On today’s episode of the RecruitingDaily Podcast, William Tincup speaks to Sara Jensen on from Innovative Employee Solutions, or IES, about engaging contingent workers by ensuring a robust benefits package.
Some Conversation Highlights:
What kind of trends are you seeing with the companies?
And these individuals are also looking for top benefits to have a lifestyle where they can create their own career as a contingent worker and take on the projects that they want and still feel like they have solid benefits to fall back on. So the best way for a company to look at how they can provide benefits to this type of workforce is to look at who they have as their vendor partners. What third party agencies are they using to hire these workers, and what benefits are they providing?
Because the end company where the worker is doing the work for, they’re not going to be providing the benefits. It will be their vendor partners who will be, as the legal employers. And so they want to ensure that those companies have a robust benefit package.
Do they have comprehensive health benefits, dental, vision, an FSA plan, an employee perks plan? All of those things are things that when you are a worker, you want to make sure that you can enter into a robust plan. And companies that partner with vendors who have this available to workers will really have a leg up.
Tune in for the full conversation.
Listening time: 32 minutes
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Sara Jensen is the Senior Vice President of Growth and Strategy at Innovative Employee Solutions, a leading global provider contingent workforce solutions, specializing in employer of record payrolling and independent contractor compliance services. Founded in 1974 in San Diego, California, IES has grown into one of the city’s largest women-owned businesses and been named one of its “Best Places to Work” for nine years in a row.
Music: This is RecruitingDaily’s Recruiting Live Podcast, where we look at the strategies behind the world’s best talent acquisition teams. We talk recruiting, sourcing, and talent acquisition. Each week, we take one overcomplicated topic and break it down so that your three-year-old can understand it. Make sense? Are you ready to take your game to the next level? You’re at the right spot. You’re now entering the mind of a hustler. Here’s your host, William Tincup
William Tincup: Ladies and gentlemen, this William Tincup, and you are listening to the Recruiting Daily Podcast. Today we have Sarah on from Innovative Employee Solutions, or IES, as they’re known. And we have a wonderful topic to explore, engaging contingent workers by ensuring a robust benefits package. So can’t wait to talk to her about it. Sarah, would you do us a favor and introduce both yourself and IES?
Sarah Jensen: Sure. Thank you for having me. Hi, everyone. My name is Sarah Jensen. I’m the VP of Growth and Strategy for Innovative Employee Solutions. We do go by IES for short, and the bottom line of what we do is we enable companies and staffing agencies that we partner with to stay competitive, stay compliant, and reduce their risk by providing seamless and secure employer record, payrolling, and independent contractor compliant services in over 150 countries.
William Tincup: Well, that’s fantastic. So I’ve not heard of the before, with contingent labor or contingent workers. Obviously, I think few people understand full-time employment and benefits that companies provide there, although I would like to get your take on what’s changed there, as you probably have some insight there, maybe even some part-time. I think Starbucks years ago did things with the part-time employees and gave them a certain level of benefits. I don’t think it was a full thing, but I haven’t really heard of folks really … And this is just a wonderful way to engage with this talent, this group of talent. So take us into this world. Just what type of workers are these? And then we’ll just start unpacking the benefits.
Sarah Jensen: Sure. So really, the contingent workforce encompasses all type of workers that are not considered the full-time permanent employees of a company. So it could be temporary employees, it could be independent contractors, gig workers, project-based workers that come on maybe for six months at a time. So there’s a lot of different ways that companies engage. They’re also known as external workers, and typically the company who is engaging them is using third party vendors to either find the talent and hire them, or they’ll use a company the like IES for payrolling services, where they have already identified who they want to use, but they really are looking for a partner to legally hire employee and provide the benefits for this fluctuating workforce.
William Tincup: I love that, too. Folks might be thinking of Uber Eats or Grubhub or Lyft or something like that. That is truly gig work. I’m not using those companies, I’m using them as examples for the audience to understand the types of workers and the types of jobs, potentially, that they’re doing. So employers want to give them benefits. Well, where do they start? What type of benefits do the workers want and need? And what kind of trends are you seeing with the companies?
