How Government Agencies can Leverage the Gig Economy · 2017-11-09 · TALENT SUPPLY CHAIN...

Terri Gallagher - Gallagher and ConsultantsNovember 3, 2017

COPYRIGHT © 2017 · GALLAGHER AND CONSULTANTS · ALL RIGHTS RESERVED 1

How Government

Agencies can

Leverage the

Gig Economy

Ensuring a High Quality,

Flexible and Cost Effective

Workforce

INTRODUCTIONS

Specialist in:

Global Contingent

Workforce Strategies

and Talent Acquisition

Technology

Terri Gallagher

President/CEO Gallagher

and Consultants

Terri GallagherCEO/Founder

Gallagher and

Consultants

Our Speaker Today

Terri Gallagher brings 20+ years of experience in

enterprise contingent workforce strategies to bring value-

add innovative solutions and delivery for her clients, both

on the supply and client buyer side.

Her experience as a thought leader and workforce solutions

disruptor has enabled her to provide best in class workforce

solutions for several global and domestic contingent

workforce programs ($10M-$2B in spend) for fortune

100/500 clients across sectors; Finance, Healthcare,

Manufacturing, Retail and Telecom.

Gallagher and Consultants utilizes a trademarked

ecosystem model of delivery that leverages best of breed

talent, technology, and alliance partners to provide

contingent workforce and total talent management

solutions. This ecosystem approach ensures agility and

speed in all phases of talent supply chain; staffing strategy,

change management, VMS and talent acquisition

technology selection and performance, analytics,

operations, solutions, quality and efficiency.


AGENDA


$11B$16B+ $46.5B

Changes in the Workforce Landscape

The Technology Evolution

How State and Federal Agencies are Changing to Adapt

Workers Comp and other Compliance Responsibilities

Worker Friendly Payrolling Solutions for non-traditional labor

Systems and Strategies to Leverage this new workforce

Non-Traditional Labor is Increasing Rapidly

Non-traditional labor Independent Consultants

Contingent Workers

Talent Clouds

Direct Sourcing

2014 2015 2020

Connecting talent directly to end user;

Increase of direct peer-to-peer, non

supplier intermediated engagements

Total Spend

“Human Cloud”

Per Deloitte’s 2017 Global Human Capital Trends; we are moving away from a

full time workforce and skill requirements to multiple workforces and

technologies defining delivery


$11B$16B+ $46.5B

What is the “Gig Economy”?

“Today’s organizations are no longer anchored in rigid, Industrial Revolution-era labor models

but instead fluidly assemble and adjust, pulling from a globally networked labor force,”

Melissa Valentine, assistant professor of management science at Stanford.


Millennials

42million US workers

are 1099

91%expect to stay less

than three years

65million projected

increase by 2020

34%of the workforce has a

second job

1 of 3millennials freelance

The gig economy

Who Are the Gig Workers?

Most are freelancers and

independent contractors.

Both similar – a person or business that

offers goods or services to another

business through a contract or verbal

agreement.

Freelancer - A freelancer worker does

work that usually has to do with more

artist fields like planning events,

technology, music, writing, etc. A lot of

freelance workers create their work and

typically keep the copyrights to their

works and sell the rights to publishers

usually in time-limited contracts.

Independent contractors - Jobs typically

require labor instead of artistic ability.

Others which may be included depending

on definition are:

Agency Temps

On-Call Workers

Contract Company Workers

Self-Employed Workers

Standard Part-Time Workers


Employment Relationship is Changing Now

Change jobs every

4.6 years

Will work for

more than 11

companies in

their career

Changing the

Employment

Relationship /

Comfortable

with “Gig” Work

Millennials will be

50% of the workforce

by 2020 75% by 2030


Why Would Someone want to be a Gig Worker?

“They don’t get benefits or have

protections of a regular employee”

“They will not have the same loyalty as a

regular employee”

Today, some 38 percent of workers say

they feel more comfortable working as an

agile employee (aka independent) than a

permanent employee.

Why? Here are the Top 3 reasons:

1. “Flexibility of Hours;”

2. “More Control over my Career;” and,

3. “I can pursue my passion” (in that order).


By 2019 it’s estimated that up to 50 percent

of the workforce will be “agile,” according to

the Randstad 2025 Workplace Report.

https://www.randstadusa.com/workforce360/workplace-2025/demystifying-the-future-workforce/

What Will Our Workforce Look Like In 2020?

