What is the gig economy and why is it so controversial?

 

 

 

 

 

 

Gig Economy…what’s that?

When you hear the term ‘gig economy’, instantly apps that we have grown to rely on, such as Uber and Deliveroo, spring to mind. The gig economy is characterised by short-term contracts, freelance work and a lack of permanence.

Pros and Cons

Gig work is not dissimilar to traditional zero hour contracts, however payment is generally made for each piece of work completed, as opposed to an hourly rate. This approach to work can be highly advantageous as it offers flexibility, allowing individuals to earn in their free time without the structure of a traditional job; this can become highly problematic when an individual relies on gig work as their sole source of income. Workers are treated as contractors, as opposed to employees, which means that they have no guaranteed income, and no benefits such as sick and holiday pay- a precarious situation for many.

So what is being done about it?

The Taylor Review (published on 11th July 2017) calls for a new category of workers known as ‘Dependent Contractors’; this would offer gig workers an increased level of protection without the need to become full employees. Currently, many workers in the gig economy are paid under minimum wage, with some earning as low as £2.50 an hour due to their contractor status. The recommendations put forward by the Taylor Review would address this, and increase the amount of tax and national insurance paid to the government as a result.

In theory, this is a positive step for gig workers, however the recommendations may reduce the flexibility sought by many. The need to balance the lack of structure desired by some, with increased protection for others, is an interesting and exciting task for HR teams. To maintain employee satisfaction it is necessary to collate the views of workers, however this becomes difficult when the nature of the work is informal; we must consider a move away from traditional methods, and work towards finding a more appropriate approach. Addressing the concerns of workers in a gig based economy is by no means an easy task, but one thing that is certain, is the speed at which this industry is developing, and the need for HR departments to react and respond accordingly.

 

Written by Molly O’Donnell

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