Sarah Jensen: Sure. So certainly, the examples that you gave for gig workers fall within the contingent workforce, and it’s also the subject matter experts, very highly skilled software developers, as an example, who are coming on for a particular project, maybe for six months to nine months. And it’s really top talent that companies are wanting to recruit and engage. And these individuals are also looking for top benefits to have a lifestyle where they can create their own career as a contingent worker and take on the projects that they want and still feel like they have solid benefits to fall back on. So the best way for a company to look at how they can provide benefits to this type of workforce is to look at who they have as their vendor partners. What third party agencies are they using to hire these workers, and what benefits are they providing?
Because the end company where the worker is doing the work for, they’re not going to be providing the benefits. It will be their vendor partners who will be, as the legal employers. And so they want to ensure that those companies have a robust benefit package. Do they have comprehensive health benefits, dental, vision, an FSA plan, an employee perks plan? All of those things are things that when you are a worker, you want to make sure that you can enter into a robust plan. And companies that partner with vendors who have this available to workers will really have a leg up.
William Tincup: Immediately, I think of health benefits. But I’m sure it’s more than that. So where do you see the most bang for the buck for both parties, for, again, the employers trying to recruit this talent and engage and retain this talent, and then also the other side? What do you see the biggest bang for the buck?
Sarah Jensen: I think, to your point, the biggest bang for the buck is looking at health benefits. Is there a rate medical health plan as well as dental and vision? We really are in a worker centric market right now, and so having a bare-bones benefit plan just to meet the minimum requirements of the Affordable Care Act is not really cutting it anymore. You need to have a strong health benefit plan that has medical, dental, and vision. And then if there are supplemental benefits on top of that, then that just really creates more of a well rounded, robust, overall offering that will be attractive to a contingent worker.
William Tincup: It’s interesting because, like you said, a robust talent market, this is supply and demand, right? So demand is high for this type of talent. And so it’s important, you’ve got to change your playbook.
Sarah Jensen: Absolutely.
William Tincup: If your playbook was just full-time only, or maybe part-time or whatever, you’re probably missing out on a bunch of talent, and obviously looking at health benefits as a way to engage. Okay, so let’s deal with outside of health and how health and medical, I guess, dental, vision, et cetera, what are some of the other things that you’re seeing the workers want or desire from employers?
Sarah Jensen: So with the pandemic in 2020, all companies had to really quickly find out how they could adjust to a remote workforce. And once everyone was working from home and they realized that they can be just as productive, a lot of companies and workers found that they really liked being remote. And I’m not saying that’s the case for everybody, but I know for our company, in particular, and many others that we talk to, enabling a remote work lifestyle is something that is very attractive and almost required, in certain cases, for the workforce now. So being able to enable a location agnostic employment, enable either a hybrid approach to your workforce or a remote workforce is really something that a lot of individuals are looking for when they’re looking for work, whether it’s permanent full-time or contract contingent work.
There are many people who, if they are forced to go back to the office, will decide that they don’t want to do that, and they’ll look for other opportunities. So really, it is a competitive market out there. And if you don’t have a strategy as a company to enable remote work, then you really will be falling behind in getting that top talent. So I think that’s very closely maybe the number one item to be able to have as a strategy to attract and retain top talent is having a remote workforce strategy, having really robust benefits, whether it’s your permanent workforce or ensuring that your suppliers have great benefit. For the contingent workforce, that’s a top priority.
And then I would say the other couple of things to keep in mind is having strong tech in your HR processes. If you are falling behind the times in how you engage these workers from an onboarding perspective or the day-to-day tools that they’re using, that’s going to be something that is going to create a non-desirable work experience. So I would pay attention to your tech and your HR solutions as well as looking at your diversity and inclusion policies and initiatives for your company, both for your permanent workers and your contingent workforce. As I said, it’s a very competitive market out there, and workers really care about the initiatives that a company cares about. And if they don’t feel aligned with that company, then they will look for other opportunities with companies that they do feel more aligned to.
William Tincup: So one thing I want to unpack for folks is when you say they’re going through a third party, which could be an RPO, staffing firm, et cetera, to ensure that they all have good benefits, what if they don’t? What if it’s Staffing Firm X, and either they don’t have benefits, provide benefits, or they don’t provide a robust benefit plan? What’s the recourse for the employer?
Sarah Jensen: So I think there’s a couple of different ways that you could evaluate the benefits of their relationship. If they are providing top talent already, but it’s starting to wane because their benefit package is hurting them, but you really feel like you have a good partnership with that company, then having a conversation with them to say, “Hey, here’s what we need to see in terms of enhancing your benefit package.” And then, of course, leaving it to them to do their own research to see what types of benefits they might be able to get and engage through their own insurance broker and come to the client to say, “Hey, here’s what we think we can do,” that, of course, will have costs associated with it.
