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August 30, 2019 The Gig Economy - are you in or out? Mo Kanjilal

The Gig Economy - are you in or out?

What is it?

So what exactly is the ‘Gig Economy’? When you hear that phrase do you think about roles with short term ‘gigs’ such as food delivery drivers, taxi drivers or bar workers? In reality, this trend for work based on short-term contracts for work has now become something used widely across many industries. It is now very common to find Finance people, IT contractors, Project Managers, Marketing people, Administration Assistants, and a whole range of other professions working in this way on short term contracts for a fixed amount of work. In other professions, doctors, nurses and lawyers have been working in this way for a long time.

Why do it?

For workers, the appeal of this way of working is mostly about flexibility and freedom. The freedom to choose work schedules, to control how much time is spent working, to be able to juggle other life priorities, and the ability to earn higher rates for the work done. For employers, the appeal of employing people in this way means avoiding staffing costs when demand is not there, no holiday or sick pay and other employer costs to cover, and it provides a flexible workforce. This can also be a way of hiring additional skills or expertise without committing to the costs of employing someone at that skills level full time. Of course, there are people who feel this way of working leads to exploiting workers with no commitment to providing them with work, and no security in their incomes. For people working independently in this way, there is also the fear of being lonely, however the increasing prevalence of co working spaces such as WeWork offers solutions to anyone concerned about feeling they are cut off from the world as they work.

Who is doing it?

What is clear is that this way of working is here to stay. In a survey done by McKinsey, respondents state that the appeal of this type of work is payment by task, short-term business relationships and a high degree of autonomy. In the largest survey undertaken on Britain’s gig economy, the RSA found that young people (aged 16-30) are particularly attracted to the idea of gig work – 1 in 4 said they would consider some form of this way of working in future. Gig working is proving attractive to a growing number of the workforce, appealing to for example, people with family commitments who want to work flexibly and struggle to find roles that offer this. One of the biggest areas of growth for the gig economy is from people who are looking to scale back their careers slowly as they approach retirement, and to supplement their eventual retirement incomes. They often do not want to stop work completely, but want to scale down how often they work, so this type of working offers that flexibility.

How are they doing it?

This type of employment will not completely replace traditional methods of employment in companies, but it is clear that this way of working is growing, and in many ways is the future of work. For those who want to work in this way, they use different methods to find the work. Some will use their own professional networks, others may use a brand or company who have a network of gig workers, however for many, they need to be able to find the work through other methods.

The interesting thing here for the recruitment market is that the CIPD describe the gig economy as:

“participants who trade their time and skills through the Internet and online platforms, providing a service to a third party as a form of paid employment.”

So that means job boards! Or a type of internet platform anyway.

There are already online platforms that exist for this type of work. There are the brands such as Uber or Deliveroo, and there are an increasing number of platforms such as Fivver, People Per Hour or GigToGig which people are already using to find work.

According to McKinsey, independent workers make up about 20-30 percent of the working age population in the US and EU — which is approximately 162 million people. It is projected that half for the workforce in the USA will migrate to this way of working over the next 5 years. This ever-growing gig economy boasts flexibility, innovation, and ownership. Enabling this growing economy is going to lead to changes and opportunities in the types of tech used for things like tracking time worked, billing, reviewing and in terms of the recruitment market, in advances in tech to recruit these types of workers. There are companies out there looking at blockchain solutions for gig workers as a way of verifying people’s skills, for example, before they are employed on a contract.

As this type of working grows, there is clearly going to be a need to bring the people working in this way to the employers looking for workers who work in this way. This tech will need to:

  • Enable people to find the right opportunities quickly
  • Allow workers to compare ‘gigs’
  • Give companies quick and easy ways to find the people they might employ

A quick internet search for ‘gig economy platforms’ shows the number of different tech solutions popping up, it will be interesting to see which direction this tech goes in as more and more people ditch their employed status and move to this way of working. Is this the Future of Work?