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How Businesses Can Benefit from Embracing Employer Status

By: Scott Absher, CEO of ShiftPixy

Flexible schedules don’t need to come at the expense of benefits!

With the coronavirus pandemic, the greater staffing industry has been turned on its head as business operators are confronted with the reality that their old approach to human capital management is no longer optimal. While under scrutiny, there are aspects of the gig economy that address many of these staffing woes but on the flipside, leaves a large portion of the workforce unprotected.

Particularly for operators with customer-facing staff, like restaurants, hotels and even hospitals, shift-based employees are arguably the most vital aspect of the business. In order to thrive, they should embrace employer status while still leaning into the pros of on-demand work by providing benefits and flexible schedules. In doing so, they will see slower turnover, a happier staff and more positive customer engagement.

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Benefits Go a Long Way

Since companies like Uber and Lyft hit the market, they’ve faced criticism for classifying drivers as independent contractors, meaning they’re not obligated to offer the same benefits and protections that would be provided to direct employees. As risks around COVID-19 continue to spur, many workers argue that, as they’ve put their health on the line to work, the on-demand platforms should offer the proper compensation. This conversation is heating up across the country, particularly in California where Proposition 22 is threatening the gig economy business model as it stands.

Even beyond ridesharing platforms, lack of benefits is a major issue for other independent contractors and shift-based employees across the country. When businesses limit their employees’ hours to be below the full-time threshold or use contractors from third-party services, they’re ultimately depriving the workforce of protections which can harm employee morale. The best thing an employer can do, particularly in these turbulent times, is to invest in the workforce and this requires embracing employer status and offering benefits. In turn, workers will be more satisfied with their employer and ideally more inclined to stay loyal to the company.

Flexibility: Now That Much More Important

A study conducted before the pandemic revealed that nearly 40 percent of job candidates worldwide view flexibility as one of their top three desires when choosing a role. Now, with children schooling from home and schedules in flux, flexibility for the workforce is more critical than ever – but it shouldn’t come at the expense of benefits.

Many businesses argue that they would like to provide schedule flexibility, but due to maybe the nature of their industry, it’s not easily doable. Even some gig workers, namely ridesharing drivers, are fighting to maintain their flexibility in place of receiving benefits, underscoring its importance to the workforce. However, as technology seems to dictate many aspects of life, it can also be used to help businesses reach a staffing solution that helps operators better manage their workers, and allows the workforce to choose the shifts that work best for them while being protected.

Investing in the Workforce for Business Success

Now more than ever, it’s important for operators to invest in and take care of their workers. But there’s more value to this beyond solely ensuring America’s workforce is protected. By choosing to directly employ workers, businesses will have more control of their operations and brand. For example, when restaurants deploy independent contractors from third-party delivery companies, they are handing their product, customer relationship and overall experience to the likes of someone who has no obligation to the establishment, versus a trained and uniformed worker.

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While the upsides to third-party delivery apps is that operators don’t need to concern themselves with drivers insurance and other mandates or costs, the platforms aren’t the only solution for businesses grappling with staffing. Instead, they can tap a platform that values employer status, and is equipped to hire away and lease back a businesses’ workers to be repurposed to meet the needs of the marketplace. Managing the entire HR stack for operators, the platform can enable brands to use direct employees while ensuring they also have the benefits and flexibility they desire.

There are many downsides to the gig economy as it currently stands, but the flexibility and convenience of an on-demand workforce can’t be denied. Rather than choosing between benefits and flexible work, operators need to totally rethink and adjust their methods of human capital management that puts both themselves and their workforce first. By embracing employer status and new technologies, they can more efficiently manage their staff, particularly in the era of COVID-19, and beyond.

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