ROSELAND, N.J., Feb. 4, 2020 /PRNewswire/ -- While technology and
innovation are transforming the way we work, they are also directly
impacting why, when and where we work. In a
first-of-its-kind study, the ADP Research Institute puts the
spotlight on the gig workforce in organizations, often described as
a hidden or 'shadow workforce.' The research report
titled, Illuminating the Shadow Workforce: Insights into
the Gig Workforce in Businesses, reveals tenured
workers and retirees are capitalizing on the tight U.S. labor
market and the need for skilled workers, by turning to gig work.
The report also found 1 in 6 enterprise workers are actually
gig workers paid as either 1099-MISC (1099-M) workers or short-term
W-2 employees working one to six months. The report takes a
close look at their compensation, varied skill sets, and
motivations.
Backed by anonymized payroll data of 18 million workers from
75,000 companies, coupled with 16,800 direct survey responses from
traditional employees and gig workers, and 21 C-level executive
interviews, the research shows that this changing composition
of the workforce has significant talent management, budget and
compliance implications for businesses of all sizes.
In addition, the ADP Research Institute identified two worlds of
gig workers in businesses. The first is comprised of 1099-M
contractors who are independent contractors, often hired for their
skillset on a project basis. These skilled, tenured workers
tend to be older, highly educated and choose to work on what they
enjoy. In fact, 30% of 1099-M gig workers are aged 55 or
older. For some, their gig work is supplemental income to their
retirement savings. The second includes short-term W-2
employees who are younger, less educated, have a lower income, and
are typically working on a seasonal or on-call hire basis.
"It is clear there is a fundamental shift in the workforce as
innovation continues to transform work, increasing the demand for
skilled workers," said Ahu Yildirmaz, co-head of the ADP
Research Institute. "To bridge the talent gap in today's
tight labor market, many companies are hiring skilled workers at a
premium. Our research shows that companies are turning to tenured,
skilled workers and retirees on a gig-basis to meet this growing
demand."
Spotlight on the Gig Employment and Key Findings
Following are additional takeaways from the report:
- Gig work is growing: From 2010 to 2019, the share of gig
workers in businesses has increased by 15%, with both short-term
W-2 and 1099-M gig workers contributing equally to this growth.
The research indicates gig work will continue to grow,
further impacting workforce dynamics and forcing companies to
optimize talent management and workforce strategy.
- Every industry relies on gig workers: Recreation,
construction and business services are the top three industries
utilizing the gig workforce.
- Contract life is a choice: More than 70% of 1099-M gig
workers say they are working independently by their own choice, not
because they can't find a "traditional" job. Most seem happy
with gig work and place a premium on flexibility as a driving
motivation behind their decision, over financial security or
benefits. In fact, 60% of 1099-M gig workers say they will
continue to gig for the next three years.
- Gig work is not sporadic: More than half of the
1099-M contractors work for the same company for 12 consecutive
months just like any traditional W-2 employee.
- Earning potential is similar to a traditional
worker: The average income for employees working for 12
consecutive months is similar, regardless of being a 1099-M worker
or a traditional W-2 employee.
- Millennials and Gen Z gig it their way: Gig workers
under the age of 34 view themselves as traditional employees,
perhaps reflecting the shift in the workforce. However, the
prospect of health insurance does not appear to change their job
behavior. In fact, 74% say they would continue to work as a
1099-M worker, even if they lost their current health
insurance.
Added Yildirmaz, "While the term 'gig worker' has seamlessly
integrated into our vernacular and culture, there has been no real
data-driven insight into the gig workforce in the enterprise space.
This 'shadow workforce' is comprised of workers with vast
skillsets, who work across all industries and in all regions of the
U.S. Additionally, we have found that the majority of these
workers are doing gig work out of preference."
To see the detailed report, Illuminating the Shadow
Workforce: Insights into the Gig Workforce in Businesses,
including all data and insights, please download the report
here.
About the ADP Research Institute
The mission of the ADP Research Institute is to generate
data-driven discoveries about the world of work, and to derive
reliable economic indicators from these insights. We offer
these findings to the world at large as our unique contribution to
making the world of work better and more productive, and to bring
greater awareness to the economy at large.
About ADP (NASDAQ: ADP)
Designing better ways to work
through cutting-edge products, premium services and exceptional
experiences that enable people to reach their full potential.
HR, Talent, Time Management, Benefits, and Payroll. Informed by
data and designed for people. Learn more at ADP.com
ADP, the ADP logo, Always Designing for People and ADP
Research Institute are registered trademarks of ADP, LLC. All other
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Copyright © 2020 ADP, LLC. All rights reserved.
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