Everyone is talking about the gig economy – but what does it really mean?

The gig economy actually comprises a range of different types of workers, from Uber drivers and Deliveroo deliverers at one end, to the highly skilled ‘portfolio workers’ at the other. The growth in the number of all types of gig economy workers has largely been driven by a desire for greater work-life balance and increased flexibility in working. However, it may have also been driven by a lack of opportunity in the fixed employment marketplace, meaning employees may feel obliged to undertake a gig economy role to make ends meet.

What are the benefits?

There are countless benefits to the gig economy, and reports tend to show that the majority of gig workers are very happy with their working style. They have more control over when and how much they work, and the ability to plan their hours around family or other responsibilities. For freelancers with particular skills, there is also the advantage of being able to work remotely, alongside the potential to earn more than they would in fixed employment.

What are the risks?

The downsides of gig working have been in the news regularly, with politicians and legal experts currently arguing over the impact on employment rights, be it legal or financial. Workers in the gig economy receive none of the legal rights or employment benefits of standard employees, from holiday to sick pay, or pensions to fixed hours of work. As a result, instead of the desired control over their working life, some workers find themselves subject to meet any demands of the company they work for.

What does this mean for HR?

For employers, the gig economy could mean access to a ready market of talent that can be called upon, as and when it is needed. For HR this could mean lower overheads, less paperwork, less time spent on benefits and training, on top of the ability to reach a wider, international talent pool.

However, it could also bring with it countless challenges for HR, as the gig economy is impacting the way people work on countless fronts. Recruitment, employee management, payroll and engagement will all be changed beyond recognition, while higher turnover may mean that many who work for the company will not have been with them for long at all, leading to an absence of those who fully understand the workings of the organisation. Maintaining a balance between gig and fixed workers could also create difficulties for HR in mapping the training and development of employees, as irregularities arise between the gaps of the two-sided workforce.

The rise of gig economy could ultimately lead to a more disparate workforce, less loyalty and a potentially huge loss of the cultural benefits of a fixed team. The reality presents a multitude of potential issues and challenges, which HR needs to be equipped to deal with.

Prepare yourself for the change

There’s no doubt that the way people work is changing. Whilst some sources are stating that gig economy is not here to stay[1], organisations should still prepare for the impact its current prevalence could have on its workforce. It’s essential for HR to prepare a strategy on how best to embrace flexibility without damaging the morale of the workforce. HR professionals also need to be sure to keep abreast of all the legal implications surrounding this new job market, particularly in light of the widely-discussed Deliveroo legal case and the upcoming Taylor review.


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