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Is the Gig Economy Affecting Your Bottom Line?
Originally published by Christian Valiulis in HR Professionals Magazine.
In the days of low unemployment rates, competitive salaries, and a shortage of qualified workers, companies are battling for quality employees against a silent enemy. The increasingly popular gig economy is the arch nemesis you never knew you had. More commonly known as freelance or contract work, the gig economy is an emerging market where individuals can work multiple, small jobs compared to the traditional full-time permanent position.
What’s At Risk
57 million U.S. workers are in the gig economy. Some researchers even project that half of the working U.S. population will move into freelance work within the next five years. That’s a hard, bitter pill to swallow and it’s naive to think these numbers aren’t impacting your workforce.
Think about your current turnover rate. The replacement cost of a lost employee is $15,000 per person for a worker earning a median salary of $45,000 a year, according to the Work Institute’s Retention Report. As turnover increases, customer satisfaction, organizational growth, and profitability suffer. Can your business afford to lose so much?
Clutch also reports that sixty-nine percent of employees outsource their skills to earn extra money. How can your company keep permanent workers without necessarily raising salaries? It starts with examining the employee experience and determining what retainment tactics your company can incorporate to combat increased turnover to gig work. Whether you offer extra PTO hours, create customized training plans, or schedule weekly check-ins, enhancing your employee experience will help safeguard your workforce from the gig economy.
Offer a “Buffet” of Benefits to Employees
If your company can’t afford to increase salaries, consider incorporating alternative benefits and perks that cater to your employees. Get to know your employees and what’s important to them. Offering the standard benefits package plus a lower salary isn’t going to motivate workers to stay in their full-time role for an extended period of time. The gig economy has an attractive pull for those who enjoy flexible schedules or want to be their own boss. Adjusting your approach to employee benefits conveys the message that you’re listening to your workforce and are making an effort to keep them satisfied in their position.
Start by reviewing what benefits or rewards are currently being offered to your employees. Then, survey your employees to find out what they think about their current benefits and the types of benefits options they would like to see implemented. If you conclude your benefits packages aren’t appealing enough, revamp your offerings to give employees more options when they earn a promotion or bonus. Consider these instances where you can beef up your benefits structure:
alternatives to monetary bonuses
If your company is unable to provide monetary bonuses when a large company goal is met, consider rewarding employees with a list of perks like extra paid time off hours, a company-paid percentage of health insurance, or a paid wellness membership. Microsoft offers an annual $800 “Stay Fit” reimbursement to help cover the cost of gym and fitness memberships.
reward employees for work anniversaries
Some companies can’t afford to raise salaries for employees each year, so you can provide special perks for significant work anniversaries like five or ten years of service. Employees who have remained loyal to the company for several years may deserve rewards like a vacation with company-paid travel, sabbaticals, or an increase in their favorite perk. Nike perks vary by position, experience, and location. They include benefits like paid sabbaticals, summer hours, and fitness discounts.
Supporting higher education
Sixty-two percent of Americans over the age of 30 have student loan debt, so offering to pay a portion of your employees’ student loans may be a great option. This perk could apply to the employee or their child earning a higher education. Taco Bell provides education benefits to all of its employees that include access to academic and financial aid coaches, as well as up to $5,250 a year in tuition assistance.
Communicate to your employees that they play an essential role in the success of the business by providing benefits they wouldn’t have in the gig economy. If you’re planning to offer a variety of employee benefits, allow your employees to choose which benefits they would like best. Giving them the power to choose is an excellent indication of what’s most important to them and allows you to cultivate a more positive work environment. You can even use an online workforce management solution to create a quick and efficient benefits enrollment process.
Invest in Long-Term Training and Development
It is a manager’s responsibility to discuss their employees’ current and future goals so they can carve out enriching career paths. Managers will know what skills and experiences are needed to move up in a role because they have likely gone through the same career development as well. Employees often start looking for alternative career options when their company isn’t committed to their long-term growth.
Invest in employee training by creating a tailored development plan for goal achievement. Talk to your employees one-on-one about what they want to accomplish, skills they wish to acquire, and what help they need to meet these goals. Cultivate employee growth with opportunities to attend conferences, participate in team retreats, or through continuing education. Setting specific career development goals will assist you in creating a customized performance management plan.
Continuing education can easily be managed through affordable learning management platforms that offer a range of courses. An LMS allows your employees to learn at their own pace and is accessible from any device, making it easier for employees to work on their career path.
Get Real About Performance Management
Without regular one-on-one conversations about performance and goal progressions, employees won’t be on the right track for role development. Review your current performance management process to identify ways to improve.
A great place to start is conducting frequent performance reviews or meetings designed to create open communication with employees. Participating in weekly or biweekly check-ins creates a feedback loop allowing employees to make constructive changes to their work habits for improved performance. If an individual isn’t getting the mentorship and guidance they are looking for from their manager, they may seek it outside the company.
Both DocuSign and Adobe have abandoned the annual performance review, opting for continuous feedback with their employees. This approach gives employees the opportunity to talk candidly with their managers about their career and progression path so they’re always aware of how they’re doing. As a result, DocuSign has seen an increase in employee retention and Adobe has seen a 30 percent decrease in turnover.
It’s important to track these valuable employee interactions and organize your performance management process. By using tools like a workforce management solution, you can analyze individual performance, refine goals, and optimize your career development strategy.
Keep Your Employees Happy
As more workers jump on the gig economy bandwagon, businesses need to gather information about why employees are heading for the hills and what’s attracting them to specific roles. Conduct an audit of your company’s benefits offerings, career development opportunities, and performance review structure. From there, develop a strategy around these areas of the employee lifecycle by focusing on what your workers are looking to achieve in their current roles and beyond.
When you begin to understand why your employees are frustrated, you can create a plan of action that fosters retention. Once you begin offering a more fulfilling employee journey, you’ll see reduced turnover and increased profitability. Just remember, happy employees are your best defense against the gig economy.
About Christian Valiulis
Chief Revenue Officer Christian Valiulis at APS is a member of the Forbes Business Development Council. As a national human capital management and full-service payroll processing company, APS delivers a unified cloud solution backed by guaranteed payroll tax compliance services. Christian oversees marketing and sales, channel partnerships, and strategic product and service alliances. Connect with him on LinkedIn to stay up-to-date with his most recent publications.
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