There’s been a lot of discussion lately about the gig economy. According to the Bureau of Labor Statistics, 15 million people in US were self-employed in 2015. It is predicted that by 2020 more than 40% of the workforce (60 million people) will be independent workers – freelancers, contractors, temporary employees. Harvard Business Review called it “the rise of the super-temp” and predicted that – perhaps contrary to current perceptions – these contractor positions will be held by the best and the brightest. There are even new platforms to pair talent with businesses, like Contently, Hourly Nerd, Field Nation, and our own Mercer PeoplePro.
Consider the next generation of workers – digitally savvy kids who see the global grid as their toy. Pair that with two more trends – an increasingly global labor pool and the aging baby boomer population interested in retirement on their own terms. What does this mean as we think about the future workforce and a possible “new normal” for benefits?
In Mercer’s 2016 Global Talent Trends study, 85% of the nearly 2,000 HR leaders who participated said that their talent management program and policies needed an overhaul. We also surveyed about 4,500 employees for the same study, and even including those who say they are generally satisfied with their current organization, one in three are seriously considering a change in employment in the next 12 months. Typical underlying factors include lack of development, outdated processes, and discontent with their manager’s role.
How big of an issue is pay? Looking at survey results from the past five years, we find that pay satisfaction levels have been steady – but with only about 55% of employees surveyed reporting that they are satisfied. Few think pay-for-performance is adequate. Fewer see how their work contributes to the organization’s overall goals. Few think they are fairly paid. What do they say about benefits?
- 89% say benefits are just as important as salary
- More than a third are already having trouble paying for health care now and about half express anxiety for the future
- Being able to afford health care in retirement is the top savings objective
Returning to the gig economy, it looks to me as if an employer that wants or needs full-time workers will have to make a case not only that their organization is a better place to work than their competitors’, but that full-time employment beats independent work! That will be harder to do if talented workers believe that the employer-sponsored health plan doesn’t provide adequate coverage and they need to take matters in their own hands in terms of paying for health coverage. And employers that can hire contract workers will still need to consider how to help keep them healthy, productive and engaged.
All of this to tee up a couple of questions that will need answers sooner than you might think: What do we need to do to attract workers going forward and what will the new normal for benefits be?