So if a company is asking its supplier partners to amp up their benefit offerings, then they have to also be willing to look at any potential increases in cost for the company to set an enhanced benefit program up for their workers, and really doing kind of a cost benefit analysis to say, “Hey, this might mean a higher markup for engaging this talent.” But what does that mean for us for shorter time to fill, having higher quality talent, producing more in the work that is being engaged for these workers?
William Tincup: What’s the current state of a regional staffing firm? Just Manpower and Randstad, and Adecco, and all those folks aside, but just a regular regional staffing firm. What’s the setup right now? Because it’s been 100 years since I’ve used this type of firm myself. It’s a bit dated, but I don’t remember them offering any benefits at all.
Sarah Jensen: Sure.
William Tincup: So first of all, I want to start with my data is old, so there you go. Stated and covered. But what is the current state right now for staffing firms?
Sarah Jensen: So I think it varies quite widely with the advent of the Affordable Care Act. Most staffing companies now have to offer some type of health benefits, and that could be … In the industry, it’s called a MEC plan. It’s basically a minimum viable plan that is required by the Affordable Care Act. Some companies will just offer that, which is very cost effective for the workers as well as the end client. However, in terms of what the enrollment actually is, I would imagine it’s quite low. And other companies will have better than the minimum viable plan and will have a basic comprehensive medical plan that they offer. And again, other companies will have more of a robust suite of benefit offerings, IES being one of them, where we have a medical, dental, vision, and a suite of supplemental benefits, including ability to enroll in 401k and FSA plan, and a suite of other items.
So it really, I think, depends on the company. But what I will tell you is that back to my point about companies who want to partner with vendors that have robust plans, you have to be willing to have that conversation to say, “Okay. Here’s what we have to offer, and if you want the most robust plan that we can offer, then that means it’s X percent more in the markup.” So having some options to present, I think, helps so that you have a range of benefit options that can be incorporated into your program, and it gives the end client a little bit of say as to how much they want to contribute towards the cost.
William Tincup: I love that. Okay. So how has this impacted what we classically thought of as open enrollment? It’s usually December-ish for January 1st, and June-ish for July, for somewhere in there, with companies working direct, let’s say, instead of working through a third party. If they’re working direct with this group of talent, and again, it’s going to be coming and going, I would assume at different times, not nicely compartmentalized in that June and December timeframe. So how do they handle open enrollment these days?
Sarah Jensen: So if they’re hiring these workers direct, hopefully they have a very strong benefits broker to help them with all of the onboarding and off-boarding of workers as they become eligible for benefits and then as their assignments end. I would say that’s one of the perks of having strong third party vendors to act as the legal employer for the contingent workforce, because it really frees up the end client’s time to be able to focus on their permanent workforce, and their partner can focus on the contingent workforce. Because, to your point there, it’s not everyone enrolls in one timeframe. There’s still an open enrollment period, but then as workers are coming off and on throughout the year, they have the ability to enroll within the first 30 days, as an example, of their assignment.
There’s a lot to manage when you’re talking about benefit eligibility for the contingent workforce. You might have some that are working full time. That’s very clear and cut and dry. You might have some that are working part-time that won’t be eligible for benefits. And you may have some that the company doesn’t know how many hours per week they’re going to use them because they might be working 50 hours for two months and then work will wane, and they are only working for 15 to 20. So there’s a lot of work that has to be done to track those hours, to determine if those workers are eligible for benefits, according to the Affordable Care Act. So having a really strong partner to manage that for you creates just peace of mind from a compliance perspective that the workers are being taken care of and being offered benefits in a way that is abiding by the laws.
William Tincup: Right. So I went through a Taco Bell a couple weeks ago from my son, and at the menu, it said, “Start a shift today, get paid today,” which I found fascinating that the people making the tacos for my kids weren’t certified or trained in a substantive way. But so it also shows you the talent market. I’m not picking on Taco Bell. [inaudible 00:17:25] anywhere, really. But the idea is that you can actually get the job today, start today, get paid today. First of all, have you seen an instance like that as well?
