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Gig Economy Fallout Worsens Ongoing Senior Living Labor Crisis

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The ability to attract and retain frontline workers is often cited as the biggest challenge for today’s senior living providers — and many think it’s going to stay as bad, or even get worse, in the next three years as they compete with the so-called “gig economy” for new workers.

That’s according to a new survey from OnShift, a company that provides senior living workforce software and services. The new bi-annual report, “Workforce 360,” asked 1,500 long-term care, senior living and health care professionals how they viewed the ongoing senior housing labor crunch.

Of the professionals surveyed, 63% said they expect it will be as or more difficult to retain workers in the next three years as it is today. Similarly, 73% expect that finding qualified employees will remain as hard or get harder in that time, and 69% said the same about managing labor costs.

OnShift

These results underscore the fact that many providers are grappling with competition for new workers from inside and outside the senior care industry. About 66% of all respondents said they also regularly fight for talent against hotels, restaurants, retail and app-based companies representing the growing “gig economy,” such as Uber, Lyft and Instacart. They also reported fierce hiring competition from home health agencies (58%) and hospitals and health systems (69%).

“They are really suffering from all of the fallout of the gig economy,” OnShift President and COO Ray Desrochers told Senior Housing News. “The problem was already difficult enough in terms of the number of caregivers required to address the needs of the growing and aging senior population. Now, it’s getting exponentially worse.”

OnShift

That’s not the only workforce challenge providers are dealing with. When asked about the effects of turnover, 70% of the surveyed professionals said they’ve seen an increase in worker burnout. Higher turnover also leads to higher labor costs (47%) and an increased reliance on overtime (62%), according to the survey. And, turnover correlates to a decrease in the continuity of care (68%) and resident satisfaction (44%).

For providers struggling with workforce issues, there is a light at the end of the tunnel. But in beating their health care, hospitality and gig economy competitors, senior living providers will also have to resemble them — at least in terms of offering similar perks and benefits for workers.

“[Other companies] are coming in with what I consider to be modern benefits and modern affordances for employees,” Desrochers explained. “Providers are going to have to find ways to differentiate, and they’re going to have to find ways ultimately to provide some kind of vision to workers.”

Already, some providers are looking at providing creative perks and benefits as a way to get ahead of the hiring curve. Benefits such as more flexible scheduling, financial assistance programs and tuition reimbursement are gaining steam among savvy providers in the senior living industry, Desrochers noted.

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Of those surveyed, 62% said their company has an employee reward and recognition program, while 50% offer or plan to offer tuition reimbursement and more flexible scheduling options. The respondents also said their companies offer or plan to offer discounts for meals (37%) and some kind of access to earned wages between paychecks (34%).

OnShift

Providers are also testing out some truly unconventional approaches to employee perks and benefits.

“We’re seeing benefits from free coffee to cruises,” Desrochers said. “Each of them is trying to differentiate themselves, and they’re trying to provide things that, for this caregiver population, are really exciting.”

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As Congress scrutinizes gig worker rules, small-business owners need to know the basics – The Philadelphia Inquirer

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Uber’s UK ruling could have implications for gig economy startups

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Former Uber drivers Yaseen Aslam and James Farrar first brought their case against Uber in 2016
(Carl Court/Getty Images)

The UK’s Supreme Court has rejected Uber‘s appeal against an earlier ruling that said its drivers must be classified as workers, a result that may have a significant impact on other gig economy companies.

The decision—which cannot be appealed—means thousands of UK Uber drivers cannot qualify as being self-employed, entitling them to both minimum wage and holiday pay. The ridehailing company could now face paying substantial compensation to its drivers.

The ruling, which criticized Uber for sidestepping UK labor laws to withhold benefits, could influence other battles between gig workers and the companies that hire them. Earlier this month, the Independent Workers’ Union of Great Britain appealed against a court decision preventing riders for food delivery startup Deliveroo from engaging in collective bargaining due to their self-employed status. Deliveroo, which is backed by investors including Durable Capital Partners and Amazon, is looking to go public this year.

“Employees should benefit from improved rights; however, employers are likely to face increased costs of labor and disruption to their business models, which have proven to achieve rapid scale with gig workers,” said PitchBook analyst Nalin Patel. “The ruling may also now set a precedent in the UK and force other gig economy startups that utilize the self-employed contractor model to rethink how they operate in the region moving forward.”

Former Uber drivers James Farrar and Yaseen Aslam originally won their tribunal against Uber in 2016. Uber appealed the decision, but it was upheld in 2017, and again in 2018 by the High Court.

“This ruling will fundamentally re-order the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery,” said Farrar, who is also a general secretary with the App Drivers and Couriers Union. “Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom.”

In a statement, Uber’s regional general manager for Northern and Eastern Europe, Jamie Heywood,  said the court decision was focused on a “small number of drivers” who used the app in 2016. Since then, he said the company had made changes to its business,  providing free insurance in case of sickness or injury. He added: “We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”

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The future is now for gig-based entrepreneurship – San Gabriel Valley Tribune

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With Californian Kamala Harris as vice president, it’s clear the new Biden administration is taking its cues from the once-Golden State on labor policy.

In one of its first acts in office, the Biden Administration placed a regulatory freeze on a Department of Labor regulation enacted in the waning days of the prior administration relating to independent contractors.  The rule, according to labor and employment law firm Fisher Phillips, “aims to make it easier for businesses to classify workers as independent contractors.”

It’s unlikely this rule to give more workers freedom to be their own boss and set their own schedules will survive in a Biden administration that was heavily reliant upon labor unions for money and manpower to win the 2020 campaign.

Meanwhile, House Democrats recently re-introduced the controversial PRO Act in Congress, which “seeks to reduce the use of the independent contractor classification by companies such as Uber,” according to CNBC.

Both of these efforts followed the lead of California’s liberal legislative majority, which two years ago enacted the controversial Assembly Bill 5 to severely restrict the ability of Californians to work as independent contractors.  Their goal is to increase union membership and dues and force people to work in traditional, 9-to-5, union jobs that are relics of the past.

Doubling down on AB 5-type restrictions at the national level – which may be the Biden administration’s goal with the nomination of Julie Su, California’s chief AB 5 enforcer, as deputy Secretary of Labor – would be a tremendous mistake.  It would threaten innovation and hurt the ability of Americans who have lost their jobs to put food on the table during a global pandemic.

As documented in the new Pacific Research Institute study, “The Small Business Gig,” Americans are increasingly working in the gig economy.  They don’t want government – whether in Sacramento or Washington, DC – dictating how they can earn a living.

A 2018 Gallup survey found that 36 percent of U.S. workers have some sort of a gig worker arrangement.  Whether renting out an extra room to earn cash to pay the mortgage or using an app to earn a living on an alternate schedule, the gig economy is increasing opportunities for Americans to become entrepreneurs, while providing customers with lower cost services.

Many in California state government see the gig economy as exploitative and disruptive.  But data from the ADP Research Institute shows that 70 percent of gig workers are independent workers by choice.  Gig Economy Data Hub research found that more than two-thirds of gig economy workers are satisfied with their current work arrangement.

Government shouldn’t pick winners and losers in the economy.  New restrictions on the gig economy, like those proposed in Congress, will limit people’s freedom to become entrepreneurs while institutionalizing the old way of doing work.

Instead of adopting regulations at the federal level that 58 percent of Californians – Democrats, Republicans, and independents alike – rejected when they passed Proposition 22 in November, the Biden administration and Congress should take the opposite approach and enact market-based policies to encourage entrepreneurship and innovation.

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