Gig economy: the challenges and opportunities

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Gig economy worker using computer in a café

The gig economy offers myriad benefits for small businesses, says Kevin Green, chief executive of the Recruitment and Employment Confederation

The gig economy gets a bad press, with frequent stories about Uber and Deliveroo. But what’s being missed are the fantastic opportunities that digital work platforms such as Freelancer, Upwork or TaskRabbit can offer businesses and workers.

There are benefits to companies that can get this right. The gig economy lets you access talent from around the globe, 24/7. We are moving away from a 9-5 working day and, for businesses, this means constant progress and production.

For small businesses especially there are cost savings on offer because you can bring people in for projects as and when needed to meet demand. As for workers, they are given the choice of what jobs to do, when and how much for, which can fit around studies or family life. They can also access a global pool of employers.

The REC has called on government to provide clarity on the status and tax situation for businesses and freelancers, and we believe that with the right support the gig economy will play a huge part in the future world of work.

In our report, Gig economy – The Uberisation of work, we showed that 23 per cent of businesses would be encouraged to increase their use of digital work platforms if government clarified the legal status and responsibilities of such platforms in the UK.

Our report also predicts that by 2021 almost a third of UK employers could be using digital work platforms to find staff. For businesses across many sectors, there is a need to think about the effects this shift will have on your operation so that you don’t get left behind.

One in five businesses say the risks of incorporating digital work platforms into their hiring strategies outweighs the benefits. So what can employers do to combat the risks? A lot of this comes down to valuing and incentivising gig workers in the same way you would permanent employees.

Gig economy: dos and don’ts

  • Employers might be drawn to the gig economy to save costs, but you get what you pay for. Paying fair rates in line with the national living wage will ensure you are getting the same level of talent you would elsewhere.
  • Some employers worry that gig workers are not as loyal as permanent workers. Take the time to ensure all workers understand and respect your brand and fit in with your culture.
  • Digital work platforms say their rating systems create a transparent employer-worker relationship. You should know the quality of work you’re paying for at the outset and a worker should know if you’re reliable – but this only works if all users leave fair ratings. If you encounter problems, first attempt to mitigate the situation with a worker before leaving unjustified negative reviews that could affect their future chances at work.

For the gig economy to work, employers need to drive best practice. At the REC we are working with more than 200 of the UK biggest companies to do just that, through our Good Recruitment Campaign. To find out more about how you can be a part of it, visit www.rec.uk.com/good-recruitment-campaign.

About author

Kevin Green

Kevin Green

Kevin Green is the chief executive of the Recruitment and Employment Confederation (REC)

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