Headlines dominating recent news cycles have grimly tallied the number of layoffs at high-profile corporations, especially those among organizations in the technology sector. The figures measure the toll on permanent employees, but they almost never include the job cuts among contingent laborers. There’s a reason this group sometimes goes by another name: the shadow workforce.
Too often, there are workers who go unrecognized or unaccounted for by organizations, industries or governments. They may be temps, freelancers, gig workers or independent contractors, and may work off the books or outside of traditional employment channels. Even in professional settings, where employees tend to escape the sometimes-harsh treatment of seasonal and migrant workers, and other blue-collar temps, members of the shadow workforce may face unfair labor practices, lack certain rights and protections, and receive unequal compensation for the same work as permanent employees.
These workers are far less visible, but no less valuable than their permanent counterparts – even as the former group outnumbers the latter in many organizations. Google, for instance, employed 120,000 permanent employees as of March 2019, while using 123,000 contractors and temps, according to the New York Times. But the company’s shadow workforce didn’t just find recognition elusive. Its members were often separated from the company’s permanent workforce in significant ways, not only being denied perks (such as free company shuttles to the office) but even basic safety considerations (an email regarding workplace security concerns that only permanent workers received).
The Value of the Shadow Workforce
It’s hard to imagine any industry today remaining productive and profitable without the contributions of the shadow workforce. Contingent workers provide specialized skills and expertise on an as-needed basis, providing organizations with access to valued human capital without the long-term commitment and overhead costs associated with permanent employees.
This relationship can be a win-win, with contractors and other members of the shadow workforce often able to work at higher income rates and take advantage of flexibilities that may not be afforded to permanent employees. But this isn’t always the case. And the less attention that is paid to this workforce, the more likely its members are to be exploited or given fewer opportunities for pay increases, advancement and even more basic workplace considerations.
Shining a Light on the Shadow Workforce
Certain requirements under U.S. legislation should theoretically level the playing field for the shadow workforce. The WARN Act (Worker Adjustment and Retraining Notification Act) is a federal law that requires employers with 100 or more full-time employees to provide advance notice to workers ahead of a mass layoff or closure. Under the WARN Act, qualifying employers must give at least 60 days’ notice to workers – in writing and including specific information about the event – or risk liability for back pay, benefits and possible civil penalties.
But many smaller companies use contractors, too, meaning that members of the shadow workforce contracting at 30-, 60- and 90-employee operations are unprotected by the WARN Act. And although many companies treat their contingent laborers with dignity and fairness, there are too few protections in general for the shadow workforce. Given their ability to allow organizations to scale operations and staff projects as needed, the shadow workforce is an incredibly valuable commodity to industry – a group that should be celebrated, nurtured and safeguarded from exploitative practices.
Want to learn more about how you can leverage contingent labor? Contact a PeopleCaddie representative today.