A majority of employers (56 percent) say having a full-time employee makes it easier to accommodate the ebbs and flows in work volume, and report that contract workers are less loyal or invested, according to the Workforce of the Future Survey, sponsored and developed by the Aspen Institute’s Future of Work Initiative, the Markle Foundation, Burson-Marsteller and Time magazine. 

Conversely, employers cite using independent contractors both for the flexibility of hiring workers with specific skills as the need arises (90 percent), as well as for cost-saving purposes such as taxes and benefits (86 percent).

Still, when presented with the tradeoff, most employers (58 percent) say full-time hires are better for their company because they provide more value over the long-term despite having to pay more up-front on taxes and benefits.

“The consensus that held the 20th century social contract together is coming apart,” says Bruce Reed, co-chair of the Aspen Institute’s Future of Work Initiative. “While companies prefer full-time employees, more and more are using independent contractors to reduce costs, and two-thirds say providing those workers benefits is someone else’s responsibility.  We need a 21st Century social contract that works for everyone by making it easier for employers to share its responsibilities in investing in workers and easier for all Americans to take more benefits with them from job to job.”

A majority of all employers, 67 percent, say their company seeks to limit the number of contingent workers in favor of full-time employees, while 60 percent report using contingent workers. Of those who use contract labor, a majority, 57 percent, expect to use more in the future – and 70 percent of all employers predict that more companies and organizations will move toward a more on-demand labor model.

“More than 80 percent of surveyed employers who use contingent workers do so because it allows them to quickly adjust to changing workforce needs or to hire people with specific in-demand skills,” says Markle CEO and president Zoe Baird. “This makes it all the more important to ensure all workers have the skills they need in today’s ever changing labor market, whether they are full-time employees or contingent workers. A more highly skilled workforce, one that can easily find pathways to train and retrain, is critical to enabling everyone to see themselves in the digital economy.”

Seventy-nine percent of employers believe offering benefits to employees is a critical component of attracting talent, which tracks with the earlier On-Demand Economy Survey, which showed more than half of On-Demand Economy workers (54 percent) believe they should receive more benefits as part of their job. At the same time, two thirds of employers feel they should not be responsible for providing benefits to independent contractors, but don’t agree on who should bear that responsibility. And 50 percent don’t think they should be responsible for providing training or education to independent contractors.