- John H. Chuang is the founder and CEO of Aquent, a talent services company that has been providing benefits to the extended workforce since 1993.
- Chuang writes that Senator Elizabeth Warren is right to put a spotlight on the inequalities between full-time and contingent workers, especially as contingent workers play a more significant role in the US economy.
- He says that business leaders can step up and offer these benefits – which will make workers happier and more productive – or wait for the government to take charge.
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United States Senator and 2020 presidential candidate Elizabeth Warren (D-MA) recently announced plans to introduce legislation that would give gig workers the ability to unionize. Senator Warren deserves credit for shining a much-needed spotlight on a serious problem that exists in corporate America today – the significant inequalities that exist in the workplace between full-time and contingent workers when it comes to benefits. While political and legislative pressures have forced a healthy conversation about addressing this urgent challenge, there is good news: Companies can solve this issue right now without waiting for government intervention.
Contingent workers are playing an increasingly significant role in the US economy. In many companies today, up to 50% of workers are contingent. In 2017, The Bureau of Labour Statistics estimated that over 15 million US workers have non-traditional jobs – including those who work as independent contractors, temporary help agency workers, and workers provided by contract firms. And that figure doesn’t even include people who supplement their traditional job income by driving for Uber, for example, on nights and weekends.
This change in the makeup of the American workforce is good. It makes companies more flexible and enhances their ability to compete. It gives workers more control over their professional lives and schedules, and allows them to pursue career opportunities that might not be available to them if they were tied down to a 9-to-5 job.
A serious problem, however, is that while many companies provide extensive, high-quality benefits to their full-time employees, their contingent peers have access to far fewer benefits – or even none at all. They are walking the same halls, performing the same tasks, and contributing just as much to the success of the companies where they work, but are treated as second-class employees. In an age where we are rightly addressing inequality issues in other areas of daily life, allowing this kind of unfairness to exist in the American workforce is simply wrong.
Change is coming. Prior to Warren’s legislative proposal, an October strike by United Auto Workers members led to a deal that included better pay and benefits for temporary workers. This summer, a group of Democratic senators urged Google CEO Sundar Pichai to convert the company’s more than 120,000 contingent workers to Google employees. In California, Assembly Bill 5 became law. This sweeping legislation requires many companies that utilise contract workers to classify them as employees and provide pay, benefits, and worker protections accordingly.
Companies are trying to do the right thing. Earlier this year, Google announced that it will require its staffing suppliers to offer comprehensive benefits to contingent workers at Google by 2022. That is a welcome step.
In America, health, welfare, and other social benefits are delivered through the employer/employee relationship. In many other countries, the government provides these benefits directly and determines what additional benefits are offered to workers. Government mandates could be instituted here as well, as Senator Warren has proposed. If employers don’t take on this issue on their own – especially if the 2020 election changes the political makeup in Washington – they could easily find themselves facing mandatory federal controls on their benefits offerings.
But there’s also a free-market solution to providing equal benefits for all. Employers should step up and do the right thing, especially at large corporations that set the tone for other businesses. We certainly don’t want to turn back the clock and make everyone a traditional, full-time employee again; the flexible workforce is a real asset for US competitiveness. Instead, we must support the gig economy by providing those modern, flexible workers with the benefits everyone deserves.
Companies should embrace a strategy of levelling the benefits playing field; if not because it’s the right thing to do, then simply because it’s good business. Workers who are happy with their benefits are more productive. And good benefits can help companies attract and retain the very best workers – especially those with sought-after skills – in today’s tight labour market.
I know this is a winning strategy because, in 1993, Aquent became the first staffing company to offer full comprehensive benefits to its temporary employees. We have been successfully offering these benefits now for 27 years to more than 100,000 gig workers.
Senator Warren and others have rightly sounded the warning bell to corporate America that equal benefits for all workers are coming. It’s just a matter of whether employers want to make it happen themselves today, or wait for the government to take charge tomorrow. I encourage all corporate executives to step up, be leaders, and provide contingent workers with the benefits they have earned.
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