Sarah Jensen: Well, I think right now, because talent is so hard to find and workers are being choosy about where they work, there’s a lot of creative incentives that companies are coming up with to attract that talent, more so than I think I’ve ever seen in the past. There’s sign-on bonuses. There’s, to your point, “start today, get paid today.” So I think we’re seeing a lot more creativity in how to attract talent and retain them. Get paid as you work. So I’ve seen a lot of that in the last year, definitely where the sign-on bonuses have been the most relevant, I think, or I’ve seen that the most, very attractive sign-on bonuses. The “Pay for the day that you work.” I’ve seen that a little bit less, but it’s still something that I think is increasing in popularity, especially as tech is enhancing with how workers are engaged.
Technology is enabling much more these really creative ways to utilize talent. So it’s, “Hey, pick up a shift today, you get your pay today, and then tomorrow maybe you work for a different company, and you can pick up a completely different type of work or type of shift,” that gig worker mentality where it’s like an Uber, but it’s all of these different platforms that companies are using to say, “Hey, I need two people to come in today and help me with five hours of work,” and if you have that background and skill, then you can get hired that day, do your work, get paid, and then move on to the next thing. So it’s really interesting.
William Tincup: I love it. So either through third party or direct, what do you think is the minimum? Not in the terms of the benefits package that’s available, but how long do they need to either commit to work or work for you, et cetera? Is it 30 days? Is it 90 days? Is it a day? If you’re going to offer someone health benefits, what do you see as the trend of … What’s that tenure look like? I mean, nothing’s permanent. I mean, I guess nothing guaranteed, but at the same time, I can’t imagine someone offering health benefits for someone that works a two-hour shift.
Sarah Jensen: Yeah. You’re really going to be looking at the workers that are coming on for consistent work, 30 hours a week or more for at least 45 days, two months at a minimum, because typically for a general benefit plan, you’re looking at a 30-day waiting period for them to enroll and have the benefits kick in. So really, it is more tailored, traditionally, to the full-time worker.
That being said, if there are companies who are acting as the employer of record, whether it’s a staffing company or a payrolling company like IES where they have hired the talent, and the talent is being placed at different jobs, so even though the talent is working at different locations, the employer is remaining the same. And as long as that person is working consistently 30 hours a week or more, even if it’s at different locations, they still would be eligible for benefits as long as they were consistently working. So that is something that we are seeing more, but definitely with the way that benefits are historically run, it favors the full-time employee.
William Tincup: Yeah, yeah, yeah. And again, it makes sense. And that’ll probably change in time, right? So it’ll probably change. The 30-day wait period will probably shorten, shrinking in some ways, but to be determined. So the topic, again, engaging contingent workers by ensuring a robust benefits package, what’s robust these days? Let’s make sure the audience understands, “Okay, when we say robust, here’s what we mean.”
Sarah Jensen: So I think a benefits plan that is comprehensive in that whether it’s an HMO or a PPO, an HMO plan that covers your hospital costs, it has low deductible, you might have a small co-pay, it covers a wide range of medical offerings. So it could be that your medical visits, yearly check-ins are covered. If you have a prescription plan included, that would be considered robust. If you have dental, for example, that you are able to get your bi-annual cleanings covered. And then, of course, if you have any other work above that, maybe you’re paying 50 to 70 … the insurance is covering 50 to 75% of the cost. So those would be examples of something that would be considered robust.
William Tincup: Okay. So with that, are candidates also looking at other things like EAPs or mental … I’m thinking about mental health, in particular, for some reason, or are they thinking about other stuff that’s off the grid?
Sarah Jensen: That, I think, is something that is important to look at in terms of what those supplemental offerings are for a company. And if they have things like EAP, that is going to help create more of a well-rounded program, especially right now throughout 2020, when everyone was figuring out the world. Mental health was a big priority in making sure that you were caring for your workforce, whether it was your permanent workers or your contingent workers, and having facilities to enable mental health support, whether that was through a health program or through an EAP is something that is still really important heading into 2022.
William Tincup: So two things real quick. One is this. This is new for both employers, whether or not it’s the third parties or direct, it’s new to the folks that have been in the benefits world there. It’s also new to candidates as we shape the conversation for them. When something’s new like this, you can get miscommunication really quickly. So how do you suggest people make sure … Because it is new on both sides. How do they start this communication with this group of talent?
Sarah Jensen: Regarding mental health?