Staffing Industry Analysts (SIA) reports that 47% of the

workforce will be contingent by the end of 2017, up from

34% in 2015.


http://www.staffingindustry.com/

How is Technology Shaping the Way we Work?

Internet users

surpassed 3

Billion.


Number of

Smartphones will

surpass 2 Billion.

Millennials have

overtaken

Boomers in size.

42 Million US

Workers are 1099

(contract)

employees.

176 Platform

Companies

worth $4.3

Trillion.

63% of Platform

Companies were

founded outside

the US.

Technology Solutions – Enabling Non-traditional Labor

• Allowing Independent Consultants/freelancers to sell their services directly to businesses or consumers

Online Staffing Platforms

• Enables enterprises to self-manage their engagements with independent workers and freelancers

Freelance Management

Systems

• Platforms where organizations store talent they’ve identified or worked with previously

Talent Clouds

BLS is realizing this workforce is here; and challenged with accurate counts of this

workforce; they are developing survey’s to address and accurately count;

https://blog.dol.gov/2016/03/05/measuring-gig-work


https://blog.dol.gov/2016/03/05/measuring-gig-work

TALENT SUPPLY CHAIN

TECHNOLOGY ECOSYSTEM

VMS IC COMPLIANCE AND PAYROLLINGATS

ONLINE STAFFING PLATFORMSSTAFFING AGENCIES

HUMAN CLOUD TALENT POOLS

Employer

Ind. Contractor - 15-50%

W2 Employee – 30-65%Ind. Contractor - 10-15%

W2 Employee – 25-45%

Ind. Contractor - 3-5%

W2 Employee – 18-25%

Per Deloitte’s 2017 Global Human Capital Trends, we are moving away from a

full time workforce and skill requirements to multiple workforces and

technologies defining delivery

https://www2.deloitte.com/us/en/pages/human-capital/articles/introduction-human-capital-trends.html

Freelancer System Demo - Elevate Direct


State and Federal Agencies are changing to adapt…

“Andrew Hunter, director of

the Defense-Industrial

Initiatives Group and senior

fellow at the Center for

Strategic and International

Studies, also said he sees

the potential for a shift toward

more contractors serving a

role in the federal workforce.”

More and more, state and local

governments are turning to

temporary and contract

employees in the wake of the

Great Recession, which left

their workforces shrunken by

some 600,000 workers. Forty-

two percent of human-

resources managers surveyed

in 2015 by the Center for State

and Local Government

Excellence (SLGE) reported

that they were “hiring

temporary or contract

employees.” ~The Uberizing of

government workforce”

www.governing.com

Some state agencies are

already making changes to

their workforce strategy; For

example, the city of Boulder,

Colo., now offers fixed-term

assignments, part-time hours,

flexible scheduling, or

combinations of these

approaches.


Using Contingent Workers Protects Jobs…

Beginning in 2020, workers in

Washington will be eligible for paid

family and medical leave through a

new state program funded by

employee and employer contributions

and received approval to hire

temporary workers to pick up the

slack.

Under the new law, employees who

have worked at least 820 hours in the

past year will be eligible for up to 12

weeks of paid family leave to care for

a new child or a close family member

who has a serious medical condition.


Washington becomes the fifth state to

adopt a paid family and medical leave

program after California, New York,

New Jersey and Rhode Island. Earlier

this year, the District of Columbia also

adopted a paid leave program

Temporary workforce can pick up

slack to ensure continuity for critical

services that impact citizens

Temporary workforce prevents layoffs;

providing flexible options to staff up

and down as demands shift

http://lawfilesext.leg.wa.gov/biennium/2017-18/Pdf/Bill Reports/Senate/5975-S SBR FBR 17 E3.pdf

http://www.governor.wa.gov/news-media/washington-become-5th-state-nation-adopt-paid-family-leave

ROI for Government agencies in using gig workforce

Cost Effective

The Staffing Providers foot the bill for

healthcare costs (which will continue to

climb over the next several years),

unemployment insurance, Social Security,

incentives and bonus’, professional

development, recruitment.


The premium for perm talent is roughly

an additional 50-70% of the

salary. Here are typical costs for a

$50,000 a year employee:

Hiring Costs: $2,500 – $5,000 (might

be lower in state/federal than private

sector)

Benefits: $13,000 (includes healthcare

and retirement)

Paid Time off $5,000

Employment Costs and Taxes $5,000

– $7,500

Total annual costs of employment –

$80,500

Impact of the gig workforce on Worker’s Comp

Mis-

classification

Portable

BenefitsBenefits

2015 Uber agreed to refund Alaska

Dept. of Labor and Workforce

Development Workers Compensation

more than $77K for misclassifying it’s

drivers as IC’s

Think tanks and some tech and

labor leaders have called for truly

“portable” accounts that travel with

the worker no matter how he or she

earns money.

