The world of work is changing. For a considerable share of the workforce, gone are the days of traditional nine-to-five schedules, a job for life and a fixed-rate salary.
Instead we have seen the emergence of a more flexible model, the gig economy, allowing individuals to be contracted on a short-term, project basis, being paid for each ‘gig’ they perform, be that as a taxi driver, a management consultant, or even a dog walker. It’s a phenomenon with far-reaching effects, but the opportunities are often misunderstood and worse still, demonised.
In the UK, almost five million people are employed as independent workers in this capacity, and new research from EY has revealed that two fifths of companies expect to employ more such workers within the next five years. One thing is clear, that the gig economy is here to stay.
The implications of these changes to the labour market have been a topic of fierce debate. In recent weeks, there has been a court ruling that saw Uber lose its right to classify UK drivers as self employed, and a group of Deliveroo riders is said to be following suit and seeking unionisation.
The debates that have engulfed these two leaders in the gig economy have led to the term becoming synonymous with exploitative practices, and the press is all too keen to come forward with disenfranchised workers, stripped of employment rights and paid far below the minimum living wage.
Missing the point of the gig economy
But to summarise the gig economy as the combined workforces of Deliveroo and Uber is to entirely miss the point. There is a vast swathe of multifaceted opportunities presented by this new model of work. There are huge benefits for both businesses and employees, when the gig economy is done properly
For employees, we are seeing an increasing rejection of the corporate lifestyle, with the next generation of workers instead choosing flexibility of working hours and the freedom to more closely manage their projects, or ‘gigs’.
The appeal of this freedom and flexibility should not be underestimated, and is developing traction with a range of demographics, from working mothers and disillusioned millennials to C-suite business executives and experienced consultants and analysts.
Control of what projects you work on, for whom, at what cost and at what time, are driving many workers in the professional services industries to choose self employment. The rise of sophisticated tech platforms to facilitate freelancers finding jobs has only accelerated this trend.
And yet, it is not just employees who stand to gain from a prosperous gig economy. The ability for businesses to hire flexibly and at short notice is something that underpins so much of what we take for granted in modern society. From an employer’s perspective, an on-demand workforce allows for quick, easy and cost-effective access to talent, as and when it is needed.
For a small business, retaining agility as it scales up is invaluable, and yet there are often large, high-risk costs associated with this type of scaling, such as entering a new market or launching a new product.
But the gig economy offers an alternative. When looking for expertise to assist with an expansion into a new geographical market, for example, business owners need not go through the effort and expense of making a permanent hire. Hiring a permanent member of staff takes on average 28 days in the UK. Compare that with the matter of hours that it can take to hire a freelance expert.
Scott Button, co-founder of Unruly, demonstrated this when looking at expanding the company’s advertising offering abroad into France and Germany. Within a couple of days, through Talmix he was able to hire experts in the French and German advertising markets and provide a firm platform for the company’s impressive growth. In today’s knowledge economy, business talent really is for hire and with the gig economy, it is available faster and at shorter notice than ever before.
Turning to independent expertise allows companies to extend the capabilities of their existing workforce, and to do so whilst controlling labour costs by employing extra capacity only as and when it is needed. Such services are hugely empowering for businesses, particularly SMEs, who through financial and logistical constraints would previously have been unable to tap into such talent pools.
The gig economy provides both employers and employees to operate with independence and only as far as their capacity requires. The opportunities are endless, as are the freedoms that this new system of employment promotes. We need to retain an open mind with labels such as the ‘gig economy’, and remember that this movement is bigger than individual companies. It is about the future of work.
Daniel Callaghan is CEO and founder of Talmix.