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August 22, 2017updated 23 Aug 2017 5:09pm

Gig Economy: Big Business Capitalising From Third Class Citizens?

As big corporates join the 'gig' bandwagon, are temp workers facing a future of job insecurity?

By Ellie Burns

A friend of mine has fully embraced the so-called Gig Economy – rejecting the stable 9 to 5 workday, along with the subsidised canteen and myriad of benefits, from dental to the meagre pension so many are offered. Instead, said friend is an Uber driver by night and freelance writer by day, with plenty of time to advocate the merits of ‘being his own boss’ to anyone in passing.

This friend, like many others around the world, has kick-started an apparent revolution in the global labour market, one that is characterised by short-term contracts and freelance jobs. However, although the gig economy is being sold as something shiny and new, it is not exactly as revolutionary as some may have us believe.

“Even though the “gig economy” is a relatively new phrase in our language, this way of working has been around for years in various forms,” Carl Reader, author of “The Startup Coach”, told CBR.

“From musicians playing gigs (yes, the musical gigs!), through to the use of freelancers, “personal service companies” and today’s wider use of self-employed individuals by corporations such as Uber, Deliveroo and Pimlico Plumbers; the ability for both the company engaging an individual and the individual being able to work without the restrictive obligations of employment has been attractive to some.”

I do, however, stand by my statement that the gig economy has caused a revolution in the labour market – albeit with not a very innovative model. The success of the gig economy rests on the disruptors of industry, the Ubers and the Deliveroos of the world. Gig workers have certainly ridden the wave of tech disruption, with the press attention garnered by the disruptors causing a natural spotlight to fall on the workers ‘employed’ by such companies.

“Recently, public opinion has shifted and these arrangements have come under the spotlight. The political parties see the current state of the gig economy as the avoidance of both employment taxes and workers’ rights,” Mr Reader told CBR.

“There is also the wider question as to whether the gig economy is a mutually beneficial arrangement these days, or simply a tactic for the large corporations to avoid their obligations were they to employ the individuals directly.”Deliveroo app adds new safety features to protect riders

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Such is the concern that large corporates are taking advantage of gig workers that a major report was commissioned to look into the fairness and rights of workers in the gig economy. The Taylor Review recommends that gig workers be treated as ‘dependent contractors’ and receive more employment rights, underpinning one of the main areas of the report which sought to tackle exploitation.

Of course, the exploitation of workers has been a criticism of gig economy companies since the phrase became a popular industry buzzword, with many companies rushing to implement strategies in efforts to appease the critics. Uber, for example, recently introduced a range of benefits for UK drivers who have completed at least 500 trips. Benefits include sickness and injury cover, yet some experts, like Tony Dundon, believe it is simply not enough.

“Recent strategies by gig-economy employers such as Uber or Deliveroo to incentivise labour markets are likely to be seen as papering over some very deep cracks,” the professor of human resource management at Alliance Manchester Business School told CBR.

“Employer-led incentives do not compensate for a lack of legal rights including sick pay, working time protections, voice and consultation about job demands.

“The reality is that, while gig economy work is attractive to young people entering the labour market for the first time, it can lead to these workers becoming second and third class citizens. The recent Taylor report recommendations fall short of establishing consistent and universal rights for ‘all’ people in employment.”

However, despite the constant barrage of criticism and bad press, the gig economy is flourishing. Buoyed by the ever expanding pool of tech disruptors and gig companies, workers are flocking to the ‘no strings attached’ way of working. Not only are workers embracing the gig way of life, but big business is also looking to the shared economy, as Andy Campbell, HCM Strategy Director at Oracle, told CBR:

“The gig-economy has come under scrutiny for many reasons, from questions around employee benefits to worries about how to deliver high quality work with a fluid and variable talent pool. These concerns are valid, but the shift to more freelance and gig work will only pick up. Oracle’s own research found that 50% of UK businesses plan to take on more temporary workers by 2020.”

The huge 50% jump in temp workers expected by 2020 is driven by the realisation that flexibility equals productivity, which ultimately means more money for big business off the backs of temporary staff. Temp staff also provide a short-term solution to the ever growing skills gap, with added benefits and compensation only serving to attract more people to the temp roles.

READ MORE: Cyber security skills shortage to hit 1.8 million by 2022

“An improving global economy means that employers everywhere are having to compete for top talent, whether its full time, part time, or gig work,” said Sean Ginevan, Senior Director at MobileIron.

“Many workers enjoy both the mobility and flexibility presented by gig economy companies and may be even more attracted to them when increased benefits and incentives are added to the compensation plan. A recent report underscores this point, with 77% of employees feeling that remote work leads to greater productivity.”

Flexibility, productivity, autonomy, no strings attached – all benefits from the gig economy and rooted in the concept of the shared economy. This ‘shared economy’ is a socio-economic ecosystem built on the sharing of people, in both physical and intellectual capacities. People are being sold this ideal of shared creation, shared trade, and shared production, with it all leading to a better, fairer economy. However, the belief that the shared economy is fairer than other economic models might just be really good PR based on very little truth.

“It is a red herring to call it the shared economy, because it is not a fairer economic model – instead concentrating power in the hands a small number of companies,” Nick Lambert COO at MaidSafe, told CBR.

“That is not innovative or game changing.

“A much more positive and radical approach will be one based on far greater decentralisation, where individuals have complete control of how they interact with others and are not reliant on middle men to share out rewards.”

Dispelling myths about the ‘fairness’ of the Shared Economy and the obvious exploitative practices towards workers, again puts into question the draw for workers to the gig economy – an economy that many critics except is only to get bigger as big business gets on board. It is, I suppose down to where we are at the moment, in the throes of the Fourth Revolution.

“I believe that this way of working will become more common, particularly as we go through the current revolution of automation and related technological advances,” said Carl Reader.

“I can foresee that more traditional jobs, which once would have only been offered as a full-time employed role, will move towards a gig economy style role – and in fact I’ve already seen this with returning parents in the professional sector, who prefer to work on their terms around their family, not an employer’s terms.

“I also see that corporates will begin to look to share the commercial benefit of these arrangement with their workers, perhaps by direct profit sharing on the work performed. Whatever happens, I’m convinced that just as we’ve seen this style of working under different guises for quite a few decades in the past, we will continue to see it going forward,” said the author.

READ MORE: Inside the new talent sharing economy

The criticism surrounding the rights of Gig Economy workers shows no signs of resolution, with efforts of legislation and regulation slammed for doing not enough, more quickly.

However, the real concern lies in how the gig economy will evolve next, with more big corporates joining the small group of power players in the economy who are all vying for more temp workers. As these big corporates offer more and more ‘gigs’, more and more workers will be needed to fulfil this demand. Yes, workers get autonomy and flexibility, but job security will slowly be eroded in favour of this economic model. While big corporates will secure future revenue, workers will continue to be insecure, breeding a new group of third class citizens.

“Employment in gig economy jobs lacks security and sustainability, and is often transient. Awareness of these issues is growing,” said Mr Dundon.

“Yet it remains to be seen if gig economy employers are doing enough to attract, retain and protect their staff. Corporate incentives to try and redress these issues will not, on their own, be sufficient to correct the insecurities in gig economy work.”

 

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