William Tincup: Well, regarding benefits in general, because I’m thinking to myself that if I’ve been working as a gig worker for the last five or six years, I’ve gotten benefits some other way, either through ACA or some other way, or not had benefits and just not thought about it, which I know, especially for a younger population, that’s the case. They just don’t think about benefits, right?
Sarah Jensen: Sure.
William Tincup: Okay. That’s fair. So on both sides, so the candidates might be maybe new to asking questions about benefits, and then the benefits, whether it’s third party or direct, it’s new for them to engage talent, contingent talent in this way. So how do they make sure they get on the same page quicker rather than miscommunicate with one another?
Sarah Jensen: So I think it starts at the beginning of the process when you’re looking at companies looking at its talent strategy for the year. And if it’s a total talent management strategy, it’s having the dialogue internally to say, “Okay, what are we offering our direct employees? And is this sufficient in terms of our recruiting and attracting talent? Are we getting feedback from candidates that our plan is not necessarily as attractive as they would like?” So hearing the feedback from the workforce as to if your plan is on par or not. Also, having those discussions with your insurance brokers to say, “Hey, what’s trending this year? How is our plan comparing to others in the market?” And they should be able to have really good insights for you as to the benefits market changes and working with you to keep your company competitive.
And for the contingent workers, it really goes back to having a good relationship with your third party vendors and having a discussion with them to say, “Hey, here’s what we are hearing internally from our benefits team. What are you hearing from your insurance brokers about how your plans are stacking up against competitors in the industry?” And asking them how are they ensuring that what they’re offering to the contingent workers is competitive. And then if it’s not, again, having those discussions to say, “Okay, well, have you thought about enhancing your plans? If so, what would that look like for us from a cost perspective?”
And then from the worker’s perspective, how is that communicated in the onboarding process? How are you sharing what your plans are and how employees are eligible for them? When will they be invited to enroll? Is there a forum for them to contact the benefits team for questions? Do they have the ability to set up individual conversations to dive into details about the plan, if they really have questions or concerns. So I think it’s a multi-layered approach.
William Tincup: I love it. You know what’s interesting is it also comes down to attrition, right? You have someone who has some great talent, and for whatever reason, they’re staying, that’s a stay interview, or an opportunity to find out why they’re staying. And if they’re leaving, then there’s the exit interview or a way to do an exit interview to find out why they left.
Sarah Jensen: Yeah, absolutely.
William Tincup: So last thing just really quickly, because you mentioned a way that workers are looking at companies and looking at opportunities, does DEI, does it show up on the radar, not as a benefit, per se, but as just something that candidates factor in?
Sarah Jensen: Absolutely. I think we’re seeing that more and more over the last handful of years. I think that workers have a say right now of where they want to work, and they want to align themselves with a company that shares in their values and that has initiatives that back up those values. So having a diversity and inclusion initiative is something that a lot of workers will pay attention to. And then what’s behind that initiative? Are there activities and programs and actions in place to actually back it up? So I do think if a company does not have a DE&I initiative, they should really, at the top level, have a just discussion about what their beliefs are and their policies are, and putting something together.
William Tincup: Yeah. It’s interesting because you can also see this in … Well, you see it in job descriptions all the time on Indeed or LinkedIn or whatever, is that people put their DEI statement or strategy in the description. And also, you see a lot of jobs that are now remote, remote only, that type of stuff. And even you could go further with that, with gig workers or contingent workers, basically, to recruit them. It’s okay to be, “We’re looking for gig workers, we’re looking for contingent talent, and oh, by the way, here’s our benefits package,” et cetera. So Sarah, this has been wonderful. Thank you so much for carving out time for us.
Sarah Jensen: Oh, thank you for having me. I’ve enjoyed it.
William Tincup: Absolutely. And thanks for everyone listening to the Recruiting Daily Podcast. Until next time.
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William is the President & Editor-at-Large of RecruitingDaily. At the intersection of HR and technology, he’s a writer, speaker, advisor, consultant, investor, storyteller & teacher. He's been writing about HR and Recruiting related issues for longer than he cares to disclose. William serves on the Board of Advisors / Board of Directors for 20+ HR technology startups. William is a graduate of the University of Alabama at Birmingham with a BA in Art History. He also earned an MA in American Indian Studies from the University of Arizona and an MBA from Case Western Reserve University.