Bias and diversity in the gig economy: What HR should know

With the war for talent in full swing, ignoring bias issues that affect gig and freelance workers is a mistake. Experts share helpful advice to how HR can get proactive.

Thanks to forces such as the #MeToo movement and high-profile legal bias cases, more workers are demanding organizational leaders make inclusion a priority. Addressing the bias and diversity that affects gig workers is part of that priority.

Employees who perceive bias at large companies are three times more likely to quit within the next year, according to research from the Center for Talent Innovation. They're also more than twice as likely to hold back on proposing ideas or solutions, which has unwanted repercussions in an economy where success rests on innovation and change.

In response to such realities, 64% of employers invested more in diversity and inclusion efforts, according to Glassdoor's "Job and Hiring Trends for 2020" report. Moreover, U.S. businesses increased their search for diversity and inclusion specialists by 30% in 2019.

But while organizations pay close attention to how diversity and inclusion affects their full-time workforce, few have considered the issue when they engage contingent or gig workers.

That may be starting to change.

Seventy-five percent of HR departments reported expanding their support of contingent workers, in Deloitte's 2019 "Global Human Capital Trends" report, said Matthew Shannon, a senior research analyst at Deloitte's Bersin unit.

"I do think that we are seeing trends moving in that direction, [with employers] looking at how their existing strategies, processes and policies all affect, and could affect, their alternative workforce," he said.

Whether you call nontraditional workers the "alternative workforce" as Deloitte does, or refer to them as gig workers, contingent workers, contract workers or independent contractors, they number in the millions and represent an important part of the workforce. But understanding their needs and issues can be confusing.

Employers haven't worried about bias and diversity in the gig economy because they regard these workers as solutions to an immediate need, not long-term resources to be nurtured, said Jeff Dickey-Chasins, principal of the consulting firm Job Board DoctorLLC.

"You're really just looking for a person with a particular skill set or particular background or particular availability. Going to the next step and saying, 'Oh, I want to make sure it's a woman or an African American ... I think that's a step too far for a lot of employers," he said.

Bias affects the entire workforce, no matter how it's categorized, said Angela Reddock-Wright, a Los Angeles-based employment attorney. And even though employers don't have the same legal obligations to contingent workers as they do to full-time employees, they need to understand fundamentals.

"The laws that [address] discrimination and harassment and bias still apply," she said.

For example, California prohibits discrimination and harassment against any type of worker, whether that worker is a full-time employee, a gig worker or someone who works for another company (such as a FedEx driver).

Employers that want to consider how bias impacts their gig workforce can begin to address bias and diversity issues related to the gig economy by thinking about these areas.

Discrimination doesn't only occur when companies hire workers. Incidents happen on the job as well.

Because of that, the idea of inclusion is an important part of addressing issues of bias and the gig workforce, said Kathi Enderes, Bersin's vice president of talent and workforce research.

"If you don't create an inclusive environment for your entire workforce, [contingent workers] will not come back," she said. "You want to be able to attract that alternative workforce again."

To succeed, companies should try to answer an important question.

"What is your single strategy for managing and supporting the diversity and inclusion of your organization, and how does that reflect your organizational values?"

Don't think technology solves bias

Although some HR technology vendors said their products can help employers address bias, technology itself isn't necessarily bias-free, Shannon said.

For example, bias can be unintentionally built into algorithms that source or select candidates, Shannon said. So, employers must be ready to identify and mitigate any issues that appear even when they use some kind of tool.

Remember that many of today's talent acquisition technologies were designed around the full-time workforce, Enderes said. Companies could use them and their underlying concepts to better manage contingent workers.

The murkiness of worker classifications

Full-time employees are protected by laws and regulations that prohibit discrimination based on, for example, religion, gender, disability or sexual orientation.

"If you interviewed 10 candidates, you basically have to be blind to any protected categories that those individuals may fall within," Reddock-Wright said.

Exactly what laws come into play depends on whether a worker is considered an employee or a contractor, Reddock-Wright said.

However, classifying employees can be complicated because employers have to abide by state and local laws -- which vary -- as well as federal rules, she said.

The challenge is a number of states are taking a fresh look at their regulations governing who is and who isn't an independent contractor, Reddock-Wright said. For example, California recently required companies to reclassify many independent contractors as employees.

"If that's the case, they're entitled to the same protections as any employee, whether they're full-time, part-time, temporary or seasonal," Reddock-Wright said.

However, if you're truly hiring a contractor the rules are technically different, she said.

"You shouldn't have to be concerned about race or gender or anything because there's no protection [against bias and harassment] in being a business owner," Reddock-Wright said.

That doesn't mean a contractor couldn't take action as an individual, but they couldn't pursue options that are often available to employees, such as filing a complaint with the Equal Employment Opportunity Commission.

HR should take the lead

CHROs, HR leaders and their staff have an important role in upholding inclusion and fighting bias generally and as these issues relate to gig workers.

HR departments should be proactive in bringing these issues to the attention of corporate leadership, Reddock-Wright said.

"[HR] can help them understand where the law is and what the potential risk is to the company if they don't update their policies and practices to comply with the law," she said. "A lack of compliance, or moving with the times, could cause much greater risk in liability in the future than if they take proactive steps to address the issues now."

To encourage change, HR should facilitate discussions about bias, diversity and contingent workers, Enderes said. Procurement departments, which often take the lead in engaging contractors or staffing firms, are accountable for dollars and contracts, not people.

However, HR's focus is on people, so it's in the best position to lead collaborative discussions with procurement and business leaders to expand thinking about diversity, from full-time employees to everyone who's a part of the company's workforce, Enderes said.

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