Full benefits for contract workers? One company says yes.
SurveyMonkey responded to concerns from its full-time employees that it hasn’t been doing enough for its contract workers by instituting benefits offerings for all contractors at its San Mateo headquarters.
The tech companies in Silicon Valley are known to be cutting-edge and innovative, but one company just raised the bar even further by giving contractors who don’t actually work for the company benefits, including health insurance, time off and transportation.
At SurveyMonkey, the company recognizes that contract workers are more than just filling in to carry out assignments—or provide services, such as catering and janitorial work–that regular employees don’t do. As CNBC reports, SurveyMonkey has responded to concerns from its full-time employees that it hasn’t been doing enough for its contract workers and in January instituted benefits offerings for all contractors working at its San Mateo headquarters.
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While companies using contractors—and, in particular, Silicon Valley companies that are constantly scaling up or down depending on the projects they undertake—do so to save money, SurveyMonkey is the odd man out, spending on benefits for contractors that work for the three contract companies providing workers for SurveyMonkey: the food service company Bon Appetit, cleaning company Clean & Green and the temp agency Eastridge Workforce Solutions.
It’s not a large burden financially, with only 50 employees among the three contract companies to benefit from the new policy, but it’s huge within the industry and could even signal a sea change in how contractors are treated. And considering the drastic differences in pay and benefits provided (or, in the latter case, not provided) to contractors, Silicon Valley may find itself changing its approach to such workers, whether it wants to or not.
The report quotes Becky Cantieri, head of human resources at SurveyMonkey, explaining the company’s decision in a blog post this way: “They weren’t in a competitive position compared to all our employees. They’re usually the first people I see when I come in the morning and the last people I see at night.”
Researchers Chris Benner and Kyle Neering from the University of California Santa Cruz estimate in the report that as many as 39,000 workers in San Mateo and Santa Clara Counties are contracted to tech companies, going way beyond janitorial and catering service staff: contractors in the Valley also include software testers, finance managers and administrative assistants, who would cost tech companies considerably more than the $200,000 SurveyMonkey paid to institute its benefits package—which isn’t exhaustive, but amounts to at least a start, especially for contractors at the low end of the scale.
The report points out that the lack of benefits is one of the most stressful aspects of contract work—even if a third-party contracting firm offers a benefits package to its employees, those workers often don’t make enough money—especially in Silicon Valley, where housing prices alone present a major challenge—to be able to take advantage of it. And the canyonesque divide between regular employees, who not only make far more money but are awarded luxurious perks, and contractors, leads to a two-class structure of workers.
CNBC points to a 2016 report from Benner and Neering that pinned the average salary for a tech worker at $113,000 annually, compared to a blue-collar contract worker’s salary of just $19,900. White-collar contractors found themselves somewhere in the middle, making $53,200. Further, the disparity is racial as well as financial: black or Latino employees comprise just 10 percent of full-time tech employees, but 58 percent of blue-collar positions and 26 percent of white-collar contractors.
And while a company that can arbitrarily begin a benefits program can just as arbitrarily stop one, absent strong representation for its workers, the rise in the number of contractors could lead to even more change. Research by Harvard economist Lawrence Katz and Princeton economist Alan Krueger indicates that the number of contract workers has risen from 10.1 percent to 15.8 percent from 2005 to 2015.