The pros and cons of flex-working
Flex-working is the “must-have” employee perk which many women seek to manage the complexities of life. But outside the corporate environment it can become a false friend.
In recent years we have seen the rise of a different way of organising and allocating work. In many companies as they search for agility and leanness, freelancers, “giggers”, contractors and perma-temps have become a more commonly found category of employee. Previously temps or interims, were hired to fill a temporary role, or deal with a problem which did not need a permanent position. Today, long-term thinking is rapidly becoming the old school approach. We are seeing now an increasing number of problems dealt with only by short-term solutions. Flex-working can be a huge bonus, but it can also be a trap, especially for women.
Collaborative or abusive?
In the context of a corporate environment, flex-working offers great possibilities for employees. They can manage the complexity of modern life with their professional commitments. But outside in the wider “gig,” collaborative or sharing economy individuals lose employee status. “Flexible” can result in downsides which many don’t factor in.
Flex-working encourages people to “monetize” underutilized resources and time. This is often via web sites acting as commissioning agents, set up to connect individuals on the basis of a coincidence of needs. It can be for spare rooms (Air BnB), car seats (Lyfft, Uber) or just a pair of hands able to assemble IKEA furniture (Task Rabbit). This methodology can suit students, anyone with parenting or caring or other ad hoc responsibilities, the retired and unemployed.
It is especially alluring to women, who for the longest time have been seduced by flex-working to cope with family responsibilities.
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Change in employment status
Women are changing their employment status in their droves to become freelancers or solo-prenuers. In the US, 39% of the freelance economy is female. In the EU, where it’s more difficult to track numbers, it is estimated that 15% of all Europeans are now working on a freelance basis. A high percentage of those will be women.
Other women take reduced hours to work part-time for family reasons. Very often these part-time contracts are not set up so that employees are eligible for the statutory rights associated with full-time employment.
These employment structures facilitate employer savings on health benefits, pension contributions, redundancy payments, paid holidays, overtime and even paid lunch breaks. Workers are only paid in some countries for the hours worked on zero hour contracts. In others, many convoluted arrangements are made to prevent those on roll-over contracts having the same rights as full-time employees.
No longer premium rated
In the past, contract fees carried a premium rate of about 30% above standard pay scale. This would allow the freelancer wiggle room for the provision of healthcare insurance, pension, earnings protection, sickness and any other absences. Today, increased demands for services are being made against knocked down rates. Even queries related to an assignment briefing are considered as part of the business development side of the process. That is unbillable.
There are anecdotal reports that women, particularly those who might be part of a couple looking for some additional income, are failing to negotiate correctly, driving daily rates down. Research from Corporate Crossovers, shows salary cuts to be between 32-40%. Even within the gig economy there can be a gender pay gap. Stanford research into pay rates for Uber drivers reveals a gender pay differential of 7%.
Flexibility and flex working can become a false friend.
Downside of flex-working
Although flex-working offers benefits there can be a darker side. If contractors don’t create a sustainable business model, they can jeopardise their long-term futures. They fail to provide financial security post retirement.
A recent bulletin from the European Commission, (Employment Social Affairs and Inclusion) stated that to reduce the likelihood of poverty in older age, women must reduce the number of interruptions in their employment history.
“First and foremost, the key to an adequate pension in old age lies in longer and less interrupted working lives”
Many “giggers” are also being caught out by post-dated tax demands. They have made no provision for any taxable income received, especially via PayPal, eBay or other web platforms. For those who dreamed of digital businesses and being able to work from anywhere, VAT Moss is catching many unawares.
As early as 2011 the Atlantic labelled this economic predicament “Middle Class poverty.” So although flex-working has massive appeal in the short-term, it is not without long-term downsides.
For many women flex-working is turning out to be a false friend. The lesson is to do your homework thoroughly.
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Adapted from a post on LinkedIn Pulse