Small to medium sized businesses depend on the flexibility and reduced overhead of contingent workers.
Some argue that they are also exploiting what "The New York Times" characterizes as the “hidden inequality” of contingent workers—the uncertainty of a paycheck from week to week.
Now, there may even be an app for that allows for businesses to take advantage of on-call employees without, well, taking advantage of them.
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What Is a Contingent Worker?
Almost every business relies on a contingent workforce to fill skill gaps and manpower needs during temporary upswings, without incurring the costs and risks associated with full-time employees. The Wall Street Journal reports that some 53 million Americans, representing 34 percent of the nation’s workforce, work on an on-call basis.
According to an Ardent Partners study cited by Maria Wood, 92 percent of the enterprises surveyed said contingent workers were an important part of their overall HR and staffing strategy.
While contingent workers include highly-paid tech consultants or other contractors with specialized skills who either work for themselves or through third-party agencies, an increasing portion of this category comprise relatively low-paid workers in service and retail industries that in another era were called “temps.”
The difference is that technology enables more precise management of temporary, part-time workers to maximize profitability, while also arguably marginalizing employees. Kronos, for example, is a widely-used scheduling tool that boasts the ability to “optimize people and processes to improve the bottom line.”
The Affordable Health Care Act
The downside of such optimization is that it can reduce individual hours, depriving workers not only of a larger paycheck but eligibility for benefits. The Affordable Care Act, for example, requires companies to offer health insurance to anyone who works 30 or more hours weekly. This has prompted a cutback in employee hours.
Buzzfeed reports that a typical Staples worker who used to clock anywhere from 25 to 40 hours a week is now working less than 25. Scheduling apps like Kronos make it a relatively simple task to manage a contingent workforce to ensure enough people are on hand to fulfill anticipated workloads but to allocate them among enough people to prevent any benefits eligibility from kicking in.
Technology is also driving the growth of the sharing economy, which allows individuals and organizations to offer spare resources (their time, their living and work spaces, their excess capacity) for hire.
Yes, we’re looking at you, Uber, and your argument that your app enables independent contractors to get better fares and drive on their schedule. As opposed to those who argue you are a taxi cab company exploiting labor law loopholes to avoid regulation and worker protection.
In theory, the sharing economy sounds like a good deal. Work when you want to. The problem is not everyone has the option just to work when they want to. They want to work to make a decent living.
Consider Jennifer Guidry, a Navy veteran, former accountant and mother of three. She is a driver for Uber and Lyft, as well as a “tasker” for TaskRabbit, an app to hire people to perform a range of household and maintenance chores.
"The New York Times" reports that in an attempt to pay her bills, Guidry works seven days a week, constantly on-call, subject to changing pay rules and capricious cancelations.
An app aims to level the playing field so that on-call workers can better manage their time and pay expectations. At the same time, it also eases the social conscience of employers, allowing them to continue to take advantage of a contingent workforce without which, in many cases, they cannot remain competitive and survive.
The app is called exactly what it intends to do: Even.
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The app calculates a worker's average paycheck based on earnings over the last six months. Even defines average with an algorithm that weighs things such as more recent pay increases over what someone may have made at the start, six months ago.
The result is that Even issues an “average” paycheck that remains constant regardless of whether the worker earns more or less any given week. Even depends on times when workers make more to bankroll compensating for less than average work weeks. The company even provides emergency pay advances from the next week’s check, eliminating payday loan interest or overdraft fees that that further impair contingent worker ability to maintain a living wage.
The app requires a link to the worker’s bank account and a three dollar weekly fee. As "Newsweek" points out, there are still kinks to work out. These include not only privacy concerns about direct links to customer banking information but also whether it might make it all that more difficult for its target audience to properly manage their money.
Newsweek quotes freelancer Devon Maloney: “If I had this service working with me, sure, I would sleep a little better…However, I don’t think I would be prepared for the realities.”
There’s also the question of whether the startup can even maintain venture backing and financial viability upon general release. Even CEO Jon Scholssberg acknowledges, “We’ll have to solve problems no one has ever solved before…Failure is a possible outcome…does that mean we should not try?”
Even has a noble objective: to help a growing percentage of workers make a decent living by helping them better manage their finances and avoid high-interest, high-fee services they often rely on to make ends meet.
You can help. Even is currently in beta testing with a small group of users. They are now accepting “invites.” You could make your contingent workers aware of the tool.
Better yet, you could offer to pay the three dollars weekly fee for the service. Sure, that adds to your cost of doing business. But it also “pays back” those workers you depend on to fill temporary staffing and workload gaps.
You can not only feel you’re doing so in a clear conscience, but you also gain a more loyal and dependable workforce you can rely on as you need them.