Employer Branding Talent Acquisition

Wellbeing in the Gig Economy

The onward march of the gig economy means that most of us now work as contractors or freelance workers and it suits many of us down to the ground. There’s an abbreviation especially for these workers: TVCs which stands for “temps, vendors and contractors”.

According to Forbes, more than one-third (36%) of US workers are a part of the gig economy, about 57 million people. The UK is on the up; the Office of National Statistics reports there were 3.3 million self-employed workers in 2001 compared to 4.8 million in 2017, a rise from 13 per cent to 15 percent of the total working population.

Jobs at all levels are now subject to contractual arrangements and Accenture plc predicted in 2017 that one of the 2,000 largest companies in the world will have “no full-time employees outside of the C-suite” within 10 years.

Pros and cons

New ways of working mean more flexibility for organizations to right-size their employee base, making it flexible with concomitant savings on pay and benefits at the expense of job security for workers. There are disadvantages for employers, of course, for instance:

  • Some organizations find that morale amongst contract workers is low because they don’t feel part of a team.
  • “Tacit knowledge” which employees accrue through working for an organization on a permanent basis, such as that around organizational culture may be lost.
  • Workforce planning can be problematic if high skilled contractors are picky about why, where and when they work, even when pay is flexed to make work more attractive at peak periods.

But we gain in many ways too, almost half (46%) of Generation Z workers are working on a freelance basis. Working patterns are changing, driven by technological advances as well as social and demographic changes. It’s likely that women, in particular, will benefit from the increased work flexibility offered by new contracts. Workers with sought-after skills can find it more lucrative to move from contract to contract with a view to gathering useful experience and contacts in roles that suit and interest them.

Legislation is planned, following the publication of the Government’s Good Work Plan, which will afford greater clarity and protection for those on alternate contract arrangements. Such legislation may stop agency workers from contracting out of their right to be treated on the same basis as employees of a business (known as the Swedish Derogation) and could be in force next year.

Many defend innovative ways of working, particularly the online platforms which facilitate the gig economy and flexible employment, as a beneficial business model, which is the ‘future of work’. However, while self-employment may be regarded as crucial for economic recovery, productivity, and competitiveness, it is clear that the relationship between self-employment and social security can be problematic.

Changing the way we work

Those who choose and prefer to work on a freelance basis balance flexibility and autonomy with work commitments and career aspirations. However, for many workers, there is little choice, autonomy, predictability or stability. Without no employer to provide benefits and training, some gig workers are left feeling they have no support in terms of financial and mental wellbeing.

The Institute of Occupational Safety and Health found that gig economy workers, temps, and workers on zero-hours contracts reported receiving fewer protections for health and wellbeing at work than permanent, full-time colleagues. We’ve all seen news reports about contractors working when sick, doing unpaid overtime and working through the year without a paid holiday.

In effect, we are witnessing a change in the relationship between employers and employees. Professor Cary Cooper CBE, Professor of Organisational Psychology and Health at the University of Manchester says: “We are currently seeing loyalty between employers and employees decreasing, which means that retaining healthy, high performing employees is even more important. Organizations of the future need to trust their employees and manage by praise and reward”.

By Liz Sebag-Montefiore

Liz Sebag-Montefiore is a Co-Founder and Director of 10Eighty. With over 10yrs of business experience, I have an extensive and impressive blue chip client base. I have worked with numerous firms working in partnership with the client to understand their needs.

My current role involves managing relationships with clients, developing new business, and coaching individuals in their career. I really enjoy meeting new people and have strong client relationship and networking skills.