Throughout this series, “A New World of Work” has explored and reviewed the ever-evolving state of the staffing sector and the rise of the gig economy. This fifth and penultimate installment of the series examines how organizations can create a plan to engage with this workforce safely. Businesses using gig workers are certainly satisfying both specific and opportunistic needs; however, the growing presence of these workers in the new world of work requires a more strategic approach.
Urgency is key when it comes to gig working, so businesses must act fast in order to get the most out of what are often highly time-sensitive situations. As gig working becomes seemingly inevitable, companies must identify how they can safely and quickly engage with this workforce. Creating and implementing standard operating procedures will allow businesses to harness the power of this new development at a strategic level while also mitigating the risk of deemed employment.
The subject of gig working is typically considered to be one isolated area of a business’s personnel strategy. However, in a world where this type of deployment is increasingly commonplace, a more strategic adoption of this phenomenon has to become a business imperative to safeguard both the business and the gig worker. Therefore, it is essential for companies to understand how they currently engage with gig workers and in doing so, acknowledge the different types of gigs that each require their own tailored approach.
The Gig Economy Risk Roadmap
As much as you cannot zero your deemed employment risk, categorizing and subsequently understanding the nature of gigs in the context of duration and location will go a long way to mitigating this complex threat. The first step toward this is to distinguish the different types of gigs. While the subject is too intricate to allow a complete categorization, having a basic framework pushes businesses to ask the right questions and evaluate different risk areas critically.
Short Gigs: One Hour to approx. Two Months
Short-term gigs may range from as little as one hour to up to two months, and are often unexpected, urgent and non-core positions. Although these short-term gigs will involve the immediate production of, for example, content or design work, quite often these gigs will turn into longer undertakings or repeat work running up to a couple of months.
In such instances, the risk of deemed employment will grow as a business increases its interaction with the gig worker. Developing a short list of intermediaries that will indemnify a business against this risk is a very effective way to engage with such short-term gigs.
Regardless of the location of the gig, whether it be in a familiar jurisdiction or elsewhere, making use of the various platforms and apps that serve as intermediaries, offering both end-users and businesses the opportunity to source workers for their short-term gigs, will mitigate the risks involved for a business. For example, Upwork has helped define the space for businesses to engage remotely with gig workers and indemnifies their client businesses against the risk of deemed employment from the first hour that they engage with gig workers. However, for longer engagements such platforms are not necessarily ideal or cost-effective.
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Mid-term Gigs: approx. One Month to 18 Months
Businesses engaging with mid-term gigs, which could sit anywhere between one and 18 months, may already have a set of standard operational procedures in place, however, these procedures require further attention when it comes to engagements in unfamiliar territories.
If engaging gig workers seems intricate and rather risky for many businesses, operating across different territories further compounds this complexity. The bottom line is that engaging with workers to undertake gigs in any location is not the simplest of tasks, and, ultimately, no business can expect to understand employment issues in every territory. For many businesses, understanding how to engage with gig workers in their own country has proven a complex task, so attempting to understand the risks associated with international engagement is simply too daunting and risky.
Engagements with overseas gig workers may last for months or years, and because these gigs are not long enough to warrant bringing the gig worker on as a full-time employee, businesses need to carefully consider their strategy to ensure compliance. Of course each territory will have its own set of local laws and regulations, and if a business knows the location well, establishing a company strategy based on internal knowledge and trusted contacts is the most efficient way to make gig opportunities a success.
If a business is operating in an unknown territory, it must mitigate its risk by following local expertise and best practices. Developing a network of third parties and a trustworthy supply chain that will cover the relevant geographical locations and jurisdictions and manage different engagements will significantly reduce a business’s risk of deemed employment.
Additionally, an effective way to assess the feasibility of working overseas is to devise a simple checklist for local structures and situations. If you find that you are unable to provide an answer or solution to a number of these situations, it is advised that you seek guidance from a local expert and follow industry best practices, as without the knowledge of a particular territory you are left exposed to greater risk.
In short, rather than spending endless time and resources on the herculean task which is understanding local issues in dozens of territories, spend time developing and testing a trusted supply chain to help you approach the task with experience and knowledge.
Long Gigs: Three Months +
A business’s strategy to accommodate gig workers must be built upon factors that are right for the organization. Long-term gigs may typically begin as three months, but may run as long as two or three years. If operating within a familiar territory, a business is best placed to either employ the worker, accepting that it is most compliant to acknowledge that they are in fact an employee, or make use of outsourced employment solutions. Calling on services such as those of a PEO will ensure that businesses understand their risks completely, reducing the possibility of employee misclassification and covering all employment regulations and obligations.
Similarly to mid-term gig engagements, if a business is operating in a location which is unfamiliar they must ensure that they have a strategy in place to mitigate the risk of deemed employment while affording the worker all local statutory benefits. This can be addressed either by starting a payroll in the jurisdiction, a useful option when multiple workers are present in one location, or make use of a third-party employment solutions provider that will employ and manage the worker and mitigate the business’s risks.
Gig Engagement – Strategic vs. opportunistic
While the majority of businesses will engage with gig workers on a purely opportunistic basis, the sheer fact that this new world of work will soon be ubiquitous in the staffing sector means that strategizing is now a necessity, rather than over-cautiousness.
When the perfect solution to solve your business issue is to engage with a gig worker, you will need to move quickly to engage with a fast-paced market. If you haven’t built healthy foundations in terms of how to engage with this workforce you will be left with only bad options: take much greater risk or walk away.
In the current staffing climate, businesses needn’t refuse the flexible opportunities that come their way, wherever they might be located, as the gig economy presents the working world with a great number of possibilities to maximize growth and profitability. Formal strategies to accommodate this workforce will soon become an inevitable part of every expanding business’s playbook, and as ever the business with the best foundations will be best placed to move quickly when the situation calls for it.
The next installment of this series will provide with an overview of how businesses should prepare to effectively engage with and manage this generation of workers. Please do share your thoughts by leaving a comment below.
