Babyboomers working in retirement
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Keep Working In Retirement

By Steve King,

Why You Should Keep Working in Retirement

There have been several interesting articles over the past couple of weeks on working in retirement and/or working later in life. And on how babyboomers should continue working in retirement.

The consensus of these are those working full or part-time instead of fully retiring are happier, healthier, more engaged and in better financial shape.

Some examples:

Next Avenue’s 4 Traits of the Happiest Retirees report all 4 happiness traits are related to working during retirement. Key quote:

If you want to be happy in your retirement years, here’s my advice: don’t retire — at least not in the traditional sense.

The North Dallas Gazette’s Studies Show Retirees Should Continue to Workreports on a University of Miami study that found older adults who continue working tend to be much healthier across multiple health outcomes than those who don’t work.

Several article pointed to the study Late Life Working and Well-Being. This study found working later in life potentially has all sorts of benefits – as long the work provides flexibility. Key findings include:

  • Voluntary part-time workers have more life satisfaction and less stress and are more satisfied with their jobs than full-time workers.
  • Flexible approaches to retirement and to part-time work are linked to higher levels of well-being, at least in labor markets where flexible work is a choice.
  • Workers who remain in the labor force after retirement age are more satisfied with their health and are happier than their retired counterparts.
  • Flexible work times and retirement schemes can enhance well-being—which is linked to better health and higher productivity—and also reduce unemployment and pension burdens.

And Bankrate’s Trending: Working longer, retiring later reports on an Aon Hewitt study showing the average retirement age has been increasing and more people are working well into the traditional retirement years.

So folks are getting the message – working past the traditional retirement age makes sense.

This trend will continue and we expect the workforce participation rate for older Americans to continue to increase over the next decade.

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Portable Benefits for the On-Demand Worker

The emergence of the gig economy has opened an important debate about having portable health and other benefits for the On-Demand Worker. There has been a number of calls for a new category for those who occupy the gray area between employees and independent contractors. Freelancers often work through a middle man or a marketplace (think or 99Designs) or an intermediary, typically an “app,” that customers use to identify themselves as needing a service—for example, a car ride, landscaping service, etc. This enables the employer to maintain some sort of arms-length distance from the worker. (We all know this is often broken, however). How can you work for someone without them giving you some sort of direction?

It’s increasing, but today it appears that at least about 600,000 or .4% of the US Workforce work with an online intermediator. The Hamilton Project at Brookings (I once interned there while I was a student across the street at Johns Hopkin’s University’s SAIS program across the street), recently hosted a gig economy event where Brookings made a proposal for  Modernizing Labor Laws in the Online Gig Economy. The talk focused on health and other benefits, and how to ‘force these new forms of work (from Uber, etc.) into a traditional employment relationship could be an existential threat to the emergence of online-intermediated work, with adverse consequences for workers, consumers, businesses, and the economy. “One of their One of the key benefits they proposed was portable benefits, which is a fascinating idea because (Independent contractors tend to have multiple gigs at one time). Their definition:

As we are defining it, the online gig economy involves the use of an Internet-based app to match customers to workers who perform discrete personal tasks, such as driving a passenger from point A to point B, or delivering a meal to a customer’s house. Note that this definition excludes intermediaries that facilitate the sale of goods and impersonal services to customers, such as, a Web site where teachers sell lesson plans and other non-personal services to other teachers, and, a Web site where individuals sell handmade or vintage goods. It also excludes Airbnb, a Web site where people can rent apartments, houses, and other accommodations.

The authors of the Hamilton Report highlight that ‘because it is conceptually impossible to attribute their (workers’s) work hours to any single intermediary.” Today, these independent workers do not qualify for hours-based benefits, including overtime or minimum wage requirements. These independent contractors rarely, if ever, qualify for unemployment insurance benefits. If intermediaries could pool independent workers, however, for purposes of purchasing and providing insurance and other benefits at lower cost and higher quality without the risk that their relationship will be transformed into an employment relationship, then they might be open to pooling their resources and having portable benefits for the contingent workforce.

