PEOs and the Gig Economy
Fixed working hours. Adhere to organizational hierarchy. Long careers at one organization. The traditional workforce is structured with a single employer at the top and multiple workers following a hierarchy below. Conversely, the gig economy is defined by flexibility. Flexibility in working hours. Flexibility in the location. Flexibility in the commitment.
From freelancers to independent contractors, the McKinsey Global Institute report on the gig economy states that 20-30% of workers in Europe and the US are a part of it. According to Upwork/Freelancers’ annual report, 36.7% of workers in America did some freelance work in 2017. As it can benefit both employees and employers, it is safe to say the gig economy will grow over the next decade. However, it is wise to be wary of the challenges that come with the gig economy.
When engaging workers in a new country, employers must be prepared. Employee expectations and their credibility can be difficult to navigate without experience in that country. Finding the available candidates can even pose a challenge.
But even for companies that have experience, one of the most significant challenges of working within the gig economy is compliance. From taxes to contracts, handling the compliance of overseas employees is almost always a complex task. Further, managing the employee’s HR, payroll, and compliance requirements on a day-to-day basis can be endlessly time-consuming.
A PEO provides a unique position to leverage the benefits and reduce the disadvantages of working within the gig economy. PEOs specialize in comprehensive employment services for both the employer and the employee. Its services encompass payroll administration, compliance and HR management.
In this model, gig economy workers are employed via the PEO; they walk and talk like you, but the PEO handles everything from hiring, payroll, benefits and more.