In 2018, the U.S. Department of Labor reported that one in 10 workers were independent contractors. Others claimed the number was closer to one or two in five and predicted that, over the next decade, the total amount of independent workers could jump as high as 50%.
As we begin to settle into the 2020s, the message is clear: These non-employee workers, variously classified as 1099, freelance, contingent or gig workers, will continue to play a vital role in the national workforce, especially as more organizations embrace this employment model. And with growing numbers of contingent workers comes an escalating need for technology that tracks and manages them.
From ride-sharing apps like Uber and Lyft to comprehensive suites of onboarding and risk management software, tech is playing an ever-increasing role in managing various types of non-employees and providing platforms for workers and companies to find one another. Are you taking advantage of these technologies? Are you prepared to capitalize on trends when they emerge fully realized into your field? If not, you should be.
The biggest tech trends for 2020
Typing “biggest tech trends” into Google provides endless lists about artificial intelligence, blockchain and Internet of Things. While each of these topics will influence how we do business as they create a more dynamic, interconnected world, many of those changes are happening passively, in other industries or in the background, whether you choose to adopt them or not. The real question is how to take these trending technologies and use them to ensure the best long-term results for your business.
The answer is embracing tools that enable flexible work models. Contingent and traditional employees alike are demanding tools that allow more flexibility, and these tools also let you place the right people in the right roles, no matter where they work or what they do. This means video conferencing, cloud-based collaboration tools, and AI assistants to tie it all together while personalizing the individual experience. But it also might mean leveraging wearable devices that enable more comprehensive communication with and management of independent contractors.
You may be thinking, these tech trends all sound great on paper, but my organization is too large and complex to leap on every trend—or maybe my organization is too small to afford it. Believe it or not, there are tools that deal specifically with the intricacies of aligning entire workforces.
Should I use a total workforce solution?
Considering that contingent workforce growth does not appear to be slowing down anytime soon, a variety of new and emerging technologies are being developed to assist in this growth. While managed service providers and vendor management systems have been around for a while, we can expect to see more organizations begin to rely more on software to keep track of contingent workers.
Total workforce solution (TWS) software, which attempts to streamline processes for hiring and managing both W-2 and 1099 workers, blend full-time, part-time and the various contingent labor classifications into a single, unified workforce. As a result, TWS platforms can provide a big-picture understanding of hiring needs for combined workforces, but they can create risk as well.
How? First, a TWS can allow organizations to:
- Source full-time or temporary 1099 workers in a single program.
- Reduce silos created by traditional employee management models.
- Enhance organizational agility by updating legacy technology.
As you can see, there are some advantages to using a TWS, but trying to manage full-time employees and independent contractors in the same system opens a company up to misclassification lawsuits, meaning separate systems are still desirable. Regardless of how you look at it, platforms that streamline hiring decisions will continue to grow, and we can expect them to become more mobile as the workforce does the same, especially in industries like logistics and delivery.
Contingent labor in transportation
One of the biggest changes in the logistics and delivery industries is the increase in the contingent workforce’s tech-savviness and the number of consumers expecting more from supply chain fulfillment. Most people have smart devices, and most consumers expect fast shipping and a process over which they have more power than in times past.
Both pressures are creating a ride-share model for trucking, giving clients more control over delivery time while providing consumers with multiple fulfillment options. More trucking agents will become freelancers as platforms are developed to connect consumers and companies that offer unique delivery options.
Ultimately, these changes will allow for a more flexible and responsive transportation industry. But, as mentioned before, they may also create more chances for noncompliance and litigation.
Compliance in the digital age
In everything we do, there is a spectrum of flexibility and risk. The more adaptive and agile something is, especially in business, the more susceptible it is to imbalance. In short, an increasingly flexible workforce has many benefits, but it also increases risk, as we see with legal trends like California’s AB5.
Laws like AB5—and similar legislation in states like New Jersey—make it harder to classify a worker as an independent contractor. As a result, there is a critical need for technology that helps provide a solution. We need something that structures and documents the professional link between contracting companies and independent contractors as the compliant, business-to-business relationship it is.
By forging strategic partnerships with solution providers, contracting companies can get ahead of this threat before it becomes a serious problem. Openforce is one such provider, leveraging nearly 20 years of experience in onboarding and staffing compliance to ensure you can effectively implement best practices designed to strengthen your workforce model. Our onboarding, insurance, and compliance offerings allow you to manage contractors without worry or hassle.
Ultimately, independent contractor management will continue to develop throughout the 2020s as more of the workforce begins to participate in gig and freelance work. Technology will not only continue to drive this behavior as companies and employees find this model of work beneficial, but also continue creating spaces for solutions that make these relationships easier. Staying ahead of the curve by keeping up with these trends and forming partnerships that matter will be the true challenge for leaders in the coming decade.
Openforce is the leader in technology-driven services that reduce operating costs and mitigate risk for companies using independent contractors. Our cloud-based applications help companies and contractors alike achieve more sustainable, profitable growth by removing financial, operational, and compliance barriers to getting business done.