America’s workforce is becoming a growing army of part-time workers and freelancers, with many enjoying the flexibility of the gig economy.

The downside for these part timers is many are on shaky ground financially. The do not receive steady paychecks and any benefits they receive are often anemic compared to fulltime workers. Employers seeking to attract and retain the best talent can win the chase for talent by offering better benefits to meet these financial gaps.

A study conducted by the insurance company Guardian estimates that 40 million Americans work part-time, temporary, or seasonal jobs, and this constitutes 25% of the total U.S. workforce. This is double the 13.5% reported in 1968, according to Bureau of Labor Statistics numbers.

This number excludes people with a full-time job that are “moonlighting” and it is projected to go up to 33% in the next 10 years. The biggest increase is expected in large companies, which employ more than 1,000 people.

“Think about the role part-time workers will be playing in the future,” says Gene Lanzoni, an assistant vice president at Guardian. “A third of the employers said they wanted to increase part-time or contingent workforce.”

A growing issue is that many of these part-time workers face serious financial disadvantages. Many are not eligible for any benefits at all, and lack the security of medical insurance, retirement savings plans, life insurance and workers’ compensation, the study says.

The study finds that while 69% of full-time employees have retirement plans, that number is only 32% among part-time employees. The difference in employer-based health insurance is even starker: only 25% of part-time employees have medical insurance benefits compared to 80% of full-time employees.

Members of Generation X and single parents find themselves in financial difficulty the most, as they often experience challenges in paying debts and saving for retirement.

The study finds that 75% of part-time workers have not received a four-year college degree, and that the majority do not have financially dependent children and earn less than $50,000 in household income. Most work for smaller companies that employ five to 99 people.

The industry that hires the most gig workers is hospitality, followed by healthcare, retail, construction, financial, and manufacturing fields.

Millennial career choice

The Guardian study finds that until the fourth quarter of 2013, the majority of the gig workers were those that were forced to work part-time after they were let go during the Great Recession. “As of 2013, the majority of part-time workers are voluntary,” says Lanzoni.

Most of them are millennials who are just starting their careers, and baby-boomers on the opposite end of the spectrum that are transitioning out of workforce into retirement. “For millennials in their late 20s, working part-time is a career choice, as they are exploring career options, or are care-givers, or because they soured from working for a big company after they were let go during the Great Recession,” he says.

The study concludes that part-time workers that receive insurance and retirement benefits from their employers are more willing to continue working for their employers.

“Human Resource professionals need to recognize the various impacts of not having benefits,” says Lanzoni. He cites physical, mental, and financial health as being impacted by lack of benefits. “We need to start thinking about what employers can do to help.”

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