The gig economy has a dark side. Sure, you can be your own boss! Make your hours! Work from home! It’s all great until you, say, break your arm and don’t have healthcare to get it fixed. But healthcare is a tricky proposition for gig economy companies because, after all, it costs employers a lot of money.
Maelle Gavet, who is chief operating officer at the real estate brokerage platform, Compass, has 7,000 agents who are part of the service as independent contractors. She likens her company to the Airbnb or Lyft of real estate. But this week, on stage at Fast Company’s Innovation Festival, she detailed a major new initiative for Compass. It will provide the option to purchase healthcare through our HR provider, to all of its contractor agents across 13 states.
“When you’re an independent contractor in the U.S., it touches many industries, life is hard. It’s hard for you to get any financing from your bank. They’re asking for documents and guarantees you can’t offer,” she said on stage. “We’ve been told this story in the media that it’s amazing to have this new gig economy. I think we need to remember that the gig economy creates a segment of the population that’s not supported by the same network and services that traditional workers have.”
Gavet went on to explain that Compass heard from its contractors that this lack of support was catching up with them personally. For Compass, there was a moral imperative to consider with healthcare. Gavet, being French, comes from a country where universal healthcare is a standard, so it’s hard for her to fathom that some people can’t afford it. But even more so, she learned that providing healthcare was mandatory for the health of her own business.
Across the real estate industry, it’s estimated that 14% of agents don’t have health insurance, and 57% of agents believe they pay too much for it. Compass in particular earns revenue by collecting a percentage of what each of their agents make, so the company needs these individuals performing at a high level.
“We heard from our partners, it’s hard to focus on your business when you have to worry about healthcare . . . and if you’re be covered if you had cancer,” she says. “If you want to help your partners to grow their business, you need to provide them with an environment to really allow them to focus on their business.”
With the new healthcare initiative, Compass estimates that its average contractor will save 63% on healthcare for their businesses and families. “If we want them to grow their business, they need to focus on their business,” says Gavet. “And healthcare is a major [issue] for any human being, and we needed to address that.”
Corrections: This article has been updated to correct the spelling of Gavet’s name and reflect the fact that the company is not providing the health care itself.