Part-Time Nation: How the ‘Gig Economy’ Leaves Workers Financially Vulnerable
3 Min Read By Peggy Maher
The latest set of findings from the Fourth Annual Guardian Workplace Benefits StudySM* reveals that a greater number of working Americans are participating in the “Gig Economy” (estimated to be about 25 percent of the U.S. labor force or roughly 40 million), working in part-time, independent contractor, or contingent positions rather than full-time, permanent jobs, particularly in industries like hospitality, healthcare, and retail. Although employment offers some security, the lack of employee benefits to part-time workers makes them financially vulnerable. Guardian’s research found that among the part-timers surveyed, one in three (36 percent) work in the hospitality industry.
More Americans are seeking greater autonomy and flexibility in their career than they can find in the traditional nine-to-five model.
Of those employed on a part-time basis (27 million or 18 percent of all U.S. workers), three-fourths choose to work part-time to achieve a better work-life balance. The majority are younger millennials (age 22-29) who are just starting their careers and pre-retiree baby boomers (age 60 and older) who are reducing their work hours. The average age of restaurant workers in 2016 was 28.6 years old, according to a study done by the Bureau of Labor Statistics. However, the restaurant industry has also seen a rise in employees over the age of 55 in recent years. The number of pre-retiree baby boomers working in the restaurant industry increased 38 percent between 2007 and 2014 and continues to rise, according to the National Restaurant Association.
In exchange for a flexible work schedule, many part-timers are falling behind financially because part-time workers and contractors are often ineligible for insurance or retirement benefits from their employer. A study done by Economic Policy Institute found that only 14.4 percent of restaurant employees were provided health insurance by their employer, and only 8.4 percent had a pension plan.
The increasing ranks of part-time workers, is causing more employers to reconsider their staffing needs and strategies. Employers that are anticipating an increase in part-time and contract workers can better compete for talent by providing their workforce with employer-sponsored benefits. Unfortunately, the restaurant industry sees a much higher average turnover rate than jobs in the private sector. In 2016, the turnover rate in the restaurant industry was 72.9 percent as opposed to 46.1 percent in all private sector jobs. Providing employee-sponsored benefits will help ease the financial stress of their part-time employees, possibly reduce turnover, and clearly define the added-value available to their entire workforce.
Flexible arrangements are not just a stopping-point on the way to full-time employment; it has become a different type of employment preferred by many and one that is just as important as full-time workers to employers. In order for companies to remain competitive in attracting and retaining talent, it’s only natural that they would want to understand the needs of this growing “gig economy.” For example:
- Offer information about options that flexible workers should be thinking about at the various stages of their life.
- Curate offerings for flexible workers that could be offered through a voluntary worksite benefits platform – either fully employee funded or partially employee funded.
- Direct employees to insurance shopping sites whereby flexible workers can research and find solutions that are right for themselves and for their families.
More Americans are seeking greater autonomy and flexibility in their career than they can find in the traditional nine-to-five model. 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. For those part-timers without access to workplace benefits, the good news is that these products are increasingly available through a variety of channels.”
The study highlights that most part-time workers feel they are faring well financially, but this may be a false sense of security from a lack of understanding on how employer benefits can provide financial stability. Two demographic groups that do not feel financially confident are Generation X and single parents, who cite money and personal finances as the primary source of stress in their lives.
Restaurant management has the power to influence how secure their workers feel. In an industry that struggles to retain valuable workers, this added sense of security can go a long way in ensuring that employees gain financial confidence and you retain a dedicated staff.
*The 4th Annual Guardian Workplace Benefits Study was fielded in the spring of 2016 and consisted of two online surveys: one among 1,204 benefits decision-makers (employers) and another among 1,700 working Americans (employees), allowing us to examine benefits issues from both perspectives. For more information about Guardian’s workplace benefits solutions or to obtain a copy of Part-Time Nation from the Fourth Annual Guardian Workplace Benefits Study SM, visit Guardian Anytime.