At ING, the Amsterdam headquartered banking giant, hundreds of independent workers had not been paid since June 2019 due to cash flow problems at the intermediate payroll service provider, TCP. Initially ING refused to compensate and defended its position by stating the payroll service provider had already been paid. 

The general public took a different view. A highly visible debate in the press made it clear that the sympathy was with the independent workers. The power imbalance between an independent worker and ING (with its middle man) was deemed so significant that people wanted ING to assume responsibility. A simple compensation issue became a corporate reputation risk. ING was quick to fix it and made a 180 degree PR turn in August by paying the independent workers directly.

Similar debates have been seen in California and Spain, with companies such as Uber and Deliveroo. The issue spans various industry sectors and continents and at the core of it lies the definition of ‘what makes someone an independent worker’ versus ‘what makes a person an employee’. Politicians responsible for labor market policies have are wrestling with this topic and are trying out various reforms. It’s proving to be a balancing act between the competitiveness of a nation’s economy, new technology, maintaining governmental income through tax on labor and keeping traditional voter groups (such as union members) on board.

Why do companies need these independent workers? Because these workers perform complex, often IT and compliance related, tasks and don’t necessarily want to work for any employer full-time. These people favor autonomy, job variety and freedom over a guaranteed monthly paycheck and have plenty of work to choose from. In other cases, companies opt for independent workers because they do not want to burden their P&L with more headcount. In both cases, companies do not want the administrative hassle to pay thousands of independent workers directly, which is why they use payroll service providers.

As we described in our book ‘Flex or Fail’, over 23% of the global workforce in developed countries is working independently and their number is likely to double in the next 10 years. A variety of industries, such as transportation, logistics, building and day care are using contractors or independent workers to get the work done. Even governments have embraced the use of independent workers. These large employers are served by a variety of payroll service companies, promising easy payment handling at very low costs. This has quickly become a crowded marketplace leaving the payroll service providers with thin margins and increased financial vulnerability. The risk of having to pay twice, which happened to ING, can happen to many other companies.

Policy makers at governmental level have not been able to come up with a clear definition of what ’employed’ versus ‘independent work’ means. In the absence of clarity, the risk of not getting paid (for an independent worker) or the risk of getting fined, or facing a PR crisis (for companies) is increasing.

Our analysis of this problem leads to some key recommendations that include:

  1. Companies conduct regular and systematic audits of their payroll service providers;
  2. Governments improve clarity and rights around the status of ’employed’ versus ‘independent’ workers;
  3. Independent workers evaluate the risk of working with weak payroll service providers and, if need be, seek payment guarantees upfront from the end-client.

Our work with organization leaders has demonstrated that the rapid expansion of an independent workforce is generating both risks and opportunities for companies. Third-party payment providers are just one area that many companies have underestimated as a source of risk that goes way beyond simple HR and payroll processes. For ING, this rapidly became a strategic and reputational risk to the business and its brand.  

In our book ‘Flex or Fail’, we describe the future of work and pay in an era of automation and outline a set of steps organisations will need to take to retain competitive advantage. We are working with organisational leaders to support deployment of these approaches to help develop solutions to complex problems that their industry and organisation may be facing in the future.

Please contact us at if you wish to be amongst a core group of innovative companies that are pioneers in using the Flex Index. RTA Consulting would be happy to provide consultancy support for your organisation on these topics, speak at your events or engage with you to expand the conversation.