Some Tech Companies See Value in Benefits Equality for Contractors

Some Tech Companies See Value in Benefits Equality for Contractors

The online polling company SurveyMonkey made headlines earlier this year when it revealed that it had begun offering “gold standard” medical, dental, and vision benefits, identical to those of its regular full-time employees, to its independent contractor workforce in January. The company was inspired to do so by its employees, many of whom pointed out in a benefits survey that while their benefits were excellent, they thought it unfair that they were unavailable to the company’s janitorial and catering staff.

Last week, Fast Company’s Eillie Anzilotti took a closer look at SurveyMonkey’s decision to equalize benefits, considering the change in the context of growing awareness of the impact this form of inequality has on the army of contractors who manage facilities for Silicon Valley tech companies and many other white-collar firms in the US. SurveyMonkey is committed to making benefits equality work, primarily as a statement of its values, Chief People Officer Becky Cantieri told Fast Company:

“We have expectations for ourselves that we use our platform to contribute positively to the industry,” Cantieri says. The prevailing independent contractor model in Silicon Valley leads to “two groups working literally side by side, who have a very similar impact on the day to day experience of working at the company, but are treated very differently,” she adds. It’s still an unusual arrangement in the tech world, so SurveyMonkey has been slow to scale it to its other offices outside of San Mateo, as they want to ensure they’ve ironed out the kinks, but they intend to do so going forward: This open enrollment season, they will bring expanded benefits to contract workers at the Portland office.

She also checks in with Managed by Q, a platform for part-time janitorial, maintenance, and clerical workers, whose founder Dan Teran decided in 2014 to classify workers on the platform as employees, not contractors, and offer them benefits including health insurance, paid leave, a 401(k) plan, and even equity. “Even though it may seem like a higher cost up front, we believed that the overall value of doing so would be higher than us just saying it’s not worth investing in our employees,” Maria Dunn, Managed by Q’s director of people, tells Anzilotti. The extra costs imposed by Teran’s decision isn’t hobbling the startup’s growth: Managed by Q has raised over $76 million so far and is turning a profit. It recently announced that it was acquiring the office space planning and project management service NVS, broadening its portfolio of services and potentially gaining new clients.

Benefits equality is emerging as a key focal point for CEOs looking to build socially conscious enterprises and court a values-oriented customer base. Inequality is a recurring theme in the public discourse today, especially in the US but also globally. The public, the media, customers, employees, and investors are becoming more inclined to judge companies based on what they are doing to ameliorate—or exacerbate—this socioeconomic issue. Unequal benefits for different classes of workers (regular employees vs. contractors, or full-time vs. part-time) is developing into an ever-greater brand liability, while companies like SurveyMonkey and Managed by Q are leveraging their commitment to equality as a brand asset.

In doing so, these companies are making three bets. First, they are calculating that benefits equality generates at least as much upside in terms of lower turnover, higher motivation, and better work from contractor staff as it costs them to provide it. Second, they believe customers will reward them for treating their workers better than their competitors do (which many US consumers say they are willing to do, even if it means paying a little more). In the same vein, considering how SurveyMonkey’s employees inspired its management to make this move, they are betting that these commitments will help attract values-focused talent. Finally, they are betting that benefits equality will become standard practice within the coming years, negating whatever advantage their competitors enjoy from hiring contractors more cheaply and giving these first movers big advantages in PR and talent attraction for being ahead of the curve.