How Do you Manage The Risks of an On-Demand Workforce?

Do you ever think of the on-demand workforce?  New advances in digital technology are making traditional workplaces a thing of the past. While many workers now have the option to work remotely outside of their office, many businesses are beginning to adjust their workforce models to take advantage of a more agile contingent approach.

According to research by IDC, the mobile worker population is now made up of more than 1.3 billion people, which is 37.2% of the global workforce. Meanwhile, contingent workers now make up 20% of the Australian workforce, as freelancers, consultants, and contractors continue to take the place of full-time employees.

Massive growth.

The massive growth in the on-demand workforce is giving organisations greater agility but they need to be aware of the risks. The recent case of a rogue contractor in Queensland illustrates the worst-case scenario for a small business. When a small trade business trusted the contractor with a work truck and a company credit card, he stole the truck and racked up a $23,000 bill at Bunnings. To make matters worse, Bunnings then claimed the business owner was liable for all of the transactions.

The lesson here is clear – regardless of whether you consider a contractor, freelancer or consultant one of your employees in the technical sense, by law they are your responsibility. That’s why employers need to investigate and understand how they plan on adapting their recruitment, and in particular their screening processes, to reflect the changes brought about by the on demand workforce.

We know that the shift in the global workforce is being reflected by many employers reducing their screening practices. But there needs to be a realisation that the matter how you classify an individual on your own books, they are a representative of your brand, so they’re just as capable of causing significant damage as one of your own employees. In fact, well-known businesses that rely on a contingent workforce such as Uber and Lyft have suffered some of their biggest PR disasters due to negligent and criminal behaviour by their contractors.

Application of standards.

Also important to remember is that employers need to apply the same standards to a position that will be filled by a nontraditional worker, or else they could be subject to allegations of biased treatment of contractors over full-time employees – a potential minefield considering Australia’s industrial relations legislation still prioritises traditional employment contracts.

Ultimately though, employers need to remember that background screening of on-demand workers is a mandatory part of their due diligence. In the years to come, many precedents will be set for cases of negligence where organisations haven’t exercised reasonable care in determining if a contractor or freelancer is unfit for the position.