The rise of digital giants in the gig economy has brought new scrutiny to how companies should manage contingent workers.
In the coming months, IPOs from big tech companies like Uber, Lyft, Postmates, and DoorDash won’t just draw attention and funds from investors on Wall Street. The disclosures these companies provide are likely to bring new scrutiny to how they — and, by extension, the gig economy in general — manage workers.
Already, some members of Congress are looking to step up protections for workers who try to cobble together a living through contingent and alternative arrangements. As Democratic Senator Mark Warner of Virginia said when reintroducing legislation in February, “Changes in the nature of work mean that Americans are more likely to change jobs and be engaged in nontraditional forms of work than they were a generation ago,” but federal policies have not evolved along with these economic shifts.
Having cofounded an app, Steady, to help people find sources of income in this economy, I see every day just how badly many workers are struggling. More than 4 million Americans are working part time for economic reasons, meaning they could not find full-time work or have received reduced hours due to economic slack.
Even among those who get enough hours to work full time, most don’t receive benefits. And if they lose their jobs, most gig workers cannot collect unemployment.
This problem is only going to grow. A 2017 NPR/Marist poll found that 1 in 5 jobs is held by a worker under contract and that within a decade, contractors and freelancers could make up half the workforce.
It isn’t just the workers who lose out due to this lack of stability. When people are grappling with financial stress, their health and productivity suffer. That stress is rampant among workers in general; 78% of U.S. workers live paycheck to paycheck, and nearly 40% have a side hustle.
But the unpredictability gig workers can face, with income often varying month to month, can make their plight even worse.
To help workers with contingent or alternative arrangements in any industry, from sales to construction, here are three important steps managers can take.
Schedule at least two weeks out. Companies that allow people to work any time, like Instacart or TaskRabbit, get a lot of attention. But most of the jobs in the gig economy don’t have this kind of flexibility. According to one study, 1099 workers are most plentiful in professions like agriculture, manufacturing, and childcare.
Far too often, these workers don’t receive their schedules until just the day before they’re needed. It becomes impossible for them to stitch together multiple jobs and make enough money to support themselves. Many can’t simply supplement their incomes with app-based work whenever they’re available, since they don’t have access to a vehicle or they live in areas with limited demand for drivers and deliverers.
When managers provide workers with their schedules at least two weeks in advance, they empower workers to plan — and help them make a living.
Provide training. Career pathways are generally designed for full-time employees. They can see the next promotion to aim for and can parlay their experiences at one company into a full-time position at another. But gig workers often have a harder time building toward long-term careers.
This is especially true with workplaces that are experiencing rapid change. While people in traditional employment often receive training in new skills, tools, and technologies, contractors are left out. As other research on contingent workers has noted, “Rather than benefiting from the traditional route of gaining knowledge and training through the workplace, alternative workers tend to switch from job to job, losing access to professional development and advancement opportunities.”
By extending education and training opportunities to gig workers, managers can help them compete in the years ahead. The National Retail Federation Foundation is doing this through a program called RISE Up, helping “build the retail industry’s next generation of talent.”
Offer loans. Four in 10 Americans couldn’t cover an unexpected $400 expense without selling something or borrowing the money. More than one-quarter are skipping necessary medical care because they can’t afford it. These and other findings from the Federal Reserve present a powerful reminder of the stress workers are under.
One helpful step business can take is to make loans available. Managers provide these in relatively small increments to employees when they face emergencies. Some companies have already begun doing this, while others are allowing paycheck advances. And some are making financial planning resources available to employees. Providing such benefits not just to full-time employees in traditional arrangements, but also to gig workers, can help alleviate stress.
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To create stability for today’s workforce, the United States needs a series of laws that will empower gig workers with basics like minimum wages and access to affordable health care. Some cities and states (like California) are already taking actions to protect workers. But businesses must help lead the way. And those that do — for instance, perhaps, Amazon, which raised its minimum wage to $15 — stand to gain with happier, healthier workers who want to be a productive part of the team.