Is Using the Gig Economy Too Risky for Your Business?

Posted by Jeff Pelliccio on Oct 6, 2017 9:00:00 AM

In ICS insights

We think that the growth of the new flexible workforce can be good for freelancers and businesses. Earlier, we wrote about the many ways that your business could benefit from the Gig Economy. A few advantages of hiring independent contractors for certain tasks include the ability to scale, lower overhead, and a chance to find experienced talent that might not be available permanently. At the same time, you should also consider a few risks that you may take if you don't hire freelancers properly.

Potential Problems With Using the Gig Economy for Business

Some companies rely very heavily upon independent contractors, but others only use freelancers to fill in for very specific types of tasks. Either way, it's a good idea to consider some pitfalls that businesses have encountered when they failed to carefully consider the best ways to use and obtain independent contractors to work for their company:

Misclassification of Workers

Surprisingly, the exact things that separate freelancers from employees haven't been entirely set in stone. For example, Uber is one large company that heavily relies upon freelance drivers. Not so long ago, a California judge argued that these drivers should really be considered employees under current legislation. If the drivers are legally employees, the company will find itself responsible for certain mandated benefits that they had not provided beforehand.

This California ruling caused the U.S. Department of Labor to issue a memo to clarify the finer points of the rules they use to define employees vs. freelancers. It's important for your business to understand how you can use freelancers to your advantage. At the same time, you need to avoid expensive problems that you might encounter because of misclassified workers. One important point to consider is how much the worker relies upon your company for income and employment services. If you hire freelancers, it might be better to hire them through a service than directly in order to avoid potential problems.

Inadequate Screening

Your freelancers may not be employees; however, they will still probably have a chance to represent your business. HR Professionals' Magazine points out that you need to prioritize getting to know more about anybody who you plan to give access to your buildings and sensitive, valuable data. In addition, anybody who might represent your company should represent it with the same ethical behavior that you'd expect out of permanent employees.

If you don't make sure you only hire screened freelancers, you could find that your flexible workforce poses a threat to your company's security, safety, or brand reputation. You want to be certain that these individuals are honest and that they can and will do what they say they do. You might rely upon a freelancing service company to make sure that workers have been properly vetted.

Let ICS Help You Benefit From the Gig Economy the Right Way

Here at ICS, we can offer you a flexible workforce that can grow or shrink when it benefits your business. We take responsibility for screening prospects before we offer them as potential contract workers for your company. In addition, we can take the time to develop relationships with both our clients and our workers to make sure that we send the best matches to the right companies. We can also offer employee of record payroll services in order to eliminate the risk of employee misclassification.

Would you like to enjoy the advantages of a flexible workforce and avoid potential problems? Learn more about how we find talent and all of the employment services that we can offer you. If you want to try out temporary employees before you offer them a permanent job, only bring in independent contractors, or hire permanent employees, you should think of ICS first.