“With Growth of the Gig Economy, States Rethink How

Workers Get Benefits ”~Insurance Journal Feb. 2017

New York State legislators have

considered allowing online platforms,

to pay into a benefit fund for workers

who use their app or website


Corporate/VAT

TaxRegistering

an entity

Customs

Costs

TaxEmployment

Law

Gig Workforce – Importance of Risk Mitigation

Onboarding

Defined

ProcessesAvoid Fines

Process for

Accident

Reporting

Background

and Drug

Screening

Safety and

TrainingCompliance

GLOBAL UNIVERSAL


Regulatory OSHA

Doing More with Less - Benefits of a Direct Sourcing

Reduces cost

Leverages current systems and

processes

Higher quality of talent

Quicker ramp time

More control over hiring process

Better employment branding

Increased manager and talent

satisfaction

Talent is #1! Expand Your Talent Supply Chain

Flexibility

High Quality Talent

Cost Savings


Payrolling Acronyms – Brief Overview

Direct Sourcing

When An Organization With An Open Project

Identifies Candidates For That Role (Contract Or

Full-time) Using Their Own Resources And

Without Engaging A Third Party Staffing Agency

Or Consulting Firm To Perform Recruiting

Functions, They Are Direct Sourcing. This Is

Sometimes Also Called Self-sourcing.

Payrolling

An Arrangement In Which A Company Chooses

Workers, But Asks An Agency To Organize Their

Pay And To Prepare All The Official Documents

Needed When Hiring Workers.

Employer Of Record (EOR)

The Entity That Serves As The Employer For Tax

Purposes While The Employee Performs Work

For A Different Company. The Employer Of

Record, Often Referred To As The W-2 Employer

Of Record Because They Are Responsible For

Issuing W-2s To The Employee, Shoulders The

Responsibility For All The Traditional Employment

Tasks And Liabilities.

Professional Employer

Organization (PEO)

Is A Firm That Provides A Service Under Which

An Employer Can Outsource Employee

Management Tasks, Such As Employee Benefits,

Payroll And Workers' Compensation, Recruiting,

Risk/Safety Management, And Training And

Development.


Payrolling Solutions – How They Support Your Business

Comprehensive Risk Mitigation

Contingent workers are fundamentally different from full time, permanent employees. payrolling services can eliminate a variety of potential business risks:

• Unemployment insurance modification rates are protected company wide as all UI experience belongs to payroll company

• Worker’s compensation modification rates are protected company wide as all WC experience belongs to payroll company

• 401k discrimination testing is taken on by payroll/benefit company.

ACA compliance

Part time, on-call, seasonal, or unique work assignments can be very difficult to manage from an ACA standpoint. IES’ payrolling services take full risk and responsibility for any potential ACA related fines

1099 Risk Elimination

Engaging 1099’s (IC’s) can be a very risky proposition for employers. The IRS is actively pursuing companies who are misclassifying workers. Utilizing IES’ payrolling services moves your IC’s to our payroll as W-2 employees and completely eliminates any potential risks of 1099 misclassification fines and penalties that can be catastrophic in size and scope


Payrolling Solutions – Employer Of Record

California

W2 Social Security 6.20% 2017 Govt Rates Medicare 1.45% 2017 Govt Rates Fed Unemployment 0.60% 2017 Govt Rates State Unemployment 3.40% 2017 Govt Rates Workers

Compensation 0.5% 8810 Of f ice Admin Note:

WC will v ary based on

worker ty pe Total Burden 12.15% Admin Fee 5-9% Total Fee 17.15 – 21.15%

Payrolling or “EOR”

(Employer of Record)

Shoulders the responsibilities

for all the traditional

employment tasks, liabilities,

tax payments

Typical costs charged to

organizations to provide these

services must cover pay rates

plus state and federal taxes,

workers compensation, admin

fee. For example:

*Workers comp costs can vary by

state and comp code (ie industrial

can be between 4-12%)


