By Ian Taylor
It’s taking the market by storm. But what does Gig Economy even mean?
The Gig Economy owes its name to performance and music culture, where a band or artist works a one-off or limited engagement and gets paid an agreed fee. Today, it’s not just bands that work like this. Across the globe, the labour market is shifting and offering contract or freelance services in this way. ‘It is now a thing’. From marketing to HR, from R&D to strategic planning, there are specialists ready and willing to help; but they don’t want to work for you full time.
How does the Gig Economy work?
Gone are the days when permanent, long-term employment, with the clichéd gold watch as a reward for a well-executed career was the norm. Now, our breakneck-paced business world calls for employers to respond quickly to changes in staffing levels and workloads: one minute, a hundred extra staff might be needed to test-drive an embryonic product or service; the next, permanent employees might have extra time on their hands. Neither scenario is ideal. This is where the Gig Economy comes into its own. Extra resources can be pulled in to fill staffing and skills gaps as needed, and the contracts can be tailored to suit.
The need for flexibility is common across all industries and it is a trend on the rise. Organisations need to rise to the challenge of adapting / gearing up or down quickly to deliver services or products in a smarter way. While contractors may support this need to adapt quickly, there is a double edged sword. Do they want to work for you and on this particular project?
So, in the Gig Economy, which came first – the chicken or the egg? At what point did people just start creating their own brands and hiring themselves out on a contract or gig basis? Of course, there has always been temporary staffing agencies poised to help with staff sickness or unexpected leave, particularly in the education and health sectors where additional work cannot easily be absorbed by colleagues. But when did outsourcing become such a global movement? Was it employees or employers who initiated the move away from a traditional employment model?
In truth, the phenomenon was the result of a Perfect Economic Storm – with the technology ‘tsunami’ enabling more connectivity and flexibility having one factor. At the same time, Millennials were reaching employment age and started leading the charge for change to greater work-life balance; dictating their terms, creating their own rules and demanding more independence. In short, shaping the life they wanted. Millennials tend to shy away from being solely money motivated. They struggle conceiving a life before cellphones, before the internet, before social media. Their digital mindset is hard-wired at birth, and many facets of their lives are governed by technology – from their sleep, their nutrition, their fitness, their work, to their social interactions. These trends are only going to grow exponentially over the next few years. Technology has now given a number of generations the tools to challenge most things. They can, so they do, end of.
Flexibility is at the centre of the Gig Economy and the benefits are being experienced by employers and workers across the generational divide. This new normal is being embraced by management consultancy firm Price Waterhouse-Coopers who has predicted that, like it or not, Millennials will form 75% of the workforce by 2025, and therefore will shape the future. We have little choice but to adapt to this aspect of the changing economic landscape and work with it, not against it.
Organisations that understand and ‘embrace’ this change will harness the intelligence, creativity and entrepreneurial skills of this newly geared workforce made up of employees working effectively from a wide range of different workspaces outside ‘office walls’. With their work being monitored less frequently and visibly, employers will engage with their workforce in very different ways.
Seamless connectivity enables global 24/7 work relationships that heighten the opportunity for customised and urgent service delivery in ways that experts can contribute to best.
Upsides & Downsides
It’s easy to see how the Gig Economy offers a new and exciting way of thinking and working. But nothing’s perfect. Awareness – and preparedness for – possible speedbumps is the key to managing this new phenomenon well.
So – The Pros
· Increase staffing quickly to cope with unexpected workloads.
· Get the job done in shorter timeframes.
· Match skillsets to tasks with greater success.
· Economise on staff incentives e.g. Kiwisaver, pensions, travel allowances, gym memberships etc.
· Minimise the role of a contractor who is not delivering.
· Avoid under-utilisation of permanent staff.
· Economise on office space with fewer people on-site.
· Enjoy greater flexibility, independence and renewed motivation.
· Work across time zones for clients anywhere.
· Specialise or broaden skill sets.
· Enjoy better work / life balance.
· Choose the work they want to do.
· Build relationships with a variety of companies and enjoy repeat contracts.
· Work when their productivity is at its peak.
And the Cons
· Experience dilution of company culture or ethics.
· Risk misinterpretation of directions due to language barriers or culture clashes.
· Cause disharmony or disruption among permanent staff.
· Struggle to motivate outsourced staff to go above and beyond.
· Spark accusations of abusive or discriminatory behaviour against an alternative workforce in less developed countries.
· Face intellectual property and confidentiality issues.
· Need increased HR management of outsourced work.
· Become anxious about income levels.
· Worry about the next job.
· Experience social isolation.
· Have to make their own health insurance or retirement plans.
· Be made to feel excluded or second-class to permanent staff.
· Be exploited financially or otherwise.
We can only guess how the Gig Economy will evolve. There are societal benefits to its emergence as a viable alternative to traditional work models, including putting less pressure on housing and transport by enabling people to work anywhere there’s an internet connection!
‘Adapt, embrace and evolve’ – an age old mantra!