Gig Workers May Have ‘False Sense of Security’

Noting that some experts believe that a persistently high part-time employment rate may be a “new normal,” Guardian’s fourth annual Workplace Benefits Study, Part-Time Nation, contends that many part-timers are falling behind financially because part-time workers and contractors are often ineligible for insurance or retirement benefits from their employer.

The report discusses how the American labor force appears to be undergoing a fundamental shift affecting both employers and employees. A growing number of workers are choosing part-time work, citing the flexibility and work-life balance that it provides. And despite the lack of access to employee benefits, many part-time workers apparently believe they are faring well financially relative to their full-time peers. Guardian notes, however, that many part-timers and their families may have a “false sense of security” stemming from a lack of understanding about how employer-provided benefits can provide financial stability.

“While pursuing a passion and achieving greater work-life balance are indeed major advantages of alternative work arrangements, the lack of important insurance and retirement benefits can negatively impact financial security for themselves and their families,” says Peggy Maher, senior vice president and head of Guardian’s direct-to-consumer business.

According to the report, the nation’s 27 million part-time workers make up 18% of all workers, and three-fourths of them choose to work part-time to achieve a better work-life balance. If you factor in freelancers, independent contractors or other contingent positions, the number of working Americans participating in the “Gig Economy” is actually closer to 40 million, or 25% of the labor force, the study shows.

Meanwhile, more employers expect their part-time workforce to grow over the next three years. About one in three employers anticipate growth in part-time workers, while 13% expect a decrease, resulting in a net of more than 20% projecting growth.

Not surprisingly, access to workplace benefits varies and is consistently much lower for part-time workers compared to those in full-time positions. The report shows, for example, that nearly 70% of full-time workers have access to a retirement savings plan, while only 32% of part-time workers do.

The report suggests that, given the important role these benefits play in protecting the financial security of working Americans, “it may be time to sound the alarm for America’s growing part-time nation.”

If the upward part-time employment trend continues, more companies may feel pressure to use employee benefits as a “differentiator” for recruitment and retention of their part-time workforce, much like they do today for their full-time workforce, the report notes. Guardian suggests that employers anticipating an increase in part-time workers may want to consider providing their entire workforce with employer-sponsored benefits, contending that such a move will ease the financial stress of their part-time employees, possibly reduce turnover, and differentiate the added-value available to a company’s entire workforce.

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