• Ultimate Gig

Large Companies Embrace Gig Work

The gig economy touches every industry, with one in six workers in large organizations now a gig worker, according to a new study by the ADP Research Institute. The ADP Research Institute is an arm of one of the largest payroll processors in the United States. For this study, it analyzed payroll data from 2010 to 2019 of more than 75,000 large companies with a combined more than 18 million workers.

Who drives company performance?

While emerging digital platform companies such as Uber and Lyft dominate much of the public discourse surrounding the gig economy, the ADPRI analysis provides significant insight into the rest of the gig economy. The researchers considered contractors receiving 1099s and short-term W-2 employees to be gig workers, and the research suggests gig workers may be driving 16 percent or more of a company’s performance. The research reinforces many of the core findings of the Ultimate Gig research project. Gig work is prevalent across all generations in the workforce today, and the vast majority of participants are working gigs by choice rather than as a stop-gap while they search for long-term W-2 employment. They cite flexibility and work-life balance as key motivations for their chosen work, with 44 percent of 1099 workers saying that is their top reason.

Do 1099 or W-2 workers make more money?

Companies in the study also benefit from the 1099 gig worker arrangement, both in the form of greater flexibility in scaling their staffing levels and in lower costs for worker compensation. On average, companies in the study paid 1099 workers a higher income than their W-2 workers, but once the total compensation is adjusted to include the value of company-paid benefits, such as insurance, retirement contributions and paid leave, the study found that W-2 workers cost a company, on average, $810 more per month than a 1099 worker. The lack of these benefits doesn’t appear to be a significant concern for the gig workers in this study. Eighty-nine percent of the 1099 workers surveyed had health insurance, with 32 percent having Medicare or Medicaid, 29 percent purchasing it on their own, and 21 percent had coverage through a spouse’s plan. To access the full report, Illuminating the Shadow Workforce: Insights into the Gig Workforce in Business, visit the ADPRI.

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The Ultimate Gig is a research project with the mission to provide insight into the relevance and growth of gig economy opportunities. Order the Ultimate Gig special report today!

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