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Gig economy

Is the gig economy coming for our jobs?

Gig is hot. It’s estimated that 5 million people in the UK alone make a living from the ‘gigs’ they do. Should all contracted workers fear for their jobs? Equally important: what can employers learn from (mainly) youngsters’ thirst for freedom – to do whatever, whenever? Simon Parsons, Director of UK Compliance Strategies at SD Worx, explains.

    COVID-19 as a gamechanger

    “In a gig economy, the labour market is characterised by the prevalence of short-term commitments or freelance work, as opposed to permanent jobs. For some, the flexibility that comes with gig work is a blessing in a routine-driven world, while others emphasise the blatant lack of workplace benefits for independent contractors, such as protection against unfair dismissal and the lack of sickness or holiday pay.

    “Long condoned by governments and consumers alike, COVID-19 has brought the gig economy to everyone’s attention. Suddenly, we were all ordering take-out, so it literally arrived on our doorsteps. As a consequence, we were actively supporting the exploitation of vulnerable workers. And governments? They were overspending their budgets to save the economy, so the gig economy’s tax loopholes promptly became a burning topic.”

      Inadequate framework

      “Increased focus on the faith of gig workers and their own vocal claims have led to several convictions of app-based services, including giants Deliveroo and Uber. The main takeaway: independent contractors whose working hours are controlled by an app are essentially employees. In other words: if it looks like a duck, swims like a duck and quacks like a duck, it is a duck. Calling it a sheep makes no difference.

      “The heart of the problem still remains, though: most national governments have so far failed to create a balanced and well-thought-out framework for the gig economy. Despite some recent interventions, nothing in Europe matches the decisiveness of California, where legislators passed a law forcing companies to prove that their workers are self-employed or to treat them as employees if they can’t.”

        Wanted: freedom of choice

        “Although gig work is probably just a fad that will fade away or will eventually lose its appeal because of laws and regulations, dismissing it as a mere excess of our times would be short-sighted. People – and the younger generations in particular – crave freedom of choice. They want to be able to make certain choices when the circumstances call for it. For example, if your mortgage payment is due on the 25th of the month, you’d prefer to have your wages in your account the same day, instead of on the first of the next month.

        “Give them an inch and they’ll take a mile? Not quite. We all like regularity in our lives. Besides, society expects us to be ‘regular’. To get a home loan in the first place, you need to furnish regular payments – something gig workers sometimes struggle with.”

          9 to 5, what a way to make a living

          “Next to flexible pay days, another way to make choice a more important part of work arrangements is flexible working time. Why not let go of 9-to-5 routines and focus on core time? My core time is Mondays, Wednesdays and Fridays from 9 to 5, but on the other days I fill in my agreed time as I wish. Core time could just as well be 10 to 3 every day. There are plenty of options for project and services workers.”

          “Employers and employees should come together to look for a good match. Employers will then have the certainty that the job gets done, while employees are better able to juggle their other priorities in life. Flexibility starts with communication.”

            My benefits are better than your benefits

            “A third possible route to offering choice to employees: flexible rewards. Not all employees want the same benefits. Your freshly graduated accountant will probably have other preferences than your eco-minded receptionist with three kids to provide for and a mortgage to pay. One-size-fits-all salary packages just don’t cut it anymore.

            “Agreed, for small businesses with only a few employees, flexible remuneration is easier said than done. But I expect the future to bring solutions in the form of bulk purchases. The idea: a business joins a ‘club’ that buys benefits together. That will allow you to offer a company car or medical benefits to your only employee – and thus to compete with larger companies on this front.”

              Buckle up

              “HR and employment trends are a bit like fashion shows. You get models coming down the catwalk decked out in all sorts of weird applications of fashion. We then wonder: ‘Is this what we are all going to like soon?’ The answer is no, but chances are that some sort of toned-down version will prevail. The same goes for the gig economy.

              “Flexibility and freedom of choice will be part of the new normal, one way or the other. Employers that act upon this evolution will undoubtedly have the upper hand going forward. One thing’s for sure: the time to act is now.”

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                  P. Simon Parsons

                  Simon Parsons

                  Director UK Compliance Strategies

                  Simon Parsons has been a major contributor to SD Worx’s payroll expertise since 1984. Besides being influential in the development of SD Worx’s payroll services, he is also a key presence on a number of HMRC consultative groups and committees. A fellow of the Chartered Institute of Payroll Professionals and one of the original Masters of Science in Payroll Management, Simon is a regular author and speaker on reward and payroll. He is Chair of IreeN, the electronic exchange with government user network, and Honorary Chair of the BCS (the chartered institute of IT) Payroll Specialist Group.

                  Simon has been named in the Reward list since its inception in 2009. He has won a number of awards, including the Strathearn Award for Lifetime Achievement and CIPP Person of the Year in 2006.