29 Aug 2019
Traditional models of work are changing with the rise of portfolio careers, and HR and HCM systems need to keep up with these changes and contractor management more broadly, writes Kim Boyd
There is a longstanding idea that an employee holds a single position with a single employer, and that the position is full-time, part-time or casual. As organisations evolve and the nature of work changes, so too does the configuration of the Australian workforce. Now, a new paradigm of employment is emerging. That of an employee who holds multiple positions often with the one organisation which, taken together, equate to full-time hours. The permutations are many and include working two jobs to make ends meet, having multiple roles to develop specialised skill sets or finding work that satisfies a multitude of interests.
How people structure their employment also varies. Some hold jobs with different employers, others mix employment and volunteer work, and for many, the positions exist within the same employer organisation. Variously known as ‘portfolio careerists’ or slasher careerists, such employees represent an emerging trend in the growing gig economy. In fact, as at December 2018, over 10 per cent of the Australian workforce held more than one job; nearly an 11 per cent increase on 2017 figures.
We are also seeing this trend. Increasingly, existing and prospective clients are expressing a requirement to have an HR and payroll system that can assist with contractor management and which is capable of managing employees that hold multiple positions.
“Organisations need a means to both accommodate the terms of employment and be able to pay the employee correctly”
For organisations with employees filling multiple positions, the challenges are real. Depending on the roles held, the employee may be entitled to different rates of pay or leave accruals. They might be an office worker in healthcare who also works part-time as a carer. In their office-based role, they will be paid a certain rate and accrue leave but, as a carer, they are subject to very different entitlements.
This is only one example, but what is common to all is that the way an employee is paid, or the entitlements they accrue, differs between positions held. When it comes to contractor management and portfolio careerists more generally, organisations need a means to both accommodate the terms of employment and be able to pay the employee correctly.
Beyond the mechanics of masterfile maintenance, employers need a way for employees to access and understand the terms and entitlements of the multiple positions they hold. Employees also need a means to complete transactions under each contract. An employee holding two disparate positions will want to take leave at some point. If they apply for leave that crosses more than one work contract, there needs to be a way that the approving managers can see the request, action their portion of it and manage their own rostering. Great providers can achieve this using Employee Self Service (ESS) where each portion of the leave request goes to the appropriate approving manager. ESS can also enable these employees to see their leave balances, either by individual contract or as a consolidated number, to further expedite planning of their leisure time.
“The ability to manage seemingly small stuff can quickly distinguish a fantastic solution from an inadequate one. So be careful what you choose”
Human Capital Management (HCM) platforms can help with contractor management by offering employers the ability to develop and store individual contracts for each position held. They can also manage the superannuation and taxation complexities that multiple roles create. Many employers forget that the tax department assess these employees against their entire earnings, not as two individuals. Getting the tax and super right goes a long way toward fostering employee engagement and faith in the payroll system. Employers also need to consider how they report earnings, depending on which legal entity holds the contract with the employee.
As the trend toward multiple roles increases, employers must be prepared to deal with not only the complexities of employment agreements, but the processes required to administer them. Great HCM systems offer solutions to ensure easy administration of contracts and tight compliance to legislative requirements. The difference between an effective payroll solution and a mediocre one often lies in the detail. The ability to manage seemingly small stuff can quickly distinguish a fantastic solution from an inadequate one. So be careful what you choose.