•Workers’ Compensation

•General liability

•Employer liability

•Medical, dental,

vision, and life insurance

•401k plan

•Direct deposit

•ACA Compliance

•Paid Sick Leave-Varies

•Online timekeeping

•W-2 administration

•Process unemployment

and workers’ comp claims

•Pay all federal and state

employer taxes

•Withhold employee taxes

•Pre-employment background

checks and drug screens

•Independent Contractor/1099

compliance evaluations

•Online HR Resource Center

•Compliance in all 50 states

•International Payrolling Partner

•Weekly, Bi-Weekly, Semi-

monthly or Monthly

•Top Secret facility clearance

Payroll

Funding

and

Processing Employment

Insurances

Employee

Benefits

Risk

ManagementSecurity

Clearance

Processing

Nationwide

and Int’l

Capability

HR Record-

Keeping

Taxes


Payrolling

Services

Payrolling Solutions – Employer Of Record

All the key components they must cover

Being a Contractor / Consultant

means you are running a

Small Business

How IC’s (Independent Contractors) Must Operate to

Ensure Continued Employment with Organizations

Things to Considers: Corporate & Tax Structure

Risks – Financial & Others

Control over day to day Work

Ownership of Tools of the Trades

Investment in Business & Marketing

Contractors must think like they are

running a “Brick & Mortar”

Small Business


Misclassification & Co-employment Issues are on the Rise



5 Point I.C. Compliance

Vetting & Audit

File Creation

Business

Registrations

& Tax IDs

Contract

Language

Proof of

Marketing

Proof of

Insurance

Other

Documents

Independent Contractor Risk Mitigation Methodology- (Ic Compliance)

PMO (Program

Management Office)

Technology and Support

Strategy & Consulting

Data and Analytics

Talent Supply Chain (Direct

Sourcing, IC's, Contractors

(Staffing Partners)

Global Workforce

Intermediary

Worker Lifecycle

Management

Total Talent Management

Contractor,

Gig,

On-Demand

VMS, ATS, Digital

platforms

An ecosystem is a network of

companies, individual

contributors, institutions and

customers that interact to create

mutual value,” according to the

Boston Consulting Group. The

ecosystem approach is enabled

by a Technology-based

infrastructure, allowing

businesses to procure and

consume work in different forms

with end-to-end support. It

provides access to smart people

and more resources to drive

speed and innovation.


Gallagher and Consultants

Workforce Solutions Ecosystem Model TM

https://www.bcgperspectives.com/content/articles/information_technology_strategy_digital_economy_age_digital_ecosystems_thriving_world_big_data/

The New Normal “Gig” Workforce Mix

Permanent Employees

Independent Consultants

Contract Labor

Direct Sourcing (retirees, self-sourced

talent, payrolled)

The “Fluid” Workforce

Today, we are moving to a flexible organizational structure; now it’s about co-creating rather than

managing. With artificial intelligence and data at workers’ fingertips, more decisions will happen

on the front line, where work occurs. Per Accenture’s Technology Vision 2016 report, there will be

a “fully liquid enterprise “operating with no full-time employees outside of the C-suite.


https://www.accenture.com/t20160314T114937__w__/us-en/_acnmedia/Accenture/Omobono/TechnologyVision/pdf/Technology-Trends-Technology-Vision-2016.PDF

Takeaways

The workforce landscape

has changed; there is a

significant need for state

agencies to look at

integrating alternative

staffing strategies into their

total talent attraction

strategies.

Technology Evolution is

enabling organizations to

connect directly to talent,

less layers; there are multiple

technology platforms to

choose from

Risk Mitigation is an

important deliverable with

these solutions; the risk for

non-compliance must be

considered but can be

mitigated with these new

solutions

An Ecosystem Approach

in Talent Strategies

leveraging the right

expertise, technology, and

solutions is key to today’s

modern workforce

strategies.

State and Government

Agencies are turning to

temporary and contract

employees in our “new

normal” workforce landscape


Leveraging Alternative

Staffing Strategies expands

your talent supply chain

options and enables a

flexible workforce than can

protect jobs and possibly

mitigate lay-offs

Payrolling

Firms

Resource Contact Information


Contingent Workforce SolutionsJeff Nugent, Managing Director

[email protected]

Innovative Employee SolutionsSean Ring, BD [email protected]

mailto:[email protected]

mailto:[email protected]

THANK YOU!

Email: [email protected]

Office: + 704-620-2483

Skype: Terrig4221

Web: www.gallagherandconsultants.com

Twitter: @gallagherandco1

LinkedIn: linkedin.com/in/terrigallagher

Terri Gallagher

President/CEO

Gallagher and Consultants

How Government Agencies can Leverage the Gig Economy · 2017-11-09 · TALENT SUPPLY CHAIN...

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