The gig economy has been getting a lot of press, positive and negative. But how will it impact employers, employees and society?
The “gig” economy is one of the most talked-about trends of the post-financial crisis era. The term refers to an environment in which contingent positions (or temporary work) are common, and organizations – and individuals – regularly contract independent workers for short-term engagements. “Essentially, a gigger is a new and dynamic word for a contingent worker,” says Tony Steadman, Total Talent Supply Chain, EY.
It’s currently receiving most of its media coverage in relation to transport, food delivery and odd jobs. But after first being used to source short-term contracts with highly skilled individuals by the oil and gas sector, among others, in the 1980s, gig work is also mushrooming at the high-skilled end of the market – connecting coders, programmers or graphic designers, among many other professions, to companies both large and small. Since the financial crisis, gigging has also been a growing trend in sectors like technology, telecoms, and financial and professional services.
In the last decade, powered by the latest technological innovations and the prevalence of mobile technology, new business models have emerged, opening up new opportunities to directly match independent workers with their customers.
The rise of the gig economy has been a big enough trend that businesses and politicians alike are taking note and trying to work out how to respond. In June 2017 the European Parliament adopted a draft report calling for fresh EU-wide legislation to ensure greater protection for workers in the gig economy.
The UK government’s independent report, Employment Practices in the Modern Economy, was published in July 2017 with significant focus on the gig economy, focused around a number of key areas. Of those the most prominent were the impact of gigging on employee rights and long-term welfare, and the responsibilities of employers, employees and the state to maximize the benefits of this shift in ways of working. Other legislators around the world are following suit.
Today, “the numbers are growing rapidly, and workforce data trends suggest the gig economy will continue to grow over the coming years, potentially becoming the majority of the workforce in many companies in the near future,” says David Storey, EY Global People Advisory Services Talent Leader.
There’s always been a gig economy – so what’s new?
Prior to the Industrial Revolution, many people were “giggers” of one kind or another – from artisans and craftsmen to seasonal agricultural workers. They responded to specific, time-bound opportunities as potential employers’ needs arose.
Over the 20th century, the factory system – and then the “firm” – emerged as the central engine of modern economies, creating millions of full-time blue- and white-collar jobs with set hours, rights and benefits.
This system fitted the industrial age. Prior to the Internet era, an assembly-line operation, whether in manual or knowledge work, was the most efficient way of working. The income stability this massive expansion in full-time salaried employment brought contributed to a rapid improvement in living standards in most industrialized countries.
But over the last 20 years, this model has begun to change.