The gig economy and what it means for SMEs

Employees are opting to head down the freelance path, accepting ‘gigs’ as and when they come. But what does this gig economy mean for the SME landscape?

The world of work is changing, with the so called ‘gig economy’ on the rise among today’s professionals. Ditching the traditional ‘job for life’ career plan, many employees are opting to head down the freelance path, accepting ‘gigs’ as and when they arrive.

While this undoubtedly has its benefits for employees, who have the flexibility to work whenever, wherever, the real question is – what does this latest trend mean for SMEs?

From changes in work policy, to retaining an international workforce, the impacts are varied and many open businesses up to new opportunities. However, there are real concerns which should be addressed, to ensure that both employers and staff benefit from this popular way of working.

You’ll have access to a global talent pool

No longer dependent on sourcing from the local area, the gig economy has enabled businesses to source talent from across the globe, opening employers up to a host of new employees and even potential clients. And ultimately, this diversity amongst staff could lead to increased business growth, as the workforce contains a variety of experience and mindsets.

Working with staff overseas does, however, mean that some gig workers may not always be who they say they are, or hold the qualifications they say they do, and this is something that businesses should endeavour to validate, otherwise they could find themselves facing broader issues.

The competition is tougher

This increased talent pool does also come with another downside. Where a business may have once monopolised a market or region, the growing gig economy and increasing availability of workers across the globe means that competition is likely to be tougher; instead of competing with local businesses, employers are now up against the entire web and organisations across the world.

Furthermore, due to the structure of sites which enable gig workers to secure new opportunities, businesses could be forced to pay more for the most talented freelancers. Alternatively, businesses will be tasked with distinguishing the talented candidates from those who are looking to earn some extra money on the side, for relatively low-quality work. This is often a process that can take time and effort, or even be learnt through trial and error – ultimately costing the business.

Policies may need restructuring

If you’ve hired gig workers through an app or website, it’s worth considering how this will impact your current employee policies. Even if they’re not on your books, or a physical member of your workplace, it’s still important that you offer them fair employment conditions. While the gig economy does offer exciting new opportunities for both workers and businesses, it’s important that employers consider implementing policies which offer gig workers access to benefits and job protection.

Loyalty may be lacking

While gig workers are generally happy moving from one company to another, this could potentially be problematic for the business themselves. Temporary workers are less likely to be as dialled into the business as their permanently-contracted colleagues, which could lead to less loyalty toward the company in question. For example, a gig worker could be working with a company for one month, in which time they might be privy to private information and data, only to work for a competitor once their contract is up.

Of course, as the digitalisation of the workplace continues and more employees make use of shared working and gig opportunities, employers can tap in and out of this resource as is required. While this does have cost-effective benefits (it’s estimated to cost around 30 per cent less to hire gig workers than permanent employees), businesses should consider how having multiple gig workers and contractors might affect their overall company messaging; will this remain consistent, or do organisations risk damaging their identity?

Ultimately, the effects of the gig economy depend on the size or scale of the company in question. If your business is still in its early stages, gig workers could be key in plugging any skills gaps, and helping to drive growth. However, bigger, well-established organisations might well benefit from employing someone in-house, particularly if they’re on a steady and upward trajectory.

Whether businesses like it or not, the gig economy is here to stay; the good news is that there are a number of ways in which SMEs can make it work. By identifying and taking steps to overcome any potential issues, businesses should quickly be able to tap into a diverse and adaptable pool of talented workers.

Lee Biggins is the founder of CV-Library.  

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