Terri Gallagher - Gallagher and ConsultantsNovember 3, 2017
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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.
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AGENDA
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$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
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$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.
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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
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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
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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).
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By 2019 it’s estimated that up to 50 percent
of the workforce will be “agile,” according to
the Randstad 2025 Workplace Report.
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.
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How is Technology Shaping the Way we Work?
Internet users
surpassed 3
Billion.
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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
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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
Freelancer System Demo - Elevate Direct
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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.
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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.
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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
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.
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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
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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
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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
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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.
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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
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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%)
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•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
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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
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Misclassification & Co-employment Issues are on the Rise
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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.
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Gallagher and Consultants
Workforce Solutions Ecosystem Model TM
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.
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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
COPYRIGHT © 2017 · GALLAGHER AND CONSULTANTS · ALL RIGHTS RESERVED 30
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
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Contingent Workforce SolutionsJeff Nugent, Managing Director
Innovative Employee SolutionsSean Ring, BD [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