Gig Economy Side Effects

GIG ECONOMY SIDE-EFFECTS:

IS YOUR WORKFORCE GETTING JOB SATISFACTION ELSEWHERE?

In some ways, the gig economy has existed well before the likes of Uber, Upwork and Deliveroo came along. The idea of ‘moonlighting’, workers taking on additional shortterm roles, is not new – whether that meant shifts in the local bar at nights and weekends, or shelf-stacking in shops at Christmas.

These days, however, an explosion of technology has taken over, bringing with it an unprecedented wealth of short-term self-employment ‘gigs’. People are now able to find their passion, indulge their creativity and hone their skills through easy-to-find, independent opportunities that fit smoothly alongside traditional employment.

Millennials have even coined a specific term for this: the ‘side hustle’. They are also far more likely to be indulging, with 36% of gig economy workers aged under 30. Meanwhile, a 10% rise in the number of university graduates, the ever- increasing popularity of social media, and stagnating wages means the ‘side hustle’ is a tempting prospect for many.

Even after adjusting for inflation, the average earnings of employees are still markedly below pre-recession levels, and people are coming under more financial pressure through debt and rising household inflation (reference: Institute for Fiscal Studies, IFS). Forecasts from the Office for Budget Responsibility suggest that the average person’s earning power will still be lower than at pre-recession levels in 2022.

These figures go some way to explaining why our workforce might be tempted to dip into the gig economy. But what does this sea-change mean for employers?

A bleary-eyed workforce could be one effect. With a demanding 24-hour society that is constantly online, the temptation for people to keep on working may appear overwhelming, particularly when there are debts to pay. There is also the question of skill devaluation. Sites such as Fiverr and PeoplePerHour offer a variety of opportunities for creative people, such as graphic designers and writers. Yet jobs are frequently assigned to those freelancers who offer the lowest rates, leaving skilled people working for less than the minimum wage.

Indeed, while many people assume that gig economy workers must be unskilled, information from Ipsos Mori finds that 28% of gig workers offer professional services including accounting and legal work, 26% creative/IT work and 18% skilled manual work.

This means that gig economy workers are likely to be honing valuable skills they can then take back into the traditional workplace. Millennials are often described as the most qualified, educated and indebted generation that has ever existed. They are also firmly focused on finding fulfilment through their work. As an employer needing to retain valuable staff, this could translate simply into offering well-paid opportunities that also allow for personal growth and development.

While the rise of the gig economy can be described as positive – it affords many hardworking people precious opportunities to top up their pay, whilst honing particular skills and creative talents. This in turn can help them make themselves more appealing to future employers, and earn higher wages. Employers should perhaps think carefully about its specific effects on their workforce.

This could take the form of finding out more about the people they have chosen to employ, then designing flexible routines, policies and practices that take account of the fact that the gig economy is here to stay.