The gig economy: Good or bad for UK growth businesses?
Great for flexibility? Or a way to drive down costs? Businesses are split on the gig economy. Is it possible to grow a business while keeping “giggers” happy?
In the world of work there is no bigger story than the gig economy. Since it first hit the headlines, the media has targeted organisations that thrive on flexible, no-strings labour. From Uber to Sports Direct large businesses have felt the sharp end of legal disputes and, as a result, public opinion has shifted.
Some employers are downright against it: “It’s ultimately a way of reducing costs and responsibility of human beings for an organisation whilst increasing flexibility. Anything beyond that is a romantic notion dreamed up by conference speakers,” says Gareth Jones, CIO and Head of Labs at talent management company The Chemistry Group.
But surely the time has come for this greater sense of flexibility and self-employment? Beneficial tax treatment and the promise of a work-life balance convinced millions to adopt this form of work. The McKinsey Global Institute says about 30% of workers in the US and Europe come under the gig economy. Official figures in the UK put the number at about five million.
The gig economy: Whose it good for?
Whether this is fair or not depends on the gig itself. Unskilled workers on zero hour contracts finding themselves paid below minimum wage have every right to protest, but specialists in niche industries could find themselves better off by skipping between employers.
Anouk Agussol, chief people officer at MarketInvoice, takes a balanced view: “Depending on the gig, this kind of work can be beneficial for both the business and for the individual. Unfortunately, there are still examples of unscrupulous employers who use this to take advantage of people. However, I like to believe that in the main workers who take on such role are in favour of it and seek out gig work.
“People love the diversity of being able to jump in and out of businesses, not feel tied to businesses and feel that they can be more honest with business leaders without worrying about being disadvantaged as a result. In areas where there is short supply of skills, it means that they can charge high daily rates too.”
The essential rules of being a good employer are the same regardless of where you source your people. Businesses that flout the spirit of the law could land themselves a PR disaster, while those who respect workers and provide good conditions will get plaudits.
A way to find co-founders and solve problems?
When Samar Birwadker founded Good.co he reached out to the gig economy to help him find the solution to a puzzle. The business is an app which helps people understand their own professional characteristics and matches these with the working culture at prospective employers.
The app is based on a complex psychometric formula, but distills it into an easy to understand, fun, set of questions. Birwadker, who founded the business in San Francisco in 2012, offered $2,000 to someone who could make the maths work.
“When I started I put up a little job and a bunch of people responded. Someone called Dr Kerry Schofield working at Kings College in England basically solved the whole problem in her proposal. I paid her with my credit card and she continued to work on the business because she enjoyed the challenge.
“The short story is that she became my co-founder and chief scientist with equity in the business. Good.co became transatlantic almost overnight.”
The business was acquired by international jobs board business StepStone in 2016. It could be one of the best examples of people making the gig economy work for them. But there are others.
Building teams without the overheads
Onyx PR and communications runs what it calls a “cog structure”, in which senior people across different sectors are responsible for their part of the business. Emily Goss joined as a freelancer part-time, but today has the title of communications manager.
She says: “Working on a freelance basis gave me the opportunity to get to know the Onyx team and discover how much I enjoy collaborating with them, without the pressure that working full time in an office can bring.
“I get to work from home most of the time, which is a great help, as I have health issues to work around. However, developing this into a regular part time gig-economy role as a communications consultant has provided stability.”
Creating new economies
Then are the businesses that don’t directly employ gig workers, but benefit from the expanding sector. NOMAD is a proptech business that offers a booking platform for temporary workspaces across London – like an Airbnb for desks.
The system is used by freelancers needing temporary space in lieu of a permanent office. Ansel Liu, founder of Nomad, says whether the gig economy is appropriate or not depends on the form your business takes. For start-ups in general, however, the attraction is clear:
“Tapping into the gig economy as a start-up enables you to mould yourself to changing strategies and be flexible as you grow. There are no fixed customers and as such no limitations to who can access your service,” he says.
The gig economy remains controversial and traps are everywhere, but so are success stories. Treating people with respect is the key. If you offer flexibility without scrimping then freelancers will give you a low-risk source of labour to grow.