An influx of employers are getting rid of health benefits by shrinking their full-time workforce and hiring freelancers in 2016 due to the increase in costs caused by the Affordable Care Act according to a study released Tuesday.
Nearly one-third of companies intend to work towards “eliminating” healthcare benefits because of the ACA, the study found, and 60 percent of companies intend to hire more freelance employees than full-time employees. The study was conducted by Field Nation, a cloud-based company that connects employers with contractors, and Future Workplace, an executive development firm.
The ACA requires employers of 50 or more full-time people to provide health benefits.
After surveying 600 human resource employees and 959 freelancers, the results show a whopping 68 percent of employers said the ACA will have a “high impact” on their hiring decision with 74 percent saying they plan to increase freelance contracts.
The uptick was largely attributed to the mandate’s tax penalty, which increased to its largest number in 2016 at $695 per employee. According to the study, on average, freelancers work less than 40 hours a week, are willing to work for less money and have contacts that generally last between one and five months.
“The trend of companies hiring more freelancers will continue annually, causing for an even more blended workforce, and creating new challenges for business leaders,” Dan Schawbel, a Partner & Research Director at Future Workplace, said in a statement provided to The Daily Caller News Foundation. “The workforce is willing to make sacrifices, including compensation and benefits, in order to gain the freedom and flexibility afforded to the freelance career path.”
Despite health-care plans being a major factor in helping draw skilled workers, a large number of companies said they are open to changing their business model in order to avoid the crippling costs.
“While 89 percent said healthcare benefits are key attracting and retaining talent, nearly one-third of companies intend to eliminate them due to the ACA,” the study reads. “From the freelancer point of view, 60 percent said the ACA has impacted their workload in some way and 61 percent said they don’t currently subscribe to a freelancer-specific healthcare benefits plan.”
“Spurred by competitive demands for more agile organizations, the world of work is pivoting to a blended workforce,” Field Nation CEO Mynul Khan said in a statement.”The combination of enabling technologies, societal attitudes, increased mobility, high workforce dissatisfaction, and the war for talent is disrupting the classical employer-employee model.”
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