Dive Brief:

• ADP has purchased WorkMarket, a workforce management startup, extending its payroll service to contract workers, freelancers and consultants. The acquisition makes ADP among the first human capital management (HCM) companies with the ability to manage freelancers and report insights across the spectrum of workers, from gig workers to full-time W-2 employees.
• ADP says that their purchase of the firm will enable HR professionals to compensate both employees and contingent workers in a timely manner as more employers tap into the growing gig economy for talent. ADP says it pays more than 26 million U.S. employees and 13 million employees elsewhere in the world. WorkMarket's acquisition will increase that number with the addition of contingent workers. 
• Founded in 2010, WorkMarket has venture capital totaling $56 million from Spark Capital, Union Square Ventures and Foundry Group, according to an email sent to HR Dive.

Dive Insight:

HR professionals will increasingly have more involvement with contingent workers as companies look to the gig economy to fill the skills gap and cope with the current labor shortage. According to a recent Randstad Sourceright survey, 61% of HR managers plan to convert a third of their permanent full-time posts to jobs that contractors, freelancers and other contingent workers can fill.

So far, the spotlight has been on the gig economy's rapid growth and who's driving it. But far less attention has been on how HR's role with permanent workers might differ from their interaction with independent workers. 

ADP's acquisition of WorkMarket can address compensation questions concerning contract workers. But HR managers will likely need to address other issues, such as gig workers' performance and termination, as well as legal issues such as classification, work eligibility, unionization, liability and contract breaches.

Employers have kept labor costs low by hiring contingent workers without paying them benefits and adjusting staffing levels as needed. But lawmakers are considering updating wage and hour laws to accommodate the burgeoning gig economy. HR managers eventually could be administering some portable form of health coverage, workers' compensation and other benefits to protect gig workers.