Approximately 150 million workers across Europe and America have left the relative stability of their permanent role to work independently, becoming a key part of the wider UK workforce and what is now known as the ‘Gig Economy’.
Transforming the way that we view employment, the gig economy’s recent growth has a range of benefits but has also resulted in a range of pitfalls.
For anyone utilising the gig economy – or considering a dip into the market – it’s important to understand both the positive and negative ramifications, and to find the right balance for your career.
What exactly is the gig economy?
What is the so-called gig economy, and why are we hearing about it so often? The term ‘gig economy’ refers to a workforce that’s defined by temporary contractors. As such, it includes freelancers, contractors, interim managers, and anyone who’s making money on the side or earning full-time income with various short-term projects or ‘gigs’, rather than a single full-time job.
The role of independent workers has evolved even further as the development of online platforms has created large-scale job marketplaces, and it is now estimated that 70 million workers world-wide are registered on online labour platforms. These platforms enable an instant connection between customer and potential service provider at any hour of the day.
According to Government research, around 4.4% of the British population worked in the gig economy in the 12 months preceding February 2018. That’s roughly 2.8 million people working on temporary contracts in some capacity. More specifically, 42% of gig economy workers carried out courier services, while 28% and 21% provided transport and food delivery services, respectively.
But that’s not all. In the face of a well-documented skills shortage, and the uncertainty of Brexit, many knowledge intensive roles and blue-chip organisations are resorting to interim management or contractors to fill the gaps that they have. Although these are the kind of organisations less typically associated with the gig economy, they are the largest and fastest growing sectors of the workforce.
The question is: is this a truly sustainable option for UK businesses?
Benefits of a gig economy
In a gig economy, businesses save resources in terms of benefits, office space and training. They also have the ability to contract with experts for specific projects who might be too high-priced to maintain as permanent staff. Essentially, you get the knowledge and insight of a specialist without having to pay their full wage, because you’re not paying them all-year-round.
From the perspective of the freelancer, a gig economy can improve work-life balance over what is possible in most jobs. In a survey by Randstad, over 62% of gig workers were using this form of work as an additional source of income helping to support their current lifestyles. Graduates, working parents or those with specific commitments may benefit from the greater flexibility and control.
Ideally, the model is powered by independent workers selecting jobs that are the most lucrative, those they’re the most interested in and those that can make the most of their talents. The freedom they are given means that they can then work when they want, on projects they choose to work on and have complete ownership of each task.
Potential problems
However, for those in the courier or transport industries, it has become a model in which people are forced into a less advantageous position. Unable to attain employment, they pick up whatever temporary ‘gigs’ they can land. As a result, this flexible mode of employment is actually being used by many firms to exploit low paid workers.
With this comes some clear concerns about workers’ rights. At what point does a ‘gig’ become permanent employment?
Uber & Addison Lee drivers have already taken legal action for their rights to holiday pay and benefits, for instance, highlighting a number of questions about the real work-life balance for gig economy employees.
In 2017, the Taylor Review called for a new category of worker – a ‘dependent contractor’- that have access to some employment benefits and are ensured a fair wage. This would go some way in helping to give additional security to many gig workers, an area which has regularly been called into question.
Another concern is the lack of safety training. Research by UCL revealed that 63% of gig economy drivers haven’t received any safety training for managing risks on the road. A similar figure (65%) reported that they weren’t even provided with safety equipment like a high-visibility vest.
This poses a big problem within the logistics and supply chain industry, where driving plays an essential role. Needless to say, this is one area where businesses can’t cut back and save on training. Companies utilising the gig economy will still need to invest time and money into ensuring their staff are up to date with the latest health and safety practices.
Finding the right balance
According to Deloitte, by 2020 it’s expected that up to a third of the UK workforce will be a part of the gig economy. Here at Bis Henderson Recruitment we have seen a significant increase in the demand for interim and contract roles over the last 12 months following the uncertainty that Brexit has brought to the supply chain, and the ever-widening gap in technical skills.
That said, businesses still value recruiting, retaining and developing permanent employees as part of an increasingly flexible and agile workforce.
This agility comes from having loyal and change-ready personnel, not necessarily turning to the gig economy as a quick fix. This is something businesses will have to assess on a case by case basis.
When deciding which roles are suitable for experienced contractors and which require more long-term planning with recruitment, training and development Bis Henderson Recruitment can help. We can identify the very best candidates for both permanent and interim positions. From finding the needle-in-a-haystack candidate to providing specific interim management solutions, we can support you in all of your logistics and supply chain recruitment needs.
Contact our recruitment team today to discuss your company’s requirements.