What is the gig economy?

The gig economy is where individuals provide services to businesses as and when required, as an alternative to full-time employment. It is a controversial model in many sectors with employers accused of taking advantage of workers and seeking to avoid paying taxes and benefits that would be due if they employed individuals full-time. But for the employer, there are also disadvantages around legality, recruitment, motivation, and loyalty.
 

Why has it become popular?

The world of work is most definitely changing, and it’s becoming harder for employers to attract, retain and engage people with traditional forms of employment. The gig economy has offered businesses the flexibility they need to survive – especially throughout the pandemic.

 

Benefits for employers:

• Allows employers to identify needs and skills gaps.
• The ability to contract ‘experts’ for specific projects – gaining knowledge and insight of a specialist that may not be needed on a regular basis.
• Can save resources in terms of benefits (sick pay, maternity cover and holidays), office space and training
• Can act more responsively to the changing market in terms of scaling their workforce up and down to meet business demand.

 

Benefits for employees:

• More flexibility around when and where to work provides independence that many younger people, working parents, or those with specific commitments, seek in employment.
• Offers creative individuals a way to apply their unique skills which are not always highly valued in traditional job roles.
• Working on multiple projects for different types of companies can help to develop skills and expose workers to more opportunities.
• Less risk of job and income loss with multiple employers onboard and in some cases, gig workers can earn more than full-time employees.

 

What are the issues for the employer?

Recently, gig economy companies, including Uber and Deliveroo, have faced several legal challenges from around the world, about the rights of workers. For example, earlier this year, ‘the UK Supreme Court dismissed Uber’s appeal against a landmark employment tribunal ruling that its drivers should be classed as workers with access to minimum wage and paid holidays.’ 2.

Employers also struggle to find and retain staff, as loyalty is low, resulting in high recruitment and training costs.

 

What can leaders do?

It’s an organisation’s responsibility to ensure good working conditions and fair payment for everyone. The real challenge is to balance the innovation of the gig economy which creates jobs against the need to ensure companies offer a fair deal.

With a good work-life balance now a top priority for many with a stronger focus on mental health and wellbeing, to successfully thrive in the future, businesses need to start rethinking the traditional nine to five and allow teams the autonomy to discover the most productive way to work.

Business leaders, need to ensure they are equipping their staff with the skills to manage and operate in a hybrid team. For example, changing the way they motivate and inspire gig workers will help increase loyalty and generate a better, more productive working environment.

There’s no doubt that the gig economy is here to stay so make a difference by embracing it, discussing the issues and negotiating a way forward.  Let them understand your position and jointly agree the next steps. This should create a motivated, inspired workforce, where both leaders and staff work effectively and happily together.

Get started and change the face of gig workers in your business, today!

 

Want to learn more?

Read our Future Readiness Leadership Essentials for more ways organisations can review and adapt their business models, focusing on emerging trends, new ways of working, new technologies and future threats.

 

Bibliography:

1. The Guardian: https://www.theguardian.com/business/2021/mar/17/courts-close-in-on-gig-economy-firms-globally-as-workers-seek-rights