High Risk, High Reward (Part 2): the challenges and potential solutions for flexible workers

Read the first instalment “High Risk, High Reward (Part 1): 5 reasons people are choosing temporary work” here.

The UK labour market has experienced a structural change; flexible working is here to stay with freelancers, contractors and agency workers contributing to an increasing percentage of the modern workforce. We have already explored workers' motivations for this kind of work, and it is important to consider the pitfalls, risks and challenges of electing to bypass traditional permanent employment.

1. Job and income security

Whilst there may be opportunities for higher earning potential, flexible working can struggle to provide the same consistency of income and employment of permanent working. The frequency and duration of employment will vary and for many, continually searching for their next job is a daunting prospect.

Income fluctuation makes financial planning difficult and can leave people feeling vulnerable. There are security issues to consider, as a temporary worker's ‘psychological contract’ (the perceptions of the two parties, employee and employer, of what their mutual obligations are towards each other) leaves room for interpretation and confusion.

2. Vulnerability

With the responsibility of negotiating and re-negotiating contracts, passive individuals who lack the natural resources to effectively promote themselves are at a major disadvantage. Of those who do get employed, large percentages are unclear about their rights; in fact, in a recent agency working focus group, only 1 in 25 understood where they stood.

Further vulnerability stems from tax issues, as managing your own tax can be difficult due to the complicated regulations. In addition, independent workers miss out on tax free expenses that companies pay their employees.

3. Training and progression

With no permanent position held, promotions are rarely possible. Many managers are reluctant to invest money or time into developing and training ephemeral employees.

When flexible workers begin a new role, some companies overlook a proper induction and by failing to comprehensively introduce new employees into the business, flexible workers can start off on a weak foot, unable to feel satisfaction and loyalty to their company. This can impede productivity.

4. Job satisfaction

The lack of a sense of belonging can put a strain on the employee/employer relationship in a way which is not necessarily the case for permanent staff. Contractors often testify to being allocated the majority of the hardest or dullest tasks, exacerbated by the ‘domino effect’ of other employees following the example set by management. This is likely to isolate temporary staff and create an ‘us and them’ divide.

Solutions?

This relationship should work for both parties, alleviating these challenges to enjoy the benefits. If companies invest time, money and effort into temporary workers, then in many cases they will reap the benefits of a loyal, satisfied and committed individual with an increased productivity.

Three parties that can help be part of the solution are:

Recruitment Agencies:

• Have a vital role as a broker between candidate and employer who can help address power imbalance
• Provide information and access to training, manage paperwork and endorsements for mortgages etc.
• Explain income/tax liabilities and employee rights and responsibilities
• Go the extra mile by offering career support and advice

Employers:

• Provide thorough inductions for temporary staff as part of the integration process
• Evaluate and give feedback
• Encourage and motivate just as they would their permanent employees
• Lead by example
• Provide training and development opportunities

Government:

• Commission independent parties to provide income protection information
• Offer Universal Tax Credit, can explain the tax system and provide guidance

Facts and figures taken from: Recruitment and Employment Confederation (REC) Report – “Flex Appeal: Why freelancers, contractors and agency workers choose to work this way”

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