The term ‘gig economy’ has recently been a hot topic of debate in both the legal and political worlds. There has been an increase in the number of cases evolving out of the flexible business models adopted by it, including Uber, CitySprint and Deliveroo. The gig economy seemingly allows employers to hire individuals on a flexible basis, which suits many people because it allows them to choose when and how much they agree to take on, so that they can fit it around family or other commitments. This platform appears to be empowering social change and creating a more on-demand culture in the workplace.
By understanding this trend HR professionals will be more prepared for what the gig economy could mean for the future of their business in terms of the recruitment, management and development of gig workers.
The gig worker is a significant departure from the traditional employee. Whereas there are defined processes and procedures for employing permanent members of staff, digital platforms allow businesses to appoint freelance workers directly, which sometimes means HR is excluded from the process.
The procedures and expertise needed to manage a workforce can become more complicated when a business relies on the speed and flexibility of the gig economy. The role of HR therefore becomes extremely important in maintaining visibility of the organisation’s workforce.
Any lack of visibility can be concerning for HR when they find themselves not being able to report accurately on the use of gig workers because so many are bypassing protocol and being appointed by line managers directly. As soon as management engage a gig worker directly, cutting HR out of the loop and evading their recruitment processes, it can create unchecked risks to security, GDPR compliance and cost control.
The numerous reviews and inquiries into the gig economy will undoubtedly create new regulations and employment laws, which HR teams will need to manage and comply with. They will also need to develop their support strategy to maintain the increasingly diverse and flexible business model that comes with the appointment of gig workers.
As gig workers are able to pick and choose where and when they work, this can create integration challenges if they are required to collaborate with permanent employees who are confined to set working hours and locations. To overcome this, companies could include location and working hour requirements in their freelancer agreements, or consider remote and flexible working practices for all workers.
Furthermore, as an organisation’s percentage of gig workers increases, it can be challenging for HR to retain the level of progression and development required for business continuity. Gig workers cannot be forced to attend training courses or learn new skills as they are generally self-employed. One way HR could uphold succession and progression in a business is to ensure regular reviews of the freelance network to guarantee that there are adequate numbers of gig workers available with the skills required.
The rise in demand for gig workers leads us to ask whether this is the end of the permanent job. However, while the gig economy is becoming more appealing to businesses, it doesn’t mean that permanent employees are on their way out. There will always be individuals who feel more comfortable working as part of team, in a more structured environment and being managed on a day-to-day basis. In any event, HR professionals should be more prepared for what the gig economy could mean for the future of their business in terms of managing both the retention of their permanent employees and recruitment of gig workers.
Emma Gross is a senior associate at MCG Law