Dinkin, whose own workforce has mostly full-time bringing a customer-like mentality to the workplace. and some part-time employees ranging in age from 20s

“They shop around almost like to 60s, said each generation has difthey’re buying a cell phone,” said Cowden Associates President and “THE 2020s WILL ferent priorities regarding pay, benefits, time off, retirement, tuition CEO Elliot Dinkin, whose company provides actuarial, compensation BE THE DECADE reimbursement and other factors. As the employee moves through and employee benefits. “As individuals and consumers, we’re OF AUTONOMY AT the company, they can migrate to other packages based on their needs, used to setting our own goals and managing our own tasks, rapidly adopting WORK AND THE Dinkin said. For example, a 24-year-old college the apps and tools that enable us to MAINSTREAM graduate may not be thinking about achieve what’s important to us, with ease,” said John T. Anderson, CEO of ADOPTION OF TOOLS retirement and may prefer to remain on a parent’s health insurance plan Smartway2, which provides workplace scheduling solutions for enterprises. THAT ENABLE US until they are 26 years old rather than obtain insurance through work, Din“Rather than putting up barriers that hamper autonomy and rapid TO CRAFT OUR kin said. Some employees may want the opadoption of new technology, organizations are now firmly focused on offerOWN UNIQUE tion to pass on benefits and make as much money as they can, he said. Aning a seamless, consumerized employee experience so they can reap the beneWORKPLACE other employee may prefer more paid time off because they want to attend fits of increased productivity, collabo ration and innovation. EXPERIENCE.” their child’s school or sports events or must care for an aging parent.

“The 2020s will be the decade of — COWDEN ASSOCIATES autonomy at work and the mainstream adoption of tools that enable PRESIDENT AND CEO The value of benefits for on-demand workers us to craft our own unique workplace ELLIOT DINKIN In order for employers to set experience,” he said. “These tools will themselves up as employers of choice rival consumer applications in ease of use and ability to in a consumerization environment, Dinkin urges emsculpt human behavior.” ployers to be aware of these developments and consider enabling employees to design a package that fits compaPeople are people, not “resources” ny operations, is cost-effective and offers choices more

Joseph Quan, co-founder and CEO of Twine Labs, which aligned with individual career goals, life stages and rankhelps integrate HR data to deliver analytics and visualizations ing within the company. for CEOs and HR leaders, labeled consumerization as a fanDinkin cites a recent Deloitte study of millennials in cy way of saying that every company will take a much more which 49 percent said they would leave their current job humanistic approach with every individual it interacts with. inside of two years while about 25 percent actually have

“That applies to customers, partners, investors, candidone so. dates, and employees,” Quan said. “They’re a product of their education where they’re

“Forward-thinking companies are shedding the notion told the best way to get ahead is to change jobs,” said that people are just ‘resources’ or ‘capital’ — implicit in the Dinkin. “They lack information as to what are actually terms HR/human capital — and that attitudinal shift is their opportunities.” reflected downstream in the recent mania around candiIt’s best to sit down with an employee and show them date experience.” how their career ladders can intersect with a wage structure

Companies can position themselves by building a unique and show them the requirements necessary to move from an brand based on its distinctive cultural values and over-inentry level position into a higher level and what they will vest in candidate care and experience, said Quan. make, he said.

California’s AB5 Adds New Layer to Contingent Worker Worries

To the extent that a company considers implementing consumerized-type offerings to its workforce, how to classify employees is becoming a topic of political debate with legal implications.

The term gig worker serves as an umbrella term for workers in a variety of alternative employment arrangements, such as freelancers and independent consultants, on-call workers, temporary help agencies, contract firm workers and contingent workers.

While those in the gig economy vary, widely cited Gallup data shows that 36 percent of the 157 million Americans in the U.S. workforce have a gig arrangement in some form.

California Assembly Bill 5, which addresses and changes the circumstances under which a company can classify its workers as independent contractors, went into effect this year. Similar legislative efforts ensued in other states as well as at the federal level through the introduction of the Federal PRO Act bill.

Proponents say such laws are keeping independent workers from exploitation. But the efforts are being met with resistance by some independent contractors who say one of the unintended consequences is that by changing the metrics that reclassify workers from 1099 independent contractors to W2 employees, it is hurting their careers.

Soon after California’s Assembly Bill 5 went into effect, it was met by lawsuits from the California Trucking Association and American Society of Journalists and the National Press Photographers Association whose members found that companies are either capping their work to prevent reclassifying them as employees, hiring from out of state or ceasing to hire independent contractors.

“No matter what ultimately results from the new law in California, we are going to see a new level of attention — and in some cases scrutiny — given to employer-employee relationships in 2020 and beyond,” said Cowden Associates President/CEO Elliot Dinkin.

— Carol Brzozowski

Consumerization extends beyond a full-time employee to contingent and gig employees

In hiring gig workers, an employer may be trying to save payroll taxes and some benefit costs, said Dinkin.

“Why wouldn’t I create benefit plans for those individuals?” he said. “Don’t I want to make them stick to my company?”

For example, they could be offered a health reimbursement account. “Let this class of employees go out and get medical coverage and reimburse them for a certain amount,” said Dinkin.

Aquent is a talent services company providing marketing and creative talent, managed services, extended workforce benefits, project management and professional development. In 1993 Aquent became the first staffing company to offer full comprehensive benefits to its temporary employees.

Its newly launched service, Square Deal, enables companies to offer equal benefits to their contingent workforce efficiently and at scale.

Aquent’s Square Deal offering includes benefits, policies and eligibility designed for variable work: full- and parttime and long- and short-term assignments that are on par with internal employee coverage.

Its benefits package combines health and dental insurance with accident, critical illness and hospital indemnity insurance; a wellness program; 401(k) or Roth IRA plans; flexible spending accounts for health care, dependent care, parking and transit; an identity protection plan; an employee discount program, and career development and online skills training.

The best and most productive talent has many options and seeks a reason to work for a company through consumerization, said Chuang.

Benefits provide that reason, he said.

“If you have a yearlong project where someone leaves at the six-month point, you don’t have time to hire,” he said. “It’s devastating. If there is no commitment to the employee, there’s no commitment for the employee back to the company.

“By giving benefits — especially since it’s so unique and different among contractors — they really value it. We found that offering a strong benefits package typically increases retention by more than 20 percent.”

Nick Patel is founder and CEO of Wellable, which offers customizable wellness solutions enabling employers to run an engagement program through wellness apps and wearable devices that includes gamification, rewards and incentives. Additionally, it provides education and consulting services on how to set up an office environment to promote wellness.

Such programs may be subject to failure, however, if employees are not keen on their employer being closely affiliated with their health, said Patel.

“It’s creating a culture about educating and letting employees know why the company is doing it,” he said.

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