U.S. Secretary of Labor Tom Perez's announcement last month reinstating the contingent worker survey of the U.S. census—absent since 2005—should help better understand the true size and scope of the on-demand economy in America. The range of estimates about the number of contingent workers in the US workforce varies widely, with most recent data coming from studies commissioned by freelance management firms and other service providers in the gig economy. According to findings from a 2015 Freelancer Union survey, roughly 54 million people, or one-third of the civilian labor force, engage in some form of freelance, contingent, or “gig-economy” work. 

When it is released in the spring of 2017, this new data will offer welcome and important insights about the true size of the gig economy. In the meantime, innovation will continue as gig workers and employers figure out how to adopt on-demand technology that is beneficial for both. 


Arriving at this successful arrangement will include granting contingent employees access to benefits that have been traditionally reserved for full-time employees. Why? Because it's no secret that the landscape of work has undergone a tectonic shift. Many benefits that full time employees have taken for granted — medical, retirement, vacation, workers comp and other benefits - are now no longer coupled with a single employer who employs us for years or decades. Benefits, like work itself, need to become more flexible and portable.  

The Coming Age of Portable Benefits

Working independently has often meant forfeiting the safety net many of us rely on. But the rise of portable benefits solutions means that we shouldn’t have to make this tradeoff. Today's workers can enjoy the flexibility and autonomy of contingent work while still enjoying the peace of mind afforded by benefits like health, disability and unemployment insurance. 

One idea for how this could work is via a "shared security account," where workers could earn or accrue benefits via automatic payroll deductions from multiple employers. These benefits would be portable and universal, and they would also be prorated—on an hourly or equivalent basis—based on the value of full-time benefits. 

We're already seeing bipartisan moves towards a similar approach in Washington. President Obama's  2017 budget, released earlier this month, includes a proposal to make it easier for workers who change jobs frequently to combine multiple retirement accounts, as well as plans to test more portable retirement accounts. Importantly, permitting small employers to pool 401(k) plans is also under proposal. Ideally, such pools would provide economies of scale that would shave administrative costs for employers who could then pass along those savings to their workers. 

Benefits for Older Workers

The development of portable benefits could be especially important for older contingent workers who are retired from the traditional workforce, many of whom have stepped away from full-time first careers and face serious worries over their recession-shrunk retirement accounts on top of rising healthcare costs as they age. 

An estimated 30 percent of today’s on-demand workers are 60 years of age or older, and contingent opportunities will only grow more attractive to this age group when portable benefits sweeten the pot. While older Americans enjoy better health and greater happiness than their non-working peers, the benefit isn't limited to themselves: employers profit from the deeper experience and lower absenteeism that older workers offer relative to many of their younger counterparts. 

Benefits Outweigh Costs

It is true that a new portable benefits model will undoubtedly add costs over time to employers of gig laborers. While it's tough to predict how much that increase will be, I believe it will be minimal— particularly relative to full-time hires, which typically cost 20% to 30% more than independent contractor hires. Further, benefits like affordable health insurance and workers comp may be the very thing that allows the on-demand economy to grow, for the benefit of both workers and employees. 

With the explosion of on-demand platforms by which people can work more flexibly and earn multiple streams of income, we have already shown that we have the technological ingenuity to create an ecosystem for the new freelance. As a country of innovators, let's focus the same energy on making the on-demand workplace a sustainable option for workers as well as employers.

Hale is CEO of Gigwalk, a mobile platform for managing large distributed workforces.