The Ubers of the worls could then save on the costs if they have to eventually hire these workers full-time and on legal fees (although Uber has changed their driver terms of service agreement that bars drivers from participating in class action lawsuits against the company and instead requires them to enter into arbitration in the case of disputes).

As Steve King points out in his short analysis of this proposal, this new portable benefits law probably should include gig economy workers who work in the B2B sector, or sell goods, or rent real estate, but they do. But even though they are excluded from their analysis, they would likely be included in any portable benefit laws. Portable benefits seems to be a hot topic. Next week the Aspen Institute is holding a workshop on portable benefits.

Protection of the 1099 is important. I have heard of companies (the employer and the intermediary) using algorithmic scheduling to ensure their works never go beyond 29 hours of work a week, which ensures they don’t have to pay them health benefits or provide the other goodies full-time employees receive. It’s important to figure out how to address this barrier to benefits.  Ouch! Talk about Big Data hurting the worker!

Another reason to address this is that Brad Smith, the CEO of Intuit and one of the best leaders I have ever worked for, has indicated that his company’s data data shows that 40% of their self-employed customers also have income from a W2 job. (I know several people who wear these two hats). So this problem of multiple employers with different tax and benefit regimes started way before the Ubers, Lyfts, Instacarts came on the scene.

Portable Benefits basically means a person should be able to use the same benefits when they work for different on-demand companies. The Hamilton proposal is a start – it has accelerated the discussion about a new class of employees or at least the call for examining how workers are currently classified. Their proposal really doesn’t focus on online or offline, but instead stresses that workers should be protected and receive benefits. As the chart below indicates, this will continue to become an increasingly important issue to address in our On-Demand Society.

You can read The Hamilton Report here

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On Demand Industry News: Week of 9/21

Growth of on demand economy is transforming work and workplaces

Workplace Insight (press release) (registration) (blog)

The Intuit report links its findings to the growth of the sharing or on demandeconomy. It claims that around a fifth of UK employees generate up to …

Report calls for protecting rights of ‘on-demand‘ workers

Staffing Industry Analysts

NELP’s report argued many workers in the on-demand, or gig, economy as employees and not independent contractors as claimed by the firms.

On-Demand Workspace Startup Breather Wants to be Like Starbucks, Not Airbnb

Curbed National

While Breather and other sharing economy real estate startups frequently get compared to Airbnb, the comparison Smith aims for is Starbucks, which …
MSNBC Why it’s time for Uber to unionize

The on-demand economy is here – and workers’ rights are under attack. Just last week, a federal judge certified a worker class action against Uber, …

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Dreamforce Whisper about Uber

At Dreamforce, I Listened to Uber CEO, Travis Kalanick this am.  Here are some things I heard:

  • He talked about the importance of reliability and good operations, which requires smooth onboarding for drivers (which he referred to Partners) so that the rides are efficient and people get to their destination in time. He shared how his operations team uses ratings to ensure reliability.
  • He looks at demand and supply by neighborhood and make sure drivers are alerted when there is more demand and supply which is done via a heat map. This is real time ‘push’ for drivers.
  • He takes a market place / stock market approach where they can figure out the right price based on the demand, the location, etc. Trying to determine how to get the driver to the demand before it happens. 15 minutes wait impacts both sides
  • Uber can be a better way to manage your business than a taxi because of the flexibility. And less expensive cause taxi drivers don’t have to rent a car or pay for a medallion. Note: Less than 50% of drivers are doing less than 10 hours a driving a week, so they are filling in the gaps. Flexibilty again for the driver to spend time with his family.
  • Uber likes to say ‘taxi drivers are people but they are treated badly.’ So Uber likes to step in an treat the drivers well. Uber focuses on drivers being successful.

Just a few whispers from Dreamforce