Benefits for Contractors in Gig Economy
Given all the recent talk about gig economies*, I reached out to my contacts and asked if there are any British Columbia (BC) based companies that offer benefits to their contractors, similar to those of permanent employees. Thanks to my first and second degree LinkedIn connections, I managed to collect a fair amount of data on this subject. Without revealing any organizational or individual identifiers, I have outlined the findings below.
A number of BC-based companies provide “permanent employee benefits” to their contractors for two reasons: Talent Acquisition and Talent Retention. In fact, this practice has been so successful for one local company, which operates in a very competitive industry, that they now only hire contractors to complement their permanent workforce. Benefits include standard medical/dental + pension plan + 2x the matching Registered Retirement Savings Plan contribution + 5 weeks paid vacation + 3 weeks of personal time + fixed hours of work, for the duration of contract.
Few BC-based industry colleagues mentioned that they are seeing an increase in the number of contractors per company due to:
- More employees and/or job-seekers than ever before are starting to show interest in project-based positions versus long-term employment.
- Contractor/consultant tax incentives.
- More baby boomers, nearing or in retirement, are coming back to work as contractors/consultants either to supplement their income or due to skills-shortage.
Few benefits experts told me that nearly 80% of BC-based companies are either offering benefits to their contractors or are seriously considering it, which mirrors the national average. However, these experts warned that benefits for contractors should/can not be exactly the same as those for permanent employees, and that minor adjustments and/or omissions are required. For example, disability and life insurance should not be offered as they are much riskier type of benefits. It is highly recommended to contact licensed advisers to discuss this prior to implementation.
In general, companies are seeing positive results from offering benefits to their contractors versus pay-in-lieu or no benefits at all.
What do you think about offering benefits to contractors and consultants? Your feedback is welcomed and appreciated.
* Google Dictionary: gig e·con·o·my | noun: gig economy; plural noun: gig economies | a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. | “working in the gig economy means constantly being subjected to last-minute scheduling”.