Data and Research

Part-Time Workers Are Financially Vulnerable

As the nation moves more to a “gig” economy, the question becomes: How can we prepare part-time employees for a financially secure retirement?

By Rebecca Moore editors@plansponsor.com | July 10, 2017
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The American labor force appears to be undergoing a fundamental shift from traditional single employer, 40-hour work weeks to a more flexible, “on demand” model, according to the report “Part-Time Nation” from The Guardian’s 4th Annual Workplace Benefits Study.

As more employers embrace the new “gig” or “flex” economy, the ranks of part-timers, including independent contractors, will continue to rise. In Guardian’s latest research, employers reported that more than 82% of their workforce are full-time, permanent employees, while 13% are part-time employees (or work fewer than 35 hours) and 5% are independent contract workers. These proportions are consistent with U.S. Bureau of Labor Statistics for the past few years, where the annual average for part-time/contract workers ranges from 17.5% to 18.5%, Guardian says.

Its research found more employers expect their part-time workforce (including contractors) to grow over the next three years. About one in three employers anticipate growth in part-time workers, while 13% expect a decrease—a net of more than 20% of employers projecting growth in their part-time workforce.

Part-time workers share a number of demographic characteristics. For example, a higher percentage of part-timers are at the two ends of the career spectrum: Younger Millennials (ages 22 to 29) who are just starting their careers and pre-retiree Baby Boomers (ages 60 and older) who are winding down. About one in four part-timers consider themselves retired from their primary career.

And, it’s not just the “gig” economy that creates a long-term financial problem for workers. Among part-timers surveyed, 36% work in the hospitality industry (e.g., waiter/waitress, hotel front desk, tour guide, amusement park attendant), 23% are employed in health care (e.g., nurse, technician, home health aide, therapist) and 20% in retail (cashier, sales associate, customer service) sectors. Another 35% combined work in the construction, financial services and manufacturing industries.

NEXT: Limited access to retirement plans and options for part-timers

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