1 in 4 companies are converting employee positions to contingent jobs, study says

Dive Brief:

A quarter of global and midsize companies in a Randstad Sourceright report said they are shifting traditional employee roles to independent contractor jobs. According to the report, the companies' goals of remaining agile drives the shift. Research for the report, Talent Trends, is based on a survey of human capital leaders, C-suite executives and working professionals in 17 global markets.
More than half of working professionals were more open to nontraditional work options than they were previously, Randstad found. More than three-quarters of businesses polled said they definitely or probably will adopt a total talent management model — what Randstad defines as "an organization's acquisition and management of all human talent, including permanent hires and contingent workers, as well as non-human talent such as robots, AI, software, and automation."
The survey revealed that industries impacted by automation, including automotive and manufacturing and healthcare, are the most likely to adopt this kind of talent strategy.

Dive Insight:

The findings in the Randstad report conflict with at least one piece of recent research. Results from a Deloitte study published earlier this month on technology trends found that fewer private and mid-market sector companies plan to hire as many independent workers as they did in previous years. In fact, the study found that only one-quarter of the companies polled said they believe gig workers help them maintain agility while maximizing new technologies.

As employers consider whether to increase or reduce their dependency on independent contractors, they will need to take into account the federal, state and local laws surrounding worker classification. This month, California passed a bill codifying the state's more rigorous worker classification test. The new law was drafted to clarify the long-standing, often confusing, worker classification rules. In a statement previously emailed to HR Dive, Jesse Jauregui, partner at Alston and Bird, warned that the new law could set off a firestorm of litigation nationwide in an employee-driven economy. "Other states will be watching closely as a patchwork of gig economy legislation begins to develop across the country," said Jauregui.

Zooming out, the U.S. Department of Labor's Bureau of Labor Statistics monthly jobs report has shown that hiring overall has slowed somewhat. In August, the nation gained an estimated 130,000 jobs, compared with July and June's adjusted totals of 159,000 and 178,000, respectively. The hiring slowdown in an otherwise solid economy may stem from a business community proceeding cautiously, while bracing for a possible downturn.

Regardless of what studies show about employing contingent workers, retail employers plan to step up their hiring of seasonal workers in anticipation the holiday season. Recruiting for some of these employers began as early as July.