Disrupting the Disruptors: Where is the Gig Economy Headed?

Emerging on the heels of the recession, when high unemployment made temporary workers easy to find, the gig economy is synonymous with short-term contracts and poor job security.

It’s not a new concept. Plumbers, electricians and graphic designers all engage in short-term contracts with little conventional job security. Retail, healthcare and academia industries operate zero-hour contracts too. It’s estimated 20% to 30% of the US population is engaged in the gig economy in some way.

The line of difference between the old and the new, and one reason for such recent buzz, is the interface through which consumers and businesses engage these services. An app versus a recommendation from a friend paints a more transient and transactional picture of employment.

Technology has been the catalyst. Uber, Deliveroo, TaskRabbit and countless jobbing platforms have disrupted the service model putting flexibility, options and opportunities (literally) in the palm of our hands.

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For these jobbers, barriers to entry are low, although reputation (in the form of reviews) is vital to survival. Consumer loyalty is to the platform, not the person, and here’s where the murky waters creep in.

For some, the gig economy is an opportunity. It means freedom or a chance to supplement income with a flexible, low-maintenance boost.

For others, it’s a challenge. Workers’ rights are diminished. Income is reduced. Amazon’s workhouse treatment of its staff was well documented in BBC’s 2013 exposé.

So, what of the future of the gig economy? How will this marketplace evolve to accommodate an empowered workforce and demanding consumers? What will businesses have to do to stay ahead of the gig economy curve?

Know the next generation

When you’ve witnessed numerous institutions collapse and the life expectancy of a Fortune 500 company fall by half, following in the footsteps of the old is not an attractive path.

Millennials want to go their own way, and they have the technology and confidence to do so. A career for life is no longer the raison d’etre and when the next gig is around the corner, why stay? Meanwhile, values-based decision making means financial remuneration no longer cuts it.

Step up, don’t cough up

Businesses are tackling this in numerous ways. Some design state-of-the-art Google-like offices. Others ensure there’s meaningful work at hand along with interesting and varied career progression, playing to the desire to have a ‘portfolio career’. Now and in the future, businesses must attract and retain talent through passion and purpose. Start with why, as Simon Sinek would say.

Embrace freedom through technology

Commuting is down 6%. Given the reputation of certain British train operators in populous areas of the UK, one wonders if that statistic is fed by those frequent commuting dilemmas alone.

Regardless, the desire to work from home (or anywhere) is held by employees across all age groups. And technology means it is a genuine reality.

Technology remotely connects a workforce. It enables parents to work flexibly, without the shackles of a long commute. It increases productivity and eliminates unnecessary meetings. With people working and living in the same area, it has the potential to build communities, reduce transportation costs and pollution, too.

“Digital readiness” embraces the cloud and businesses looking to inspire trust and loyalty in their recruits would be wise to do the same. Those unable to adapt to value-focused lifestyles may see staff retention suffer.

Things could get taxing

The enforcement of IR35 from early 2017 has cast a shadow over non-traditional employment options. The legislation was brought in to clamp down on tax avoidance, preventing those who are employed on a Friday, turning up on a Monday with a limited company. Paying less tax as a contractor but ostensibly doing the same job as an employee was a tax break the government would no longer tolerate.

The London Employment Tribunal mixed things up when it stated that Uber drivers were workers and not self-employed. As such, they are entitled to rights such as holiday pay, sick pay and minimum wage. As there is no legal definition of employment, and IR35 is deemed applicable based on a picture of a contractors working day, the haze surrounding this legislation may take some time to lift.

If talent (of any description) is increasingly only available in ‘gig’ format, businesses must be confident of engagement practices and clear on the law. There may be a call for HMRC to rewrite the legislation to better suit modern-day workers. We may see the introduction of simpler hiring models that facilitate greater visibility and accountability.

Tighter immigration

Foreign workers in the UK on a temporary basis make ideal candidates for short-term contracts. But of course, Brexit could jeopardise this. It’s currently unclear just how much of the gig economy is fuelled by overseas workers. Is the UK population open to gig work? While technology connects us to talent elsewhere in the world, is it enough and can it plug all the holes?

For those interested in capitalising on a flexible workforce, or adjusting to the changing demands of the workforce, HNRS can help audit your existing workforce and supply flexible solutions. For more information, contact us here.

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Colin Morley

Colin Morley
Colin Morley is professional services Director for Harvey Nash Recruitment Solutions, a division of Harvey Nash Plc, and a provider of MSP solutions to private, not-for-profit and public sector organisations.

Colin Morley
Colin Morley is professional services Director for Harvey Nash Recruitment Solutions, a division of Harvey Nash Plc, and a provider of MSP solutions to private, not-for-profit and public sector organisations.

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