Small Businesses

Study: Businesses Are Opting for Freelancers to Dodge Health Care Fees

Study: Businesses Are Opting for Freelancers to Dodge Health Care Fees
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For some businesses, the Affordable Care Act isn’t turning out to be so affordable.

According to a study by Field Nation, an online work platform, and Future Workplace, an executive development firm, the law commonly known as Obamacare is leading companies to hire more freelance workers rather than bring on more in-house staff. The study includes responses from 600 representatives in HR and 959 freelancers.

Since 2016, health care fees including the tax penalty for having uninsured employees increased because of the act, causing 74 percent of companies to opt for freelance hires instead, the study says. In fact, 60 percent said they planned to hire more freelancers in place of full timers.

Related: 4 Steps Needed for Affordable Care Act Compliance in 2016

“The trend of companies hiring more freelancers will continue annually, causing for an even more blended workforce, and creating new challenges for business leaders,” says Dan Schawbel, partner and research director at Future Workplace. “The workforce is willing to make sacrifices, including compensation and benefits, in order to gain the freedom and flexibility afforded to the freelance career path.”

The blend of full-time and freelance employees seems to be cultivating a rise in the discoverability and availability of freelancers, sourced through different mediums including a variety of online platforms. And though most companies agreed benefits were the key to attracting desirable employees, nearly one third of them are eliminating their benefit plans because of fees associated with the new health care policies.

“Spurred by competitive demands for more agile organizations, the world of work is pivoting to a blended workforce,” says Mynul Khan, CEO of Field Nation. “The combination of enabling technologies, societal attitudes, increased mobility, high workforce dissatisfaction, and the war for talent is disrupting the classical employer-employee model.

Khan says "nearly 40 percent of top performing firms already have more than 30 percent of their labor force composed of contract/freelance workers."

Related: 4 Hacks for Lowering Health-Care Costs While Improving Employee Health

To strike the right balance between virtual and in-house jobs, teamwork and communication have proved to be vital. And though most survey respondents said there are benefits in working with freelancers, such as flexibility, urgency and specific skills, some also indicated a few downfalls. For example, without a direct connection, availability, a confirmation of technical capabilities and a consistent brand experience are left up in the air.

The uncertainties bring on a host of new policies such as multiple evaluations throughout the year, as well as a closer look at work and interactions that are rewarded with bonuses, stronger contracts and higher pay per project.

Edition